When last we left the Federal Government, agency buyers were staring down the Interim Rule prohibiting them from contracting with entities that use “covered telecommunications equipment” under Section 889(a)(1)(B) (“Section B”) of the National Defense Authorization Act for Fiscal Year 2019 after August 13, 2020. But then August 13 came and went. Did federal agencies do all they needed to follow the requirement? Did modifications go out to industry yet? Were amendments made? Was FAR 52.204-24 (2019) appropriately corrected to FAR 52.204-24 (2020)? What of 52.204-25 or 52.204-26? Can federal agencies act in time?


Continue Reading The Perils of Section 889 Part B Execution: The DoD Waiver

As covered recently in this blog, the Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautics and Space Administration released on July 14, 2020, an Interim Rule covering prohibitions on contracting with entities that use “covered telecommunications equipment” under Section 889(a)(1)(B) (“Section B”) of the National Defense Authorization Act for Fiscal Year 2019 (“NDAA for FY19”). Effective August 13, 2020, Section B prohibits federal contractors from “entering into, or extending or renewing, a contract with an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.” In addition, “covered telecommunications equipment or services” includes telecommunications or video surveillance equipment and services produced by (1) Huawei Technologies Company, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company, or any subsidiary or affiliate thereof, or (2) an entity “owned or controlled by, or otherwise connected to, the government of [The People’s Republic of China].”

Continue Reading DoD and GSA Release Guidance on Implementation of Section 889 Part B

Relying upon the cryptic answers provided by a Magic 8-Ball when deciding to file a protest at the United States Court of Federal Claims (COFC) may sound farcical, but a recent decision by a split panel of the United States Court of Appeals for the Federal Circuit may render this method commonplace.  In Inserso Corporation v. United States, the Federal Circuit held that the Blue & Gold waiver rule regarding the timeliness of protests against patent solicitation errors barred Inserso’s opportunity to protest the Defense Information Systems Agency’s (DISA’s) allegedly improper disclosure of total evaluated pricing and previously unreleased evaluation methodology during debriefings with certain offerors.  In what can only be described as requiring an offeror to possess preternatural foresight of all potential agency errors in a procurement, the Federal Circuit reasoned that Inserso should have known the type of information it challenged was likely to be disclosed in the debriefings.  In effect, the majority’s decision unmoors the venerable Blue & Gold waiver rule from its narrow application by requiring – remarkably – that contractors protest non-patent, non-solicitation issues before the deadline for receipt of proposals.  Yet the majority’s opinion isn’t the only feature of this decision that should raise contractors’ eyebrows.  As noted below, the full-throated dissent questions, inter alia, the continuing validity of Blue & Gold.


Continue Reading Dear Magic 8-Ball—Should I Protest? Critical Protest Implications Following the Federal Circuit’s Expansion of Blue & Gold’s Waiver Rule in Inserso

Recently, the Defense Pricing and Contracting (“DPC”) unit under the Secretary of Defense issued draft implementation guidance for Department of Defense (“DoD”) contracting officers tasked with assessing contractor requests for reimbursement in accordance with Section 3610 of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and applying the recent cost principle implemented by DFARS Class Deviation 2020-O0013—topics covered in depth by this blog. This draft guidance was first alluded to in the May 1, 2020, memorandum from Kim Herrington, the DPC Acting Director, to address “the reimbursement process from requesting the contracting officer’s determination of an ‘affected contractor’ to providing a checklist to guide collection[ ] and evaluation of costs from the [contractor] seeking reimbursement [under Section 3610].” Composed of general reimbursement implementation guidance along with two attachments—a checklist for review of a contractor’s reimbursement request and instructions for using the checklist—the DPC’s draft is, to date, the most comprehensive guidance addressing contractor requests for reimbursement under Section 3610 since the DFARS Class Deviation 2020-O0013 issued on April 8. The final guidance is expected to be released shortly.

Continue Reading DoD Issues Draft Guidance for Contractor Reimbursement Under Section 3610 of the CARES Act

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

In the seminal holiday film A Christmas Story, nine-year-old Ralphie Parker uses his diligently earned Little Orphan Annie Secret Society decoder pin to decrypt the secret message from Annie to her fans, only to express disappointment and confusion when he realizes the “secret code” he decrypted is nothing more than a marketing ploy to sell

On August 6, 2014, plaintiff-relator Andrew Scollick filed a complaint in the United States District Court for the District of Columbia against eighteen defendants for multiple violations of the False Claims Act (“FCA”) in connection with an alleged scheme to submit bids and obtain millions of dollars in government construction contracts by fraudulently claiming or obtaining service-disabled veteran-owned small business (“SDVOSB”) status, HUBZone status, or Section 8(a) status, when the bidders did not qualify for the statuses claimed. United States ex. rel. Scollick v. Narula, et al., No. 14-cv-1339 (D.D.C.). Unique in this case were not the claims against the contractors, who were alleged to have falsely certified their status or ownership. Rather, what set this case apart was that Scollick also named as defendants the insurance broker who helped secure the bonding that the contractor defendants needed to bid and obtain the contracts, and the surety that issued bid and performance bonds to the contractor defendants. Scollick alleged that the bonding companies “knew or should have known” that the construction companies were shells acting as fronts for larger, non-veteran-owned entities violating the government’s contracting requirements—and thus the bonding companies should be held equally liable with the contractors for “indirect presentment” and “reverse false claims” under the FCA.

Continue Reading The Sword of Damocles Hangs Over Miller Act Sureties and Brokers: Scollick Case Stayed Sixty Days for Mediation, but Outcome Remains Uncertain

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