Alex Major and Marcos Gonzalez discuss the Federal Acquisition Supply Chain Security Act and how it affects contractors in this featured comment for the Government Contractor.
Welcome, dear readers, to the height of protest season! Around the end of the federal fiscal year, the number of contract awards being made increases greatly. Which means so do the number of protests challenging those award decisions. If you are currently asserting or defending a protest (or think you will be before October is over), you are certainly not alone. Unfortunately, if you are somewhat confused about the details, mechanics, timing and procedures relating to protests—well, you also are not alone. This is undoubtedly one of the most complex and confusing areas of government contracting. But fear not! We’re here to help clear up the confusion and get you on the right track, to ensure you obtain those awards improperly awarded to a competitor and maintain those awards that you fairly won. To that end, below is a summary list of the 10 most common bid protestor mistakes, with links to more detailed information about each mistake and how to avoid it!Continue Reading Avoiding Common Bid Protest Mistakes: A Seasonal Guide to Our Top 10 Protest Don’ts!
Parties litigating False Claims Act (FCA) cases have long struggled with a thorny question around the essential element of scienter (the defendant’s intent, or state of mind): What/how much does a contractor need to know when submitting an invoice for payment for the related claim to be considered knowingly false when made? When that question arises in FCA litigation, a court’s determination of that essential element of scienter/knowledge often pivots on what the judge believes matters more:
(A) The defendant’s subjective belief at the time a claim is made; or
(B) An objective textual reading of what a person may have known or believed when a claim is made.Continue Reading The False Claims Act’s Fuzzy Scienter Element Brought into Sharp Focus
On April 27, 2023, the Small Business Administration (SBA) issued a final rule, finalizing a September 9, 2022 proposed rule, and making a myriad of changes to the Small Business Regulations. Those changes are effective at the end of this month, on May 30, 2023. We will be covering a number of those changes in upcoming posts. But for now, we’re focusing on a change that will make some contractors very happy and other contractors very worried: real, negative consequences for small businesses that fail to comply with 13 CFR 125.6, which governs subcontracting limitations for small business set-aside contracts over the simplified acquisition threshold (presently defined in FAR 2.101 as $250,000).Continue Reading Small Business Contractors Rejoice or Repent: Final SBA Rule Adds Teeth to 13 CFR 125.6 Subcontracting Limitations
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 IS the Battle: Supreme Court to Address the FCA’s Scienter Standard
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
The Federal Acquisition Regulation (FAR) Council has returned from an extended vacation to publish a final rule to align the FAR with similar subcontracting regulations implemented by the Small Business Administration more than a half decade ago. McCarter & English Government Contracts and Global Trade co-leaders Franklin Turner and Alex Major and Senior Associates Cara
On May 12, 2021, the Biden administration unveiled a rather expansive executive order intent on “Improving the Nation’s Cybersecurity.” The lengthy and sweeping order is a comprehensive national cybersecurity overhaul. In addition to requiring significant improvements to the cybersecurity posture of the Federal Civilian Executive Branch (FCEB) agencies, the order also prescribes:
On January 25, 2021, President Biden issued a sweeping Executive Order titled “Ensuring the Future Is Made in All of America by All of America’s Workers” (Order), which is intended to be the first step toward fulfilling his campaign promise to commit to American businesses by strengthening domestic preference rules in government procurement. The Order states the administration’s policy that the US government should “use terms and conditions of Federal financial assistance awards and Federal procurements to maximize the use of goods, products, and materials produced in, and services offered in, the United States.” While this is not a novel policy objective—indeed, the Trump administration articulated similar goals—the Order introduces certain dramatic steps in furtherance of that objective that may ultimately have significant implications for contractors.
Continue Reading Big Changes to Buy American—Biden Issues Broad Executive Order on the Future of Domestic Purchasing in Federal Procurement
On the eve of the inauguration of President Biden, a lingering Trump-era policy finally made its way into the Federal Acquisition Regulation (FAR). On January 19, 2021, the FAR Council issued a final rule implementing changes first revealed in Executive Order 13881 (the E.O.), Maximizing Use of American-Made Goods, Products, and Materials (84 FR 34257, July 18, 2019). As we discussed in an earlier post on this topic, the E.O. mandated significant modifications to FAR clauses implementing the Buy American statute by (1) substantially increasing domestic content requirements and (2) increasing the price preferences for domestic products. On September 14, 2020, the FAR Council issued a proposed rule designed to implement the requirements of the E.O. (85 FR 56558, Sept. 14, 2020). Our post on that development noted that, while the proposed rule incorporated the overarching objectives of the E.O., it also significantly expanded on the E.O. by reintroducing the domestic content test for commercially available off-the-shelf (COTS) items made wholly or predominantly of iron or steel, or a combination of both (with the exception of fasteners).
Continue Reading FAR Council Issues Final Rule to Implement Trump Executive Order on Significant Buy American Changes