The General Services Administration (GSA) released its Class Deviation CD-2021-13 (the GSA Deviation), which, effective immediately, “provides instructions for the GSA acquisition workforce on when to include a new clause [i.e., Federal Acquisition Regulation (FAR) 52.223-99] (the Clause) in GSA solicitations and contracts and contract-like instruments.” Unlike the recent instructions and directions provided by the Civilian Agency Acquisition Council (CAAC) and the Department of Defense (DoD) and its DFARS Class Deviation (discussed in detail here), the GSA provided “GSA-specific implementation timelines for solicitations, new contracts, and existing contracts” to ensure that by October 8, 2021, all covered solicitations, new contracts, and existing contracts subject to Executive Order 14042, “Ensuring Adequate COVID Safety Protocols for Federal Contractors” (EO 14042), adhere to its mandates and the evolving guidance issued by the Safer Federal Task Force. This implementation includes the insertion of the Clause into new and existing GSA solicitations and Federal Supply Schedule (FSS) contracts awarded after October 15, 2021, and new contracts and leases awarded after November 14, 2021. The instruction applies broadly even to solicitations or contracts that have a value equal to or less than the simplified acquisition threshold (SAT) or are for the supply of products (either solely for products or for products and services). Moreover, the GSA is instructing its contracting officers to issue a letter to all existing contractors asking for their consent to a modification including the Clause. The end result is the expectation that virtually all GSA contracts and contract-like instruments will require all covered employees to be fully vaccinated by December 8, 2021. An analysis of the GSA Deviation’s key points, highlighting the confusion related to subcontract flow-downs, follows below.

Continue Reading This Will Only Hurt a Bit: The GSA Mandates COVID-19 Vaccines in Nearly All Existing Contract Types

Four memoranda, released in the last several business days, provide federal contracting officers guidance and suggested clauses to implement President Biden’s Executive Order 14042 (the Executive Order) in federal contracts imposing mandatory vaccination and workplace safety protocols for covered federal contractors and their employees as early as October 15, 2021. Issued by the Federal Acquisition Regulatory Council (FAR Council) (the FAR Council Memo), the Civilian Agency Acquisition Council (CAAC) (the CAAC Memo), the Principal Director, Defense Pricing and Contracting for the Department of Defense (DoD) (the DoD Memo), and the General Services Administration’s Senior Procurement Executive (the GSA Memo) (which we will be discussing in a separate posting), the memoranda move quickly to provide all procuring activities the necessary tools to ensure that by October 8, all solicitations and contract subject to the Executive Order adhere to its mandates and the evolving guidance issued by the Safer Federal Workforce Task Force (issued September 24) (Task Force Guidance). For those unfamiliar with the Executive Order and the resulting Task Force Guidance, please feel free to review our prior discussions of those issues here and here.

Continue Reading The Clauses Implementing Vaccination Mandate for Federal Contractors Are Out—Key Considerations for Contractors

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:

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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

The Department of Defense (DoD) has finalized regulations prohibiting the use of telecommunications equipment or services from Chinese entities or from entities that are owned or controlled by either the People’s Republic of China or the Russian Federation. The Final Rule, which went into effect on Friday, January 15, 2021, prohibits the DoD from buying or using banned telecommunications equipment and services that are a “substantial or essential component of any system” or that constitute a “critical technology.”

Continue Reading Changes to DoD Regulations Banning Chinese Telecommunications Equipment and Services Offer Potential Opportunities for Contractors

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

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

Contracting with the Department of Defense (DoD) can provide healthy opportunities for businesses of all sizes.  That said, it is no secret that contractors without the cash resources to finance their performance while awaiting payment from the Government may find themselves swallowed whole by their contractual obligations. Many defense contracts are long-term endeavors; consequently, a contractor’s sustainability and profitability can be impacted by the sapping of available manpower while also requiring significant capital investment to manage material, labor, overhead, and other expenses incurred when performing a contract. In many cases, the upfront financial investment required serves as a barrier to entry into the government marketplace for nontraditional defense contractors. However, the DoD has recently unearthed and reanimated one of the more impressive dinosaurs buried in the Federal Acquisition Regulation. Welcome to the world of performance-based payments (PBPs).

Continue Reading The Evolution of Contract Financing: Resurrecting Performance-Based Payments Under Fixed-Price Contracts

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