Cost, Compliance & Risks

This year, The Rocky Horror Picture Show celebrates the 50th anniversary of its release. While that cult classic film has stood the test of time, another relic of the 1970s, the Cost Accounting Standards (CAS), is showing its age. When CAS was initially promulgated, Congress determined that the generally accepted accounting principles (GAAP) were not enough to satisfy the government’s requirements for evaluating contract costing and pricing. However, in the decades since, GAAP has evolved, and there are now areas of overlap that have arisen since CAS was first promulgated. Recognizing this overlap, the government has set in motion a review to determine which parts of CAS could be addressed by GAAP, which is the commercial standard regularly used by companies. If there were accounting areas where GAAP could stand in place of CAS, the government wants to reduce the overall burden in the procurement process by allowing contractors to more heavily rely on GAAP, which they are already using to report on their daily business activities.

Continue Reading CAS Madness Takes Its Toll: The Detailed Work of Conforming CAS to GAAP

Earlier this year, we addressed a growing sense of confusion and unease among federal contractors relating to shifting diversity, equity, and inclusion (DEI) standards. Specifically, awardees had to take stock of the Department of Justice’s (DOJ) newly launched Civil Rights Fraud Initiative. DOJ explained that it intended to pursue False Claims Act (FCA) cases against “any recipient of federal funds that knowingly violates federal civil rights law,” with an emphasis on unlawful DEI workplace programs. But given this year’s abrupt shift regarding DEI standards, contractors were left to guess which conduct could put them in DOJ’s crosshairs. On July 29, DOJ elaborated on what it considers “unlawful discrimination,” issuing Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination (“Guidance”) to all federal agencies. The Guidance outlines what DOJ deems “best practices” so that any organization that receives federal financial assistance—e.g., universities, local governments, and nonprofit organizations—can take practical steps “to minimize the risk of violations.”

Continue Reading New “Unlawful Discrimination” Guidance from DOJ Underscores Risks to Federal Grant Recipients

“Beware the Jabberwock, my son! The jaws that bite! The claws that catch!”

– Lewis Carroll: “Jabberwocky,” Through the Looking-Glass, and What Alice Found There (1872)

There is a growing sense of confusion and unease among many federal contractors and grant recipients in these early days of the second Trump administration. In a time when some agencies face dislocation and downsizing (or, as with USAID, effective disbandment), contractors may feel like Alice stepping through the Looking Glass into a world strangely inverted from the one they knew. This shift is especially evident in the administration’s rejection of seemingly all diversity, equity, and inclusion (DEI) policies—long used to prevent discrimination, comply with civil rights laws, and foster inclusive environments in the American workforce.

Continue Reading Through the Looking Glass: Shifting DEI Standards Expose Contractors to False Claims Act Risk

The California Privacy Protection Agency (CPPA) recently fined clothing retailer Todd Snyder almost $350,000 for two types of consumer privacy errors. Due to technical errors during a 40-day period, it was impossible for Todd Snyder website users to request to opt out of having their information sold or shared. When users clicked the button for the Cookie Preferences Center, the consent banner would appear but instantly disappear, thus making it impossible for anyone to actually opt out. For those who were able to actually access the preferences center, Todd Snyder over-collected information from its users who wanted to opt out of having their information sold or shared. Todd Snyder’s data request form required users to verify their identity by submitting a photograph of themselves holding their identity document, even when they wanted to opt out.

Continue Reading Check Your Process or Pay Your Fine: Recent 6-Figure Fines from the California Privacy Protection Agency

New Hart-Scott-Rodino premerger notification rules, which took effect in February, require that companies now provide more information than ever before about their prospective mergers. Meanwhile, both federal and state antitrust enforcers continue to step up scrutiny of data-related antitrust harms such as information sharing, monopolization, and price coordination, and private litigants are also filing claims. Data has long been used by companies to benchmark performance metrics, from pricing to inventory levels, and to manage revenue. But as data volume has increased, so too has the risk of violating antitrust laws through higher levels of interconnection. Big data could facilitate price coordination, potentially rising to the level of price fixing, and could thus entrench the market power of companies that have amassed data critical to the ability to compete.

Continue Reading Mo’ Data, Mo’ Problems: Antitrust Risk in the Age of Big Data

23andMe, a pioneer in the DNA testing kit industry, announced that it has filed for Chapter 11 bankruptcy protection and recently asked to select an independent customer data representative regarding any sale of user data. Its bankruptcy raises issues about data privacy and what companies must do to protect that data for the benefit of their customers and to protect themselves from litigation or violations of US and international privacy laws.

Continue Reading Follow the Breadcrumbs: Where Does Consumer Data Go as 23andMe Goes Bankrupt?

In recent months, federal contractors have seen an uptick in very specific types of contracting activity. As a result of various Executive Orders and DOGE directives for agencies to conduct contract reviews and engage in mass contract cancellations, there has been a flurry of terminations for convenience, suspensions/stop-work orders, and contract modifications. Payments—even those undisputedly…

In recent months, federal contractors have seen an uptick in very specific types of contracting activity. As a result of various Executive Orders, and DOGE directives for agencies to conduct contract reviews and engage in mass contract cancellations, there has been a flurry of terminations for convenience, suspensions/stop-work orders, and contract modifications. Payments—even those undisputedly…

Over the past few months, the second Trump administration has taken quick actions to suspend and terminate federal awards predating the transition of power. Many of these actions have resulted in the termination of “federal financial assistance”—specifically, grants and cooperative agreements. Organizations that have seen their grants and cooperative agreements terminated have pushed back through the courts with varying success, contending that agencies have acted arbitrarily in violation of the Administrative Procedure Act (APA). While there are many cases, this post provides an overview of three recent decisions in this rapidly developing landscape:

Continue Reading In the Wake of High-Profile Terminations of Grants and Cooperative Agreements, Courts Begin to Weigh In

Well, it is certainly an interesting time to be a federal government contractor. In the last few weeks, we have seen Executive Orders (EOs) flying fast and furious, and a lot of other activity impacting federal government contractors. Overall, these various new developments have resulted in a flurry of contract modifications, suspensions, and terminations for…