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Government Contracts

  • DoD Has Released Model Volume 1.0 of the Cyber Maturity Model Certification Framework

    DoD has released the highly anticipated final Model Version 1.0 of the Cybersecurity Maturity Model Certification (CMMC) framework. As we have reported in client alerts in December 2017May 2018October 2018 and December 2019, the development of the CMMC framework is part of DoD’s efforts to enhance the protection of sensitive data within the Federal supply chain. The CMMC framework adds a verification and audit component to DoD’s cybersecurity requirements. It is anticipated that all contractors throughout the DoD supply chain will need to reach some level of CMMC certification if they are to receive future DoD contracts and subcontracts.

  • 10 Recommended Steps to Take Following Receipt of a Notice of Proposed Debarment or Suspension

    For government contractors, a debarment immediately renders them ineligible for government contracting and, in turn, cuts off revenue, leading to potential irreparable harm. For individuals facing debarment, the effect is equally as dire, as most government contractors will immediately terminate an employee who has been proposed for debarment, or at a minimum, place the employee on leave pending a resolution. With such high stakes, those who find themselves in the crosshairs of such proceedings inevitably have questions. What should I do if I am debarred, and how does debarment affect me? How will my reputation be impacted by debarment? What can I do to avoid debarment? Unfortunately, adequate answers can be difficult to find.

  • Civilian Board of Contract Appeals Releases 2019 Annual Report

    Earlier this week, the Civilian Board of Contract Appeals (CBCA) released its Fiscal Year (FY) 2019 report. The CBCA docketed 418 new matters in FY 2019, which represents a modest increase from the 409 docketed in FY 2018. Prior to FY 2018, the CBCA had experienced docket decreases for each of the previous three years. For only the second time since FY 2014, however, the number of new cases docketed during the year exceeded the number of appeals the CBCA resolved. This latter statistic indicates that matters may proceed more slowly during 2020.

  • SBA Issues Final Rule Impacting Small Business Regulations

    On November 29, 2019, the U.S. Small Business Administration (SBA) issued an extensive final rule that made numerous revisions to its small business regulations, including limitations on subcontracting and compliance with small business subcontracting plans. (See 84 Fed. Reg. 65647-65666). This final rule, which becomes effective on December 30, 2019, implements provisions of the National Defense Authorization Acts (NDAA) of 2016 and 2017 and the Recovery Improvements for Small Entities After Disaster Act of 2015. The final rule makes multiple changes to the SBA’s regulations, the most significant of which are described below.

  • DOJ Announces Government Procurement Collusion Strike Force

    On November 5, 2019, the Department of Justice (DOJ) announced the formation of a new Procurement Collusion Strike Force (PCSF) focusing on deterring, detecting, investigating and prosecuting antitrust crimes, such as bid-rigging conspiracies and related fraudulent schemes, which undermine competition in government procurement, grant and program funding.

  • Federal Circuit Decision Addressing Salary Costs Associated with Lobbying Activities Has Broad Implications

    Imagine the following hypothetical: You are a Government contractor with cost-reimbursement contracts where the Government pays the costs of performance. You know that you cannot ask the Government to pay for lobbying costs (e.g., the costs of consultants who work to influence the outcomes of elections or legislation, and the costs of political contributions). Indeed, applicable regulations specifically call out such costs as being unallowable. Accordingly, you identify them as such in your incurred cost proposal. Suppose you also have employees who oversee some of these unallowable activities and interact with the consultants engaging them. In fact, if not for these unallowable activities, you would not have incurred a portion of these employees’ salaries. Are such salary costs unallowable? And if they are, will you be subject to penalties for requesting that the Government reimburse you for these costs? These are the types of questions addressed by the U.S. Court of Appeals for the Federal Circuit in Raytheon Co. v. Sec. of Def., 2018-2371 (Oct. 18, 2019). The court’s conclusions—based on a questionable interpretation of FAR 31.001—upend what had been established precedent at the Armed Services Board of Contract Appeals (ASBCA) ruling these costs were not expressly unallowable.

  • Unique Facts Entitle Contractor to Recover Under Mutual Mistake Theory

    On August 1, 2019, the Armed Services Board of Contract Appeals (ASBCA) held that the Air Force should bear the costs associated with a mutual mistake of fact in a contract between DynCorp International LLC (DynCorp) and the Air Force. This result suggests that the theory of mutual mistake of fact remains a viable one for contractors to consider and pursue.

  • Recent U.S. Postal Service Board of Contract Appeals Decision Sheds New Light on “Holdover” Damages Available to Government Lessors

    For many years, lessors of space to the federal government have struggled with the remedies available to them when the government continues to occupy the space after the expiration of the lease. Such “holdover” tenancies occur with some frequency, and the courts and boards have adopted disparate views with respect to the damages available to the lessor for such a holdover tenancy.

