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On December 21, 2020, the Department of Defense (DoD) Office of the Undersecretary of Defense for Intelligence & Security published a Final Rule codifying the National Industrial Security Program Operating Manual (NISPOM)—currently published as part of DoD Manual 5220.22-M—in Title 34, Part 117 of the Code of Federal Regulations. The Final Rule became effective on February 24, 2021.

Continue Reading DOD Issues Final Rule Codifying The NISPOM

A new administration has moved into the White House, and, as anticipated, President Biden wasted no time in issuing, in the first few days of his presidency, a raft of Executive Orders (EOs) that appear calculated to set the tone of his administration. Notably, many of these executive actions walk back (or attempt to fully erase) some of the signature policies of the Trump Administration. Some of these presidential actions have immediate implications for government contractors, while others represent broad policy statements that, at least in the short term, will have little impact on contractors’ day-to-day operations – but they merit a close watch, particularly the Executive Order titled “Ensuring the Future Is Made in All of America by All of America’s Workers,” discussed in detail here. Contractors should take note of these early developments, as they are likely to evolve into concrete policies that will create new opportunities – or obstacles – for businesses in the federal marketplace in the months and years to come.

Continue Reading The Beginning of the Biden Administration – What Federal Contractors Need to Know

On December 23, 2020, the Government Accountability Office (“GAO”) issued its annual Bid Protest Statistics for Fiscal Year 2020. As we’ve previously noted in this blog, the GAO’s yearly Bid Protest Report to Congress provides a snapshot of bid protest metrics for each fiscal year, along with data on five-year trends in the GAO’s bid protest adjudication. The following chart provides a summary of the GAO’s statistics from FY 2020 through FY 2016:

Continue Reading Excellent News for Protesters: GAO’s FY 2020 Bid Protest Report Reveals Record High Effectiveness Rate

On October 15, the FAR Council issued a Proposed Rule implementing amendments to the current FAR definition of “commercial item.” As explained below, the Proposed Rule will eliminate the current FAR definition of “commercial item” and replace it with separate definitions for “commercial products” and “commercial services” to benefit both contractors and the acquisition workforce by simplifying the application and providing greater clarity on the scope of each term. Comments on the Proposed Rule must be submitted no later than December 14, 2020.

Continue Reading Clarity, Sweet Clarity—Proposed Rule Will Revise the FAR Definition of “Commercial Item”

Like the hits produced by DJ Khaled, the FAR Council offers “another one.” As covered extensively in this blog, federal contractors have been—or should have been (you have been working toward compliance, haven’t you?)—spending the closing days of summer ensuring compliance with the July 14, 2020 Interim Rule implementing Section 889(a)(1)(B) (“Section B”) of the National Defense Authorization Act for fiscal year 2019.  Section B prohibits the government from entering into a contract with an entity that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system, and requires, among other affirmative obligations, for contractors to represent—after conducting a “reasonable inquiry”—that they do/do not use covered telecommunications equipment or services in their respective business operations. In light of the Interim Rule’s broad scope and mandatory accounting of a contractor’s operations, Section B’s compliance mandate presents another significant regulatory burden for contractors to shoulder. But contractors should fear not, because the FAR Council has heard their plaintive wails and responded on August 27, 2020, with a Second Interim Rule implementing new requirements for Section B compliance.


Continue Reading The FAR Council’s Second Interim Rule Implementing NDAA Section 889(a)(1)(B): And the Hits Keep Coming!

As covered recently in this blog, the Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration released on July 14, 2020, an Interim Rule covering prohibitions on contracting with entities that use “covered telecommunications equipment” under Section 889(a)(1)(B) (“Section B”) of the National Defense Authorization Act for Fiscal Year 2019 (“NDAA for FY19”). Effective August 13, 2020, Section B prohibits federal contractors from “entering into, or extending or renewing, a contract with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.” In addition, “covered telecommunications equipment or services” includes telecommunications or video surveillance equipment and services produced by (1) Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company, or any subsidiary or affiliate thereof, or (2) an entity “owned or controlled by, or otherwise connected to, the government of [The People’s Republic of China].”

