I commented on an article published in RealClearDefense, on the impact of the April executive order highlighting the Trump administration’s intention to renew the focus on sourcing domestic resources and employees for government contracts. The order requires increased enforcement of current “Buy American” laws, which date back to the Depression-era statutes Congress passed in 1933. The Office of Management and Budget (OMB) and the Commerce Department released follow-up guidance in late June requiring all federal agencies to prepare a compliance plan by September 15, 2017.
The GAO recently denied Leidos Innovations Corporation’s protest of a determination that Leidos was ineligible to receive a $272 million award by the U.S. Army despite Leidos having both the highest-rated technical proposal and the lowest evaluated cost. The GAO decision, which affirmed the agency’s determination that Leidos was non-responsible because one of Leidos’ subcontractors did not have the necessary base access, is an important reminder that prime contractors should thoroughly vet their subcontractors to ensure, to the extent possible, all necessary qualifications are satisfied for the associated contract.
In an article published by Law360, I provided expanded insight on a U.S. Government Accountability Office (GAO) jurisdiction gap that occurred between October 1 and December 14, 2016, due to a legislative oversight. During this lapse, there was no venue with jurisdiction to hear protests of civilian agency task order awards. Congress has now given GAO permanent jurisdiction, but recent rulings dealing with the lapse have made clear that the legislation will not be applied retroactively. I suggest that now “that the GAO’s jurisdiction to hear protests of both civilian and DOD task order protests is permanent, albeit set at different thresholds, it is unlikely that such lapses will occur again anytime soon.”
The full article, “An Update On Aftermath Of GAO Jurisdiction Gap,” was published by Law360 on April 6, 2017, and is available online.
Additional insights can be found in my earlier blog post on the topic, “Timing is Everything – GAO Refuses to Apply Jurisdiction Retroactively,” published on March 20, 2017.
As we previously reported, Congress has taken its final steps in repealing Obama’s Fair Pay & Safe Workplaces rule, one of the most controversial rules enacted by the Federal Acquisition Regulatory (FAR) Council under President Obama. On February 6, the Senate gave the final vote of approval of the House Resolution overturning the rule, and on March 27, President Trump, unsurprisingly, signed the Resolution into law. At the same time, he also signed legislation overturning three other rules, including the U.S. Bureau of Land Management’s land use planning rule and two rules issued by the U.S. Department of Education. Though much of the Fair Pay rule had never been implemented due to a court injunction, this legislation formally revokes the rule and ensures that the FAR Council cannot enact a similar rule without Congressional approval.
As we previously reported, following the start of the Trump Administration, Congress has moved aggressively to overturn regulations passed in the final days of the Obama Administration through the rarely-used powers in the Congressional Review Act (CRA). This focus on CRA actions, which is in keeping with the Trump Administration’s broader goal of eliminating costly regulations, has taken time and attention in the early days of the 115th Congress because the CRA gives Congress a limited amount of time to reverse regulations. One of the rules that has been targeted for elimination is the Fair Pay & Safe Workplaces rule, a rule subject to much debate and controversy since its enactment in August 2016. Recent Senate action makes it likely that the rule, which would have imposed billions of dollars in costs on taxpayers over the next decade, will be eliminated next week.
In an article published by Law360, I provided insight examining the Government Accountability Office’s (GAO) rejection of bid protests questioning an unusual contracting model based on point-scoring that emphasized technical factors over cost. In this case, the General Services Administration (GSA) awarded a $65 billion IDIQ contract for IT services, Alliant II, to 60 of the highest rated offerors by first ranking offerors technically and then determining if the top 60 offerors’ prices were fair and reasonable. As I point out in the article, “[y]ou want companies that are on the cutting edge of IT services … you want the guys that really know their stuff. If you think about the fact that these providers on Alliant II are likely going to be called into agencies to help them deal with cybersecurity issues that go far beyond IT, into national security, we want the best IT service providers in the country to be on this contract.”
The full article, “GAO Opens Door For More Point-Scored Contracts,” was published by Law360 on January 30, 2017, and is available online (subscription required).
In an article published by BNA’s Federal Contracts Report, I discussed three of the most costly of President Obama’s 2016 Executive Orders impacting government contractors, orders that are likely to be overturned by President-elect Trump. In the article, I argue that, while the Executive Orders – Fair Pay and Safe Workplaces, Minimum Wage, and Sick Leave – may have been intended to improve the federal acquisition process, they place expensive and burdensome compliance obligations on contractors, particularly those providing commercial goods and services, and may therefore be amended or overturned. In total, the Obama Administration estimated the regulations implementing just these three Executive Orders would cost $12 billion over the next decade, costs that will ultimately be borne by taxpayers, and there is reason to believe that estimate is low.
The full article, “The (Hopefully) Short, Costly Life of President Obama’s Executive Orders,” was published by BNA’s Federal Contracts Report on January 19, 2017, and is available online (subscription required) or in the PDF below.
I also provided comments on this topic for a February article in BNA’s Federal Contracts Report, “Executive Orders: Contractors in Regulatory Limbo Under Trump, Lawyers Say.” That article was published February 2, 2017 and is available online.
The FAR Council issued a final rule on December 20, 2016, amending the Federal Acquisition Regulation (FAR) to add FAR Subpart 24.3, requiring privacy training for all contractor employees who (1) access a system of records; (2) handle personally identifiable information (PII); or (3) design, develop, maintain, or operate a system of records. A “system of records” is a “group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifying particular assigned to the individual.” 5 U.S.C. § 552a(a)(5); FAR 24.101.
Just one month after the U.S. District Court for the Eastern District of Texas shut down a Fair Pay and Safe Workplaces final rule, the District Court has enjoined the implementation of the Department of Labor’s (DOL) final rule updating its Fair Labor Standard Act (FLSA) exemptions. Had these gone into effect, they would have had a significant impact on government contractors’ labor costs.
In 2014, President Obama directed DOL to update and modernize its overtime regulations to be consistent with the intent of the FLSA. The FLSA provides for minimum wage and overtime pay protections for those covered by the Act. Exempted employees generally fall into the executive, administrative and professional (EAP) categories, and DOL has used the following three tests to determine whether an exemption applied: salary basis test, salary level test and duties test. “Exempt” employees are not eligible for overtime pay (time and a half) for hours worked over 40 in a work week.
Over the past year, the big news for companies doing or considering business in Iran has been the scaling back of U.S. and EU economic sanctions. Many global businesses are now permitted to operate in this once prohibited market. Before we celebrate too enthusiastically, however, let’s stop for a moment to consider a potential challenge for some companies trying to capitalize on this new opportunity.
This time, we are focusing on a conundrum specific to companies that contract with the U.S. government.