  • GAO Highlights Responsibility Exception to “Late Is Late” Rule

    Under the Federal Acquisition Regulation (FAR) “late is late” rule, a government contractor’s proposal must be received by the government by the time stated in the solicitation. If a proposal document is even one second late, it cannot be accepted by the government. The FAR provides very limited exceptions to this rule. Specifically, it states that where a proposal is received before the award and the contracting officer determines that accepting it will not delay the procurement, the government may accept the untimely proposal if: (1) it was received electronically at the initial point of entry to the government infrastructure at least one working day before the proposal submission deadline, or (2) if it was under government control before the proposal submission deadline, or (3) if only one proposal was received. These narrow FAR-based exceptions apply infrequently.

  • FAR’s Professional Compensation Clause and Keeping Things Real

    On January 24, 2019, the Court issued its decision in Sparksoft Corporation v. United States, No. 18-1708C, holding that an agency is required to evaluate the realism of offerors’ proposed compensation plans under FAR 52.222-46, Evaluation of Compensation for Professional Employees, related to the entire contract, including the firm-fixed price (FFP). This case stems from a solicitation issued by the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), seeking proposals for information technology operations, maintenance, and ancillary support. The solicitation stated that the contract would consist of both FFP and time-and-materials components, and contained FAR 52.222-46.

  • Government Contract Acquisitions and the Pending Proposal Problem

    GAO’s recent decision in Wyle Laboratories Inc., B-416528.2, raises significant questions as to the viability of proposals that are submitted before or during, and remain pending after, a government contract acquisition. This is the second recent GAO protest decision that highlights the risks of certain government contract M&A deals to pending procurements, and the decision underscores the importance of strategic planning in connection with such deals.

  • Congressional Blue-Ribbon Committee Recommends Major Changes to Certain Socioeconomic and Small Business Requirements for DoD Procurements

    Section 809 of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 directed the Secretary of Defense to establish a panel to study DoD’s procurement practices and recommend legislative and other changes aimed at modernizing those practices. The Panel has released the third volume of its final report, making a total of 58 new recommendations. As we noted in our overview of Volume 3 of the Panel’s report, a number of the recommendations relate to socioeconomic and small business issues. These recommendations attempt to streamline and improve the efficiency and effectiveness of the defense acquisition process by removing barriers to entry, revising outdated and burdensome requirements, and clarifying the preference for procuring commercial items when considering small business set-asides. We discuss Recommendations 64, 65, 79 and 80 below.

  • Section 809 Panel Recommendations: Overhaul Audit Practices and Increase Reliance on Private-Sector Accounting Rules

    As we reported previously, the Congressionally mandated Section 809 Panel (the Panel) recently issued Volume 3 of its Final Report. This volume builds upon the first two volumes of the Final Report by making additional recommendations for improving DoD’s acquisition process. This is the third of four alerts about the substance of Volume 3 of the Final Report. In this client alert, we explore recommendations regarding a broad range of financial issues at DoD.

  • Section 809 Panel: The Commercialization of Government Contracting

    As we previously reported, the Congressionally mandated Section 809 Panel recently issued Volume 3 of its Final Report. Volume 3 of the Final Report makes additional recommendations for improving the Department of Defense’s (DoD) acquisition process. This is the second of four alerts about the substance of Volume 3 of the Final Report. In this client alert, we explore recommendations that the DoD replicate the commercial contracting process.

  • Civilian Board of Contract Appeals Releases 2018 Annual Report

    This past weekend, the Civilian Board of Contract Appeals (CBCA) released its fiscal year (FY) 2018 Annual Report. The CBCA docketed 409 new matters in FY 2018, a modest increase from 385 docketed in FY 2017. Prior to FY 2018, the Board had experienced docket decreases for each of the previous five years. Also, for the first time since FY 2014, the number of new cases docketed during the year exceeded the number of appeals that the CBCA resolved.

  • GAO Publishes Fiscal Year 2018 Bid Protest Statistics

    On November 27, 2018, the Government Accountability Office (GAO) published its annual report on bid protest statistics. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for Fiscal Year 2018 bid protest activity. The GAO’s report also includes a chart providing similar bid protest statistics for Fiscal Years 2014-2018. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

  • Pillsbury's Post-Election Outlook

    The 2018 Midterm Election played out as most poll forecasters speculated. Although several races have yet to be decided, Republicans have retained control of the Senate, but lost at least 29 seats, allowing the Democrats to wrest back control of the House for the first time since 2010.

  • 2018 Election Night Guide

    Pillsbury’s Political Law and Public Policy groups break down the need-to-know numbers for this year’s election. Pillsbury’s biennial Election Night Guide examines the potential outcomes for the 2018 Congressional and Governor’s races. Our Public Policy team is also preparing a post-election guide that will be useful in navigating potential changes in Congress.

