We are looking forward to presenting a training webinar titled, “The Federal Government’s Continuing IT Upgrade – Changes in Cloud Computing & Cybersecurity” for the Maryland Procurement Technical Assistance Center (Maryland PTAC). The US government, the largest purchaser of goods and services in the world, is in the midst of an IT revolution. Much of the government’s data and IT infrastructure is moving to the cloud, creating the opportunity for long-term cost savings, increased interoperability, as well as heightened security. At the same time, the push continues to secure key data held on contractor’s IT systems. While this is a much-needed initiative to protect sensitive data from adversaries, it imposes yet more administrative and compliance burdens on the contracting community.

These changes have had and will continue to have a significant impact on federal contractors. From DoD’s newly-finalized Cybersecurity Maturity Model Certification to heightened cybersecurity requirements in procurements by civilian agencies, contractors must ensure they have the necessary measures in place to continue to be compliant and eligible for federal awards. And understanding the government’s vision for the continuing transition to cloud computing helps contractors of all sizes to develop effective business capture strategies for FY2022 and beyond.

The webinar will cover these and other trends in both cloud computing and cybersecurity, including:

  • Does the CMMC apply to my company?
  • What should I do now to secure my company’s IT systems and ensure compliance with government contract requirements?
  • What is the status of the government’s major cloud computing procurements?
  • How will the move to the cloud impact small businesses?

This webinar will be held on Tuesday, May 11, 2021 from 10:00 a.m. to 11:00 a.m. EDT. For more information and registration, please visit the Maryland PTAC website.

After a successful challenge last year to the award of a service-disabled veteran-owned small business (SDVOSB) set aside task order for technology service desk operations by the U.S. Customs and Border Protection (CBP or the Agency), our government contracts team successfully defended the award of that task order after the re-evaluation to our client, Patriot, LLC. The challenge and subsequent successful defense of the award highlight the usefulness of the protest process, a process some contractors are hesitant to use.

CBP initially awarded the task order, issued under the Chief Information Officer-Solutions and Partners 3 (CIO-SP3) indefinite delivery indefinite quantity (IDIQ) Government-Wide Acquisition Contract (GWAC), to Candor Solutions, LLC in April 2020.  Patriot protested the award to Candor on April 16, 2020, and less than two weeks later the Agency took corrective action.

Candor’s September 2020 Protest

In September 2020, after re-evaluation, CBP awarded the task order to Patriot.  Candor protested, alleging the agency:

  1. Used a facially unreasonable adjectival rating scheme.
  2. Unreasonably deviated from the rating scheme.
  3. Unreasonably evaluated Candor’s proposal.
  4. Did not evaluate Patriot’s proposal in accordance with the solicitation.

Continue Reading Bass, Berry & Sims Successfully Protests—And Then Defends—Client Award of a Task Order Before the GAO

To protect the U.S. industrial base, among other reasons, companies that sell goods to the U.S. government are required to comply with domestic source restrictions that dictate the percentage of domestic content and have the potential to impact design, sourcing, and manufacturing decisions.  In many respects, these restrictions are out of step with the decades-long trend toward globalization of commercial supply chains.

Two recent developments, the implementation of former President Trump’s July 15, 2019, Executive Order 13881, Maximizing Use of American-Made Goods, Products, and Materials, and President Biden’s January 25, 2021, Executive Order 14005, Ensuring the Future is Made in All of America by All of America’s Workers, continue to tighten these restrictions. These requirements have the potential to cause a further divergence between commercial and government production, reversing the push toward commercial contracting and eliminating the associated efficiencies and cost-savings to the U.S. taxpayers.

Overview of the Buy American Act

The Buy American Act (BAA), 41 U.S.C. §§ 8301-8305, provides a price preference for goods sold to the U.S. government that are deemed to be “domestic end products.”  To qualify for that designation, a product has to be both manufactured in the United States and the majority of its components have to be sourced domestically.  For decades prior to the January 2021 final rule, the domestic component, or content, requirement, was set at 50%.  In addition, that domestic content requirement was waived for all commercial-off-the-shelf (COTS) items.

Continue Reading Heightened Buy American Act Requirements Are Here and More Are on the Way

The Court of Federal Claims (COFC) recently affirmed that agencies are required to apply the “Rule of Two” to all federal acquisitions in its decision of Tolliver Grp., Inc. v. United States. Further, agencies must give a reasonable explanation supported by factual evidence when canceling solicitations. The decision ensures that small businesses will continue to have robust access to federal procurement opportunities.

Army Cancels SDVOSB RFPs in Favor of Unrestricted Multiple Award Contract

The two solicitations at issue in this case were for the procurement of training staff for a field artillery school located in Fort Sill, Oklahoma. Both solicitations were set-aside for service-disabled veteran-owned small businesses (SDVOSBs). After the Army awarded the contracts to two SDVOSBs, a third SDVOSB bidder protested the awards, alleging deficiencies in the Army’s evaluation of various factors.

The Army issued Notices of Corrective Action for both contracts, stating that it would cancel both awards, “[r]e-evaluate the requirement and acquisition strategy to ensure that it accurately reflects the Army’s current need,” and either cancel or amend the solicitations. The Army’s internal memorandums indicate that part of the rationale for revisiting the solicitations was because the Army now had a new multiple award indefinite delivery indefinite quantity (MAIDIQ) contract vehicle that encompassed the scope of the two solicitations at issue.