Continue Reading DoD and GSA Release Guidance on Implementation of Section 889 Part B

Relying upon the cryptic answers provided by a Magic 8-Ball when deciding to file a protest at the United States Court of Federal Claims (COFC) may sound farcical, but a recent decision by a split panel of the United States Court of Appeals for the Federal Circuit may render this method commonplace.  In Inserso Corporation v. United States, the Federal Circuit held that the Blue & Gold waiver rule regarding the timeliness of protests against patent solicitation errors barred Inserso’s opportunity to protest the Defense Information Systems Agency’s (DISA’s) allegedly improper disclosure of total evaluated pricing and previously unreleased evaluation methodology during debriefings with certain offerors.  In what can only be described as requiring an offeror to possess preternatural foresight of all potential agency errors in a procurement, the Federal Circuit reasoned that Inserso should have known the type of information it challenged was likely to be disclosed in the debriefings.  In effect, the majority’s decision unmoors the venerable Blue & Gold waiver rule from its narrow application by requiring – remarkably – that contractors protest non-patent, non-solicitation issues before the deadline for receipt of proposals.  Yet the majority’s opinion isn’t the only feature of this decision that should raise contractors’ eyebrows.  As noted below, the full-throated dissent questions, inter alia, the continuing validity of Blue & Gold.


Continue Reading Dear Magic 8-Ball—Should I Protest? Critical Protest Implications Following the Federal Circuit’s Expansion of Blue & Gold’s Waiver Rule in Inserso

Like the sailors of old, the government contracting community ventures forth knowing full well that danger lies ahead – although fortunately not in the form of a kraken, leviathan, or other mythical sea monster.  Rather, these perils and risks are embedded in sweeping new regulations that, like an unseen reef, will be arriving and taking effect all too quickly.  On July 14, 2020, the FAR Council published a long-awaited (or perhaps long-dreaded) Interim Rule implementing Section 889(a)(1)(B) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Section B).  Effective August 13, 2020, Section B prohibits executive agencies from “entering into, or extending or renewing, a contract with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”  Unlike its counterpart, Section 889(a)(1)(A) of the NDAA for FY 2019 (Section A), which prohibits agencies from “procuring or obtaining equipment or services that use covered telecommunications equipment or services as a substantial or essential component or critical technology,” the restrictions of Section B go far beyond the immediate contract between the contractor and the government.  Instead, Section B directs contractors to discontinue any and all use of covered telecommunications equipment or services.  Even accounting for the choppy seas caused by the ongoing pandemic, the exceedingly broad scope of Section B promises sharp, jagged, and uncharted hazards to contractors attempting to implement compliant policies and procedures.

Continue Reading Risks, Reefs, and Wrecks: Charting a Course Through the Perils of Covered Telecommunications Equipment and Services

Hold on to your alphabet . . . GSA extends the MAS CD&F waiver of TAA & BAA for COVID-19 PPE to 8/1/20. If that made sense to you, please proceed to the final paragraph. But for the acronymically challenged, when everything is spelled out, it means that the General Services Administration (GSA) has extended through August 1, 2020, the agency’s Class Determination and Findings (CD&F) providing a temporary waiver of the Trade Agreements Act (TAA) and the Buy American Act (BAA) for certain personal protective equipment (PPE) and supplies sold through GSA Multiple Award Schedules (MAS) contracts used to support the national coronavirus disease 2019 (COVID-19) response (the Extension). Despite the limited waiver implemented under the initial CD&F, it appears that the PPE and supplies covered “are still not available in sufficient supply from Trade Agreement and Buy America statute compliant sources[,]” thus necessitating the Extension.

Continue Reading Alphabet Soup You Can Use: GSA Extends TAA & BAA PPE Waiver for COVID-19

When entering a casino, professional gamblers understand that “the house doesn’t beat the player. It just gives him the opportunity to beat himself.” This axiom is precisely why in the long run casinos make money, while gamblers see their bank accounts dwindle. The same holds true in the corporate world with respect to the creation, implementation, and maintenance of compliance programs. A company gambling on its compliance obligations does so at its own peril and must understand exactly what the “House” expects. If it doesn’t, then that company may join the unfortunate few that roll the dice or spin the wheel and come up with snake eyes or double zeros. That risk is multiplied if the company betting on sufficient compliance is receiving federal dollars, where failure can lead to catastrophic civil and criminal liability. Fortunately, the United States Department of Justice (“DOJ”) has published its version of “House Rules” that it is supposed to consult when examining whether to investigate, prosecute, or settle criminal charges against a company. In this respect, DOJ prosecutors are tasked with looking at specific factors outlined in the “Principles of Federal Prosecution of Business Organizations” (“Principles”) section of the Justice Manual. Among other factors, these Principles instruct DOJ prosecutors to consider “the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of a charging decision.” In furtherance of this mandate, the DOJ’s Criminal Division issued revised guidance on June 1, 2020, regarding the specific factors DOJ prosecutors should consider in making that evaluation. This updated version of the DOJ’s “Evaluation of Corporate Compliance Programs” (Guidance) clarifies and modifies certain areas of the version last updated in April 2019. Among other noteworthy revisions, the Guidance underscores the need for companies to ensure their corporate compliance program is:

Continue Reading Gambling on Compliance? DOJ Updates the House Rules on Corporate Compliance Program Expectations