Civil Investigative Demands (CIDs) are powerful pre-litigation tools the government frequently utilizes to investigate potential allegations of FCA liability. CIDs can be broad and invasive, time-consuming and expensive. What’s a company to do upon receipt of a CID? Is there any recourse? Unfortunately, neither case law nor published guidance offers the recipient much in the way of a formal, timely mechanism to challenge the scope or appropriateness of a CID. Nevertheless, there are certain practical steps one can take to reduce a CID’s scope that, in turn, will reduce disruption and expenses associated with CID compliance.
The U.S. Department of Labor has issued its final rule requiring federal contractors to provide at least seven days or 56 hours of paid sick leave each year to employees who perform work on covered federal contracts. This rule is the final implementation of Executive Order 13706, which President Obama issued in September 2015. The new rule becomes effective on November 29, 2016, though in most instances, as discussed below, it will only be applicable to new contracts awarded on or after January 1, 2017. Contractors should, however, take steps now to ensure compliance.
Recently, Bass, Berry & Sims co-hosted (along with investment banking firm Bluestone Capital Partners and accounting firm BDO) a CEO panel discussion on “Building Shareholder Value in the Mid-Tier.” Panelists included Chris Coleman, CEO of LookingGlass Cyber Solutions. Paul Leslie, CEO of Dovel Technologies. and Julian Setian, CEO of SOS International. Tim Garnett of The Avascent Group delivered a keynote presentation. The focus of the event was to discuss strategies for middle-market government contractors to build value for shareholders.
Opportunities for small businesses continue to grow as the Department of Defense (DoD) released a proposed rule of changes to its current, pilot mentor-protégé program. The proposed rule, released on Friday, September 23, comes just one month after the Small Business Administration’s (SBA) final rule establishing a government-wide mentor-protégé program for all small business concerns. While the DoD’s proposal is not as expansive as the changes within the SBA’s mentor-protégé program, it will likely further increase small business contracting opportunities within the federal marketplace. This post, along with the comparison chart below, highlight some of the similarities and differences between the programs.
- Leading aircraft manufacturers obtain U.S. government authorization to sell planes to Iran.
- Issuance of authorizations is notable but may be hard to duplicate in other industries.
- Even if authorized, companies face practical challenges if pursuing business in Iran.
Boeing and Airbus have overcome another hurdle to tapping into the Iranian market. According to news reports, on September 21, the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC) issued licenses to both companies to sell aircraft to Iran. Boeing’s license is said to authorize the sale of 80 planes; Airbus reportedly has been permitted to export 17 aircraft as part of a larger plan to sell 118 aircraft to Iran. (Although Airbus is a non-U.S. company, to the extent its aircraft contain more than a de minimis amount of U.S.-origin equipment, Airbus would need a specific authorization from OFAC.)
In an article published by SmallBizDaily, Bass, Berry & Sims attorneys Todd Overman and Sylvia Yi provided insight on the regulatory improvements to the SBA’s Women Owned Small Business (WOSB) Program that helped the federal government finally achieve its goal of awarding five percent of its annual contracts to WOSBs. As Todd and Sylvia point out in the article, Fiscal Year 2015 marked the first time the federal government has met (and exceeded) its WOSB goal, coming in at 5.05 percent. The most significant changes that led to this successful year were concentrated within the past couple of years, including a December 2015 amendment to the Federal Acquisition Regulation (FAR) authorizing contracting officers to issue sole source awards to WOSBs.
The full article, “Contracts to Women-Owned Businesses Exceeds Expectations,” was published by SmallBizDaily on September 14, 2016, and is available online.
Since the start of September, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) has settled with two different companies for alleged violations of U.S. economic sanctions on Iran. The settlements, the first with World Class Technology Corporation (WCT) and the second with PanAmerican Seed Company (PanAmerican), yielded vastly different outcomes. As summarized below, we think the divergent results serve to illustrate how OFAC weighs various factors in calculating penalty amounts.
WCT. On September 7, 2016, OFAC settled with WCT for $43,200 based on alleged violations of the Iranian Transactions and Sanctions Regulations (ITSR). The alleged violations occurred when WCT exported seven shipments of orthodontic devices to Germany, Lebanon and the United Arab Emirates with suspicion that the devices would be exported to Iran. The devices were collectively valued at almost $60,000. The exports occurred between April 2008 and July 2010.
- Dozens more Russian and Ukrainian entities have been designated as prohibited / restricted parties
- A limited General License authorizes transactions, for a brief period of time, to halt business with a specific Russian entity
- The designations reflect OFAC’s continued use of the “50 percent rule,” and the challenges of diligence on Russian transaction partners
Designations. On September 1, 2016, the U.S. Office of Foreign Assets Control (OFAC) designated 37 individuals and entities pursuant to its Ukraine-related sanctions program. OFAC last designated individuals and entities under the Ukraine program in December 2015. Continue Reading Happy September: OFAC Extends Russia/Ukraine Sanctions
The Women Owned Small Business (WOSB) Program moved its certification process from the General Login System (GLS) to the SBA One Contracting Portal at certify.sba.gov in March 2016. This has streamlined the certification process for WOSBs and Economically Disadvantaged WOSBs (EDWOSBs). The website features a checklist to prepare for certification, an “Am I Eligible?” tool, and email notifications for expiration and renewal notices.
On August 2, 2016, the U.S. Treasury Department, Office of Foreign Assets Control (OFAC) issued a Finding of Violation against two health insurance providers for activities that violated U.S. economic sanctions. The companies allegedly had issued health insurance policies that covered individuals on OFAC’s List of Specially Designated Nationals and Blocked Persons (the SDN List). In general, U.S. companies are prohibited from performing any transaction with or involving parties on the SDN List.