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Like the hits produced by DJ Khaled, the FAR Council offers “another one.” As covered extensively in this blog, federal contractors have been—or should have been (you have been working toward compliance, haven’t you?)—spending the closing days of summer ensuring compliance with the July 14, 2020 Interim Rule implementing Section 889(a)(1)(B) (“Section B”) of the National Defense Authorization Act for fiscal year 2019.  Section B prohibits the government from entering into a contract with an entity 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, and requires, among other affirmative obligations, for contractors to represent—after conducting a “reasonable inquiry”—that they do/do not use covered telecommunications equipment or services in their respective business operations. In light of the Interim Rule’s broad scope and mandatory accounting of a contractor’s operations, Section B’s compliance mandate presents another significant regulatory burden for contractors to shoulder. But contractors should fear not, because the FAR Council has heard their plaintive wails and responded on August 27, 2020, with a Second Interim Rule implementing new requirements for Section B compliance.Continue Reading The FAR Council’s Second Interim Rule Implementing NDAA Section 889(a)(1)(B): And the Hits Keep Coming!

Like the sailors of old, the government contracting community ventures forth knowing full well that danger lies ahead – although fortunately not in the form of a kraken, leviathan, or other mythical sea monster.  Rather, these perils and risks are embedded in sweeping new regulations that, like an unseen reef, will be arriving and taking effect all too quickly.  On July 14, 2020, the FAR Council published a long-awaited (or perhaps long-dreaded) Interim Rule implementing Section 889(a)(1)(B) of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019 (Section B).  Effective August 13, 2020, Section B prohibits executive agencies 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.”  Unlike its counterpart, Section 889(a)(1)(A) of the NDAA for FY 2019 (Section A), which prohibits agencies from “procuring or obtaining equipment or services that use covered telecommunications equipment or services as a substantial or essential component or critical technology,” the restrictions of Section B go far beyond the immediate contract between the contractor and the government.  Instead, Section B directs contractors to discontinue any and all use of covered telecommunications equipment or services.  Even accounting for the choppy seas caused by the ongoing pandemic, the exceedingly broad scope of Section B promises sharp, jagged, and uncharted hazards to contractors attempting to implement compliant policies and procedures.
Continue Reading Risks, Reefs, and Wrecks: Charting a Course Through the Perils of Covered Telecommunications Equipment and Services

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…

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…

A little-heralded change to the statutory definition of “commercial item” has now made its way to a proposed FAR rule, which will open up regulatory relief to a whole new class of government contractors – companies, both domestic and foreign, that regularly sell products developed at private expense to friendly foreign governments. With the December 12, 2017, passage of Section 847 of the National Defense Authorization Act of 2018, Pub. L. 115-91 (“2018 NDAA”), the statutory set of definitions for the term “commercial items” was amended. See 41 U.S.C. § 103. More specifically, Section 103(8), addressing “nondevelopmental items,” was broadened as follows:
Continue Reading New Proposed FAR Rule Makes Way for Broadening Commercial Item Status to Products Developed Exclusively for and Sold to Friendly Foreign Governments

On Dec. 4, 2018, the Federal Acquisition Regulatory Council finally released a proposed rule to implement changes to certain small business subcontracting regulations required by the 2013 National Defense Authorization Act (NDAA). 83 Fed. Reg. 62540 (Dec. 4, 2018). This is a welcome, if not long-overdue sign of progress. Over the last half-decade since the…

Here we are again. Large swaths of the federal government have been closed since December 22 because Congress and the president cannot agree on legislation to fund the government. Nearly a million federal employees are not receiving their paychecks. Even larger numbers of government contractors are – as is often the case – left squarely at the bottom of the hill, dodging the boulders of political mismanagement that are raining down in a landslide of “stop-work” orders. For example, as has been reported, the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) took affirmative steps to publicize and issue a “blanket” stop-work order on December 26 – the day after Christmas – giving many affected contractors a post-holiday cocktail of uncertainty and dread. Other agencies have followed suit, with the Departments of Justice, Agriculture, Commerce, Housing and Urban Development, Interior, State, Transportation, and Treasury issuing such orders over the past few weeks.
Continue Reading Contractors in the Crosshairs – Weathering the 2019 Government Shutdown

The Demon: What an excellent day for an exorcism.
Father Karras: You would like that?
The Demon: Intensely.

Honestly, it was challenging finding an all-audiences quote from William Peter Blatty’s “The Exorcist,” but we believe that this quote is exactly what federal contractors need to know. Today is indeed an excellent day for an information system exorcism and, unlike Father Karras, federal contractors know the name of that which they must purge: Kaspersky Lab.Continue Reading The Russian Exorcism of US Gov’t Contracts

At this point, even casual observers of the news likely have heard of Moscow-based Kaspersky Lab. In the wake of reported connections to the Kremlin and Russian intelligence entities, the cybersecurity company was famously banned as a source of supply to the United States Government by Section 1634 of the 2018 National Defense Authorization Act (“NDAA”). Effective October 1, 2018, the NDAA forbids every “department, agency, organization, or other element of the Federal Government” from using “any hardware, software, or services developed or provided, in whole or in part” by (i) Kaspersky and any corporate successors, (ii) any entities controlled by or under common control with Kaspersky and (iii) any entity in which Kaspersky has majority ownership.
Continue Reading The FAR Takes Aim at Russia’s Kaspersky Lab: What Every Contractor Must Know

Alex Major is a contributing author to the Nuix 2018 Black Report: Decoding the Minds of Hackers, a unique report that engages professional hackers, penetration testers, and incident responders to understand the security threat landscape companies face. Alex, a former intelligence officer, focuses his chapter on why companies need to properly select and structure their…