Scenario 1: A pharmacy chain hires a value consultant to review its Medicare and Medicaid billing practices for ways to optimize the coding of drug reimbursements to maximize profits. Drugs that had historically been charged for government reimbursement at $1/pill as the “usual and customary price” are now getting coded for reimbursement at $3/pill—a 200% markup that represents a pure profit windfall to the pharmacy chain. Is this a violation of the False Claims Act (FCA)?

Scenario 2: A construction company that has years of experience in federal procurement contracting had never charged the government for reimbursement of several cost items, because the company’s previous CFO did not feel such reimbursement would meet the “reasonableness” requirements of FAR Part 31 (e.g., FAR 31.201-2(a)(1) and 31.201-3). But the company’s new CFO, holding a different interpretation of the reasonableness standards and Cost Accounting Standards (CAS), instructs his program leads to start charging those items for reimbursement in all new and existing contracts. Is this a violation of the FCA?

Continue Reading Knowing <em>IS</em> the Battle: <em>Supreme Court to Address the FCA’s Scienter Standard</em>

Sure, America has the Grand Canyon, baseball, and apple pie, but you know what it doesn’t have? A nationwide data protection law. Instead, data protection has been left up to a pastiche of state laws, regulations, and enforcement actions that demand many companies choose one state law to rule them all. California led the pack, being the first to pass a data protection law, the California Consumer Privacy Act of 2018, going into effect January 1, 2020. Following California, only four other states have successfully enacted a data protection law, with Colorado and Virginia passing such laws in 2021 and Utah and Connecticut in 2022.

Continue Reading Coming Soon? The American Data Privacy and Protection Act (SPOILERS)

When issues arise during performance of a federal government contract, causing a contractor to experience delays and/or to incur additional, unanticipated costs, contractors have a choice of remedies. They can request the contract duration or price be adjusted by submitting either a request for equitable adjustment (REA), or a claim. Though REAs and claims largely serve the same purpose, there are differences between them. Contractors must engage in a thoughtful analysis before deciding which strategy is best in their particular circumstances. A recent Federal Circuit case, Zafer Construction Co. aka Zafer Taahhut Insaat Ve Ticaret AS v. U.S., has further informed that “REA or claim” analysis. Maria Panichelli explains what this means for federal contractors seeking contract adjustments in this article for Federal News Network.

*As appeared in Federal News Network

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Last year, the Build America, Buy America Act left contractors scrambling to understand how its requirements would be imposed on a wide variety of infrastructure projects. Cara Wulf provides clarity to contractors on agencies’ evolving guidance.

*As appeared in The Government Contractor, article PDF provided in link.

In 2006, the documentary An Inconvenient Truth chronicled former Vice President Al Gore’s efforts to educate the public on the consequences of climate change. In the sixteen years since the Academy Award-winning film was released, public interest in the impact that greenhouse gas (GHG) emissions have had, are having, and will have on our planet has increased exponentially. Most recently, at the 27th U.N. Climate Conference (COP27), countries from around the globe came together to discuss the implementation of battle plans to combat climate change. One such plan, which was discussed at COP 27 by President Biden, is a new Proposed Rule that would require “significant” and “major” federal contractors to disclose their GHG emissions and climate-related financial risk as well as set science-based targets to reduce their GHG emissions. If and when the Proposed Rule is finalized, it will have seismic implications for contractors, in that it ties contractor responsibility (i.e., a contractor’s ability to receive federal awards) to compliance with these requirements.

Continue Reading An Inconvenient Requirement: New Proposed Rule Would Require Federal Contractors to Disclose Greenhouse Gas Emissions

Like most businesses, government contractors are in the customer service field and have been conditioned to operate by the old adage that the “The customer is always right.” After all, the customer pays the bills, right? As a general matter, this is true. Uncle Sam is responsible for paying the bills submitted by contractors and—most of the time—payment arrives without issue. That said, there are circumstances in which the government refuses to pay for work performed. One of the more common reasons for such nonpayment is the government’s contention that the work at issue was “not authorized” under the operative contract, notwithstanding the fact that the contracting officer’s representative (COR) was well aware of the work being performed. There are, in fact, many decades of decisional law emanating from courts and boards of contract appeals relating to the nuances of this precise issue. This means that an untold (but stratospherically high) number of frustrated contractors have suffered very expensive battle scars trying to litigate their way to payment by convincing judges that the work performed actually was authorized by the appropriate government personnel. A recent publication by the Department of Defense (DoD) provides contractors with an important reminder as to how to avoid this costly fate.

