Contract Performance & Administration

On April 8, 2020, the Department of Defense (“DoD”) issued a Class Deviation authorizing contracting officers to use a new cost principle – DFARS 231.205-79, CARES Act Section 3610 Implementation – to permit the reimbursement of certain leave-related costs incurred by contractors in accordance with Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Pub. L. 116-136).  Additional clarification regarding the application of the new cost principle was issued on April 9, 2020, through the publication of a “living” FAQ document intended to answer critical questions for contractors.  While the FAQ information does not clarify the Government’s position on all potential issues associated with the implementation of Section 3610, it does provide a blueprint that contractors seeking reimbursement should follow.
Continue Reading DoD CARES After All – New Cost Principle and DFARS Clause Implements CARES Act for Certain COVID-19 Costs

On April 8, 2020, a final rule (the Rule) was issued amending the Defense Federal Acquisition Regulation Supplement (DFARS) and implementing Section 852 of the National Defense Authorization Act (NDAA) for FY 2019 to provide for accelerated payments to DoD’s small business prime contractors and subcontractors supporting DoD contracts. The Rule applies to contracts at or below the simplified acquisition threshold (SAT) – currently $250,000 for DoD contracts – and to contracts for the acquisition of commercial items including commercially available off-the-shelf (COTS) items. With an estimated 96% of DoD contracts valued at or under the SAT, the rule appears to reflect DoD’s recognition that it is in the best interests of the government and small business contractors alike to apply this Rule to contracts at or below the SAT and to accelerate payments to small business prime contractors and subcontractors.
Continue Reading DFARS Final Rule Establishes Goal of 15-Day Accelerated Payments for Small Business Contractors

In a Class Determination and Findings (CD&F) published on April 3, 2020, the GSA’s Senior Procurement Executive directed that certain limited supplies to combat the COVID-19 virus identified in the CD&F may be acquired without regard to the domestic preference restrictions imposed by the Trade Agreements Act (TAA) and the Buy American Act (BAA) clauses included in the GSA Schedule and GSA individual procurements. The Senior Procurement Executive concluded that waivers of the domestic preference restrictions were warranted based on scarcity in that the supplies were deemed “temporarily unavailable in sufficient quantity or satisfactory quality” or not “mined, produced, or manufactured in the United States in sufficient and reasonably commercial quantities of a satisfactory quality.”
Continue Reading General Services Administration Issues Class-Wide Waiver of Trade Agreements Act and Buy American Act for All GSA Contracts and Schedules for Supplies to Combat the COVID-19 Virus

As most federal contractors know all too well, the United States Government is not always an easy customer.  This is particularly true in circumstances where a contractor encounters performance impacts and seeks to recover increased costs and/or endeavors to secure a schedule extension.  The Government’s negotiating posture in response to these types of requests is seldom inviting.
Continue Reading DoD Extends a Hand to Federal Contractors Navigating the Impacts of COVID-19

This week, the State of Hawai`i instituted some of the most sweeping emergency orders in the country in the response to the COVID-19 pandemic. For tourists, tourism, federal employees, federal contractors, and the millions of island residents, this means a very different kind of stay while in paradise.
Continue Reading COVID-19 Response — Locked In Paradise — Hawai`i Issues Robust Stay-at-Home and Mandatory Quarantine Orders for Visitors and Residents

As most government contractors are aware, progress payments are a form of contract financing in which the Government pays the contractor based on cost throughout performance of the contract, up to a cap dictated by the terms of the contract.  On March 20, 2020 – “in response to the Coronavirus Disease” – the Department of Defense issued a Class Deviation to contract clauses DFARS 252.232-7004 and FAR 52.232-16, the effect of which is to increase the progress payment rates to 90% for large business concerns and 95% for small business concerns – an increase of 10% and 5%, respectively – from the customary progress payment rates established by DFARS 232.501-1.  The Class Deviation provides that the change is to remain in effect until rescinded.
Continue Reading COVID-19 Update: Department of Defense Issues Class Deviation, Increasing Certain Progress Payment Ceilings

The Trump administration’s focus on enhancing “Buy American” requirements in federal procurement took a leap forward on July 15, 2019, with the issuance of an Executive Order (EO) on Maximizing Use of American-Made Goods, Products, and Materials. Unlike the administration’s previous executive orders – Executive Order 13788 of April 18, 2017 (Buy American and Hire American) and Executive Order 13858 of January 31, 2019 (Strengthening Buy American Preferences for Infrastructure Projects), this EO contains instructions to the FAR Council to change regulations that have been in place since the Eisenhower administration, tightening restrictions on acquiring foreign end products.  In particular, the EO makes dramatic changes to the domestic origin requirements for iron and steel products.
Continue Reading Buy (More) American: The Trump Administration Finally Ups the Ante on Domestic Origin Requirements (With the Final Impact Still TBD)

DoD’s recent efforts to address cybersecurity have caused confusion and chaos for Government contractors. As we all know, cybersecurity is an issue that is impossible to ignore, and the sobering reality is that compliance with federal cybersecurity requirements is critical to avoiding catastrophic liability. Recently, McCarter & English Government Contracts and Export Controls co-leaders Alex…

As we stated last month, further restrictions are afoot on the use of Chinese technology in federal acquisitions. An Interim Rule issued by the Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) (collectively, the “FAR Council”) implements the first phase of Section 889 of the FY2019 National Defense Authorization Act (NDAA). The Interim Rule, effective August 13, 2019, broadly prohibits federal agencies, federal contractors, and grant or loan recipients from procuring “covered telecommunications equipment or services” produced by Huawei Technologies Company and ZTE Corporation and, with respect to certain public safety or surveillance applications, Hytera Communications Corporation, Dahua Technology Company, and Hangzhou Hikvision Digital Technology Company. In particular, federal suppliers are prohibited from sourcing “substantial or essential component of any system, or as critical technology as part of any system” from the foregoing companies.
Continue Reading Know Your Supplier: Effective August 13, 2019, Certain Chinese Telecoms Banned From Federal Procurement

Changes to the Federal Acquisition Regulation’s (FAR) small business subcontracting rules have been slow in coming, but the FAR Council is finally catching up with the Small Business Administration (SBA) in making regulatory modifications to implement a few changes intended to help prime contractors reach their small business subcontracting goals as required by Section 1614 of the National Defense Authorization Act of 2014 (2014 NDAA). Specifically, the changes focus on aiding prime contractors possessing an individual subcontracting plan for a contract with a single executive agency. Now, in such instances, the prime contractor will receive credit toward its subcontracting goals for awards made to small business concerns employed at any tier by subcontractors through their respective subcontracting plans. This should be helpful news to prime contractors.
Continue Reading The FAR Council and the Hare – The Race to Credit for Lower-Tier Small Business Subcontracting