As the frequency and sophistication of existential threats to national security over the past decade have drastically increased, the United States’ reliance on software to identify threats, rapidly share information, and manage its military resources has increased. Accordingly, the federal government’s ability to timely develop, procure, and deploy software to the field has been—and continues to be—a critical component of national security. Notwithstanding the growing importance of software to national security, the Department of Defense (DoD) software-acquisition process mirrors the lengthy, inflexible process typically reserved for the acquisition of major weapon systems. As a result, the DoD’s software development and acquisition cycles are significantly longer for their commercial counterparts, thus affecting the DoD’s ability to deliver timely solutions to users and rapidly respond to urgent threats.
Continue Reading Slow and Steady Doesn’t Always Win the (Acquisition) Race: The CODER Act Aims to Transform DoD Software Acquisition
Guerrillas of the NIST: DOD Re-Attacks Supply Chain and Contractor Cybersecurity (Part II)
As DOD continues to expand its supply chain cybersecurity demands on federal contractors, McCarter & English Government Contracts and Export Controls co-leaders Alex Major and Franklin Turner provide critical guidance for federal contractors in a two-part Feature Comment for Thomson Reuters’ The Government Contractor. In the comprehensive article they address not only the recent and
Guerrillas of the NIST: DOD Re-attacks Supply Chain and Contractor Cybersecurity (Part 1) – The Government Contractor
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
Know Your Supplier: Effective August 13, 2019, Certain Chinese Telecoms Banned From Federal Procurement
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
Never Stop Never Stopping: Defense Department Quietly Unveils Proposed Cybersecurity Maturity Model Certification Standards and Confirms the Allowability of Certain Cybersecurity Costs
Cybersecurity. It’s never over, is it? In what can only be described as a “soft” release, the Department of Defense (DoD) has slowly and quietly begun to reveal its intent to provide federal contractors with formal cybersecurity certification as early as next year. The program, known as the Cybersecurity Maturity Model Certification (CMMC), is an effort to streamline the acquisition process by providing acquiring agencies and consenting contractors with more exacting cybersecurity requirements for forthcoming acquisitions.
Continue Reading Never Stop Never Stopping: Defense Department Quietly Unveils Proposed Cybersecurity Maturity Model Certification Standards and Confirms the Allowability of Certain Cybersecurity Costs
International Trade Update: U.S. Heightens Tariffs on Chinese Goods; China Reciprocates
Effective Date of Increase and Customs Reporting Guidance
On May 9, 2019, the Office of the U.S. Trade Representative (USTR) announced an increase in duties pursuant to Section 301(b) of the Trade Act of 1974, as amended (Section 301), from 10% to 25%, on over 5,700 Harmonized Tariff Schedule of the United States (HTSUS) products imported from China. The increase, covering $200 billion in products that were subject to 10% additional duties since September 24, 2018, was set to rise to 25% at the beginning of this year, only having to be postponed twice to allow U.S.–China trade negotiations to bear fruit. They did not.Continue Reading International Trade Update: U.S. Heightens Tariffs on Chinese Goods; China Reciprocates
2019 Government Shutdown: The Export Controls, International Trade, and CFIUS Edition
Week three of the U.S. Government shutdown has begun, and agencies responsible for administering export controls, sanctions, and other trade-related functions have been affected by the lapse in federal appropriations. This means that companies need to be prepared for extended licensing and processing wait times, along with increased wait times for any communications with the agencies, including advisory opinions. Accordingly, companies must operate — and continue to operate — in accordance with law and regulation. The shutdown requires increased vigilance on the part of those regulated by or working with the government (see here for advice for federal contractors). With that in mind, see below for the key international trade-related agencies impacted by the shutdown and suggestions on how industry should properly respond.
Continue Reading 2019 Government Shutdown: The Export Controls, International Trade, and CFIUS Edition
The U.S. Government Is Asking Industry to Help Identify ‘Emerging Technologies’ – STAT
In a highly unusual move, the federal Bureau of Industry and Security is asking U.S. industry to help identify emerging technologies that are essential to national security but currently escape the tangle of laws and regulations that govern — and in some cases restrict or prohibit — the sale or transfer of commodities, technology, and technical data to foreign businesses, research institutions, government and private organizations, and individuals who are neither U.S. citizens nor lawful permanent residents.
Emerging Technologies May Get Export Controls and CFIUS Reviews This Holiday Season
On November 19, 2018, the Bureau of Industry and Security (BIS) published an Advanced Notice of Proposed Rulemaking (Notice) seeking comments from industry on how to define and identify “emerging technologies” that currently are not export controlled but which ought to be because they are “essential to the national security of the United States.” Yes, you read that correctly – BIS seeks industry input as to whether it should subject industry’s emerging technologies to export controls and, by extension, to likely review by the Committee on Foreign Investment in the United States (CFIUS) of any sales or control of such technology to foreign investors. For those who have something to say about this impending regulatory storm, comments on the Notice are due to BIS by December 19, 2018.
Continue Reading Emerging Technologies May Get Export Controls and CFIUS Reviews This Holiday Season
FIRRMA Becomes Law, Reforming CFIUS, Export Controls, and Forever Changing Diligence in Foreign Direct Investment and Structuring of Public and Private Equity Deals – Intellectual Property and Technology Law Journal
In June 2018, the White House[1] outlined the threats posed by China’s investment in and acquisition of U.S. companies, noting that China is engaged in “state-sponsored IP theft through physical theft, cyber-enabled espionage and theft, evasion of U.S. export control laws, and counterfeiting and piracy.”[2] Apparently, someone recognized that those $1 million-to $5 million-dollar companies in Silicon Valley may be getting capital injections from folks who are not in it simply for the investment return. Worse still, until now, the United States has had no mechanism to review or prevent such foreign investment and resultant control.