Continue Reading “Respect My Authority!”—An Important Reminder as DoD Issues an Updated Guidebook for Contracting Officer Representatives

The U.S. Department of Justice (DOJ) Procurement Collusion Strike Force (PCSF, or Strike Force) celebrates its third anniversary this month. Formed in November 2019 as an interagency partnership consisting of DOJ’s antitrust prosecutors, lawyers in 13 U.S. attorneys’ offices, and investigators from the FBI and federal Offices of Inspector General, the Department of Defense, the General Services Administration, and the U.S. Postal Service, the Strike Force leverages joint resources to investigate public procurement crimes, employ complementary enforcement and prosecution strategies, eliminate anticompetitive collusion and fraud, and promote the integrity of government procurement. Employing education and state-level liaising, the Strike Force has been remarkably omnipresent and successful in that short time, despite numerous pandemic-related interruptions/delays in the courts. The pace of the Strike Force’s enforcement activity has quickened dramatically in 2022—and shows no signs of slowing in 2023.

Continue Reading DOJ’s Procurement Collusion Strike Force: Widening Its Stride on Its Third Anniversary

Act Seeks to Cut Strings Between U.S. Small Businesses and China, Russia, and Other Countries of Concern

Small businesses that rely on the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to fund their research and development projects were left on the edge of their seats this September as the reauthorization of those programs hung in the balance. Fortunately, on September 30, 2022—the date on which the programs were set to expire—President Biden signed the SBIR and STTR Extension Act of 2022 (the Act). The Act, which reauthorizes the SBIR and STTR programs until September 30, 2025, is the result of several months of protracted negotiations in which Congress questioned whether the programs provide enough protection against ties between China and other foreign countries of concern and program awardees. These concerns were amplified following reports that state-sponsored Chinese firms were targeting companies funded by the programs and, in some cases, that China was the true beneficiary of the awards, not the United States. This prompted intense scrutiny of the programs, which are intended to fund US startups and small businesses to stimulate technological innovation and meet federal research and development needs, and placed the reauthorization of these programs in jeopardy. Ultimately, however, Congress was able to reach an agreement to reauthorize the programs, but not without some major national security reforms to ensure that American intellectual property remains protected from foreign influence.

Continue Reading SBIR/STTR Extension Act Preserves Innovation Programs, But Comes With a Bite

According to the Office of Federal Contract Compliance Programs (OFCCP), since 2019, Will Evans, a reporter for the Center for Investigative Reporting, has sought the Employment Information Report (EEO-1) data of federal contractors through a Freedom of Information Act (FOIA) request to OFCCP. Mr. Evans amended his FOIA request on June 2, 2022, and now seeks the Type 2 Consolidated EEO-1 Report demographic data of federal prime contractors and first-tier subcontractors for 2016–2020. OFCCP estimates that this impacts approximately 15,000 contractors and first-tier subcontractors.

What does this mean? Absent an objection, OFCCP could disclose your company’s Type 2 Consolidated EEO-1 Reports Component 1 data for 2016–2020 in response to Mr. Evans’s FOIA request.

What is an EEO-1 Report? The EEO-1 Report is the form used annually by the Equal Employment Opportunity Commission and OFCCP to collect a summary of an employer’s workforce data.

Continue Reading Attention Federal Contractors and First-Tier Subcontractors: Your EEO-1 Reports May Be Responsive to an OFCCP FOIA Request, and You Have Only until September 19, 2022, to Object.

McCarter partner Cara Wulf has authored an article which appeared in Law360 under the title “Cos. Should Prepare for Gov’t Grantee IP Reporting Update”. The article discusses the updated IP reporting system (iEdison) the National Institute of Standards and Technology (NIST) will be launching this month and outlines several steps recipients of federal funding should take to prepare for the transition.

For years, recipients of government funding have been forced to meet their intellectual property reporting requirements using the antiquated and user-unfriendly Interagency Edison, or iEdison, system.

Changes to iEdison have been underway since December 2019, with responsibility for iEdison soon transferring from the National Institutes of Health to the U.S. Department of Commerce’s National Institute of Standards and Technology.

At long last, the revamped iEdison is almost ready to go live.

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