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On January 4, 2021, the National Institute of Standards and Technology (NIST) published proposed rules for comment changing regulations promulgated under the Bayh-Dole Act (35 U.S.C. §§ 200-204), which allow businesses and nonprofit institutions, in most circumstances, to take title to inventions made under federally funded projects (subject inventions) and to freely commercialize items, and methods used to produce items, embodying subject inventions.
Continue Reading NIST on Track to Clarify Bayh-Dole to Ensure High Prices Cannot Be Used as Grounds for Exercising March-in Rights – Or Is It?

Each year, Congress presents us in Title VIII of the National Defense Authorization Act (NDAA) a potpourri of procurement reforms, changes, and additions. Some are effective immediately, while some are bound for rulemaking and regulation and surface years from enactment. Some require analyses, reports, and studies which have no immediate impact but provide a roadmap that can and should be used by government contractors in their business planning. Finally, some provisions of the NDAAs just wither away and have no impact whatsoever. Nineteen days before the Trump Administration ended, the US Senate followed the US House of Representatives in overriding the President’s veto of the William (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (H.R. 6395) (FY2021 NDAA), making it law on January 1, 2021.  Happy New Year! As for its Title VIII, the FY2021 NDAA is no different from its predecessors in its procurement potpourri. Here’s a tour of key provisions you oughta know.
Continue Reading Here to Remind You of the Key Provisions of the Fiscal Year 2021 National Defense Authorization Act – You Oughta Know!

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

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…

So you want to acquire a government contractor? Makes sense, and you’re not alone. Over the past few years, the federal contracting landscape continues to evolve as a result of mergers and acquisitions (M&A), primarily involving the acquisition of small and midsize contractors by larger entities as a means to quickly expand into new federal markets. This trend is especially prevalent in the information technology (IT) market, where the acquisition of small or midsize IT firms with new capabilities can provide larger firms with shiny new toys to share with their roster of government clients to gain a larger share of the federal IT “pie,” if not create—almost overnight—new IT market leaders in areas such as cloud computing, cybersecurity, software, and predictive intelligence.Continue Reading Integrating Cybersecurity Into M&A Compliance Reviews: Avoiding Hidden Cyber Risks in the Acquisition of Government Contractors

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