  • The Fiscal Year 2019 NDAA Imposes Government-Wide Limitations on the Use of Lowest-Price Technically Acceptable Procurements

    The annual Department of Defense (DoD) authorization bill has long been used to impose government-wide procurement reforms that extend beyond the DoD. The recently enacted National Defense Authorization Act (NDAA) continues this tradition, by restricting civilian agencies’ use of the much-derided lowest price, technically acceptable (LPTA) procurement process, instead of the more fulsome best value trade-off process. The new NDAA now imposes limitations on the use of LPTA procurements that were previously imposed on the DoD and applies those limitations government-wide.

  • DoD’s Enhanced Debriefings: GAO Provides Timeliness Guidance

    In previous Client Alerts (found here and here), we have discussed the new rules issued by the Department of Defense (DoD) that significantly bolster the rights of government contractors to receive “debriefings” pursuant to Part 15 of the Federal Acquisition Regulation (FAR), following the award of defense contracts. The Government Accountability Office’s (GAO) recent decision in State Women Corporation, B-416510 (July 12, 2018) provides important new guidance regarding GAO’s timeliness rules in the context of these newly enhanced debriefings.

  • New York Response to #MeToo: New Laws Target Sexual Harassment

    Last month, Gov. Andrew Cuomo signed into law the 2019 New York State budget. The budget bill included a series of laws aiming to expand the scope of worker protections against sexual harassment, to limit employers’ ability to keep claims of sexual harassment confidential, and to increase employer and employee education on sexual harassment.

  • New Proposed DoD Cyber Guidance May Fuel Bid Protest Docket

    Department of Defense (DoD) cybersecurity requirements, referred to as Safeguarding Covered Defense Information and Cyber Incident Reporting went into effect at the start of the year, and have been met with an array of questions from contractors eager to comply, but unsure of the exact standards they are expected to meet. A long list of Frequently Asked Questions (FAQs) issued by DoD on April 2, 2018, has provided some clarity. However, significant areas of ambiguity remain, and language concerning a Contractor’s compliance with the new contract clause is finding its way into new contract solicitations. DoD has proposed guidance to answers some of those questions, and contractors will have until the end of May to provide feedback to the Government on how helpful—or unhelpful—the guidance is.

  • DFARS Clause Blocks Funding for Unsafe Projects in Afghanistan

    A new rule prohibits the use of funds for DoD construction and infrastructure programs and projects in Afghanistan that cannot be safely accessed by U.S. Government personnel.

  • Changes Imminent for GAO Bid Protests

    The Government Accountability Office is implementing several important changes to the bid protest process effective May 1. We summarize the most notable rule changes, from the electronic docketing system requirements to a new filing fee.

  • Defenders of the Debriefing

    New rules for all Department of Defense agencies expand offerors’ rights in connection with post-award debriefings in federal procurements, marking an important step in the direction of transparency and fairness.

  • Proposals Should Carefully Address Pending Corporate Deals

    For government contractors that may experience a change of ownership, a spinoff, or even a merger, three recent bid protest denials from the GAO are highly instructive.

  • Administration Issues “Legislative Outline for Rebuilding Infrastructure in America”

    The Trump Administration's legislative proposal to rebuild American infrastructure identifies a number of specific laws that will require amendments. Here is a brief review of some of the plans many provisions.

  • SBA Proposed Rule Standardizes SDVO SBC Ownership & Control Standards

    A new Small Business Administration rule aims to simplify prior qualification standards under Department of Veterans Affairs and SBA Service-Disabled Veteran-Owned Small Business Concerns programs.

  • The 2018 Government Shutdown – How Can Contractors Preserve Rights?

    Contractors suffered cost impacts and uncertainty during the recent three-day government shutdown. What happens if a long-term deal can't be reached?

  • December 31, 2017 Deadline for Cybersecurity under DFARS 252.204-7012 Re-Interpreted

    With the December 31 deadline for cybersecurity compliance just around the corner, the Department of Defense has clarified some of its expectations.

  • Changes to Audit and Truth in Negotiations Act in FY 2018 NDAA

    The 2018 NDAA Conference Report leaves little question that Congress remains unhappy with the Defense Contract Audit Agency’s (DCAA) audit backlog.

  • Changes to Supply Chain Management and Commercial Item Contracting in FY 2018 NDAA

    The latest National Defense and Authorization Act Conference Report proposes changes to supply chain management, the definition of a “subcontractor” and commercial item contracting that could impact your business.

  • Two-Minute Warning: Preparing for a Possible Government Shutdown

    For U.S. government contractors, the fallout from a threatened shutdown—let alone an actual one—ranges from inconvenient to disastrous. Businesses that derive significant profits from government contracting should consider a range of contingency planning options.