Continue Reading COFC: “Rule of Two” Must Be Analyzed Before “Any” Acquisition

The Interagency Suspension and Debarment Committee (ISDC) recently released its annual report to Congress regarding suspension and debarment across the federal government in FY 2019.  The report serves as a yearly reminder that while selling to the federal government – the largest purchaser of goods and services in the world – may present tremendous opportunities, it is not without risk or obligation.  As Justice Holmes stated in Rock Island, Arkansas & Louisiana R.R. Co. v. United States, 254 U.S. 141, 143 (1920), people “must turn square corners when they deal with the Government.”  Those that don’t may lose access to the federal marketplace altogether, a loss that can prove fatal to companies that are heavily reliant on government contracts or grants.

Overview of ISDC Report

The ISDC report, which is available here, shows that while the total number of actions nearly doubled over the last decade, the number of proposed debarments and debarments continues its steady decline that began in FY 2014.  While this might suggest that agencies are utilizing this administrative tool less frequently, a closer analysis of the report shows that is not the case.

In fact, the number of referrals to suspending and debarring officials (SDOs), as well as the number of suspensions, increased significantly from FY 2018 to FY 2019: referrals were up from 2,441 to 2,806 and suspensions increased from 480 to 722, due in large part to increased activity by the Air Force, the EPA, and the Department of Labor.  This uptick is likely the result of a multi-year effort to educate contracting officials about the importance of referring contractors to SDOs when their conduct indicates either serious poor performance or a lack of business honesty or integrity such that excluding them from the federal marketplace to protect the government from potential harm might be appropriate.

Continue Reading Annual Suspension and Debarment Report Serves as a Reminder to “Turn Square Corners” When Dealing with the Government

On February 1, the U.S. Commerce Department, Bureau of Industry & Security (BIS), announced a settlement (available here) with Princeton University in connection with 37 alleged violations of the Export Administration Regulations (EAR).  The EAR are the main regulations that govern exports of commercial goods, software and technology; BIS has principal responsibility for administering and enforcing the EAR.

The settlement is a valuable reminder of the amount of export-controlled activity that takes place at and involving universities, academic medical centers, and other research institutions.  Penalties for export violations can be significant.  Legal departments, compliance departments, and offices of sponsored research therefore must ensure that faculty – many of whom may be non-U.S. nationals – are aware of their responsibilities under U.S. export law.

Alleged Violations

According to BIS, the violations occurred when Princeton exported strains and recombinants of animal pathogen to non-U.S. research institutions.  These items are controlled for export for chemical and biological reasons, and thus an export license is required to make the exports.  Princeton did not obtain the necessary export licenses.

Continue Reading Princeton Penalized for Alleged Research-Related Export Violations

The U.S. Court of Federal Claims (COFC) decision in HWI Gear, Inc. v. United States highlights the importance of reviewing a solicitation to determine if the text of Federal Acquisition Regulation (FAR) 52.219-28 is included in it, as well as the risk of engaging in corporate transactions while a proposal to a procuring agency is pending. In this case, the COFC held that an offeror was required to recertify its size status during a procurement, and the agency’s failure to enforce this requirement invalidated the award.

In HWI Gear, Mechanix Wear, Inc. (Mechanix) and HWI Gear, Inc. (HWI) submitted proposals in response to a solicitation set aside for small businesses. After proposal submission but before award, Mechanix informed the procuring agency that it had changed its corporate structure from a corporation to a limited liability company and changed its corporate name, but that all other terms and conditions in its proposal remained unchanged. Mechanix, however, did not inform the agency that its change in corporate structure was the result of a merger with a large business and that Mechanix no longer qualified as a small business under the size standard established for the procurement. The agency ultimately selected Mechanix as the awardee, and HWI filed a bid protest challenging the agency’s evaluation.

Continue Reading Size Recertification Prior to Award – When is it Required?

I’m looking forward to participating in a panel session at the 2021 Tennessee Procurement Opportunities Conference presented by the Tennessee Procurement Technical Assistance Center (PTAC) and Tennessee Small Business Development Center. I will join other industry panelists for a discussion focusing on best practices for teaming in government contracting.

The program will also feature:

  • Judy Bradt (Amazon #1 Bestselling Author & Speaker) on how to “Win your meeting and get invited back!”
  • Discussions about contracting opportunities and how to do business with the NASA Marshall Space Flight Center.
  • NASA prime contractors who will discuss upcoming opportunities.
  • Matchmaking opportunities with local, state, and federal agencies and prime contractors.

The conference will be held over a virtual platform on Tuesday, January 26, 2021 from 9:00 a.m. – 3:00 p.m. For more information and registration, please visit the event website. Feel free to email me and let me know that you’ll be attending.

In recent months, the U.S. Department of Justice (DOJ) and Securities & Exchange Commission (SEC) have announced several notable penalties for violations of the U.S. Foreign Corrupt Practices Act (FCPA).  The FCPA prohibits bribery of foreign government officials and requires issuers of securities on U.S. exchanges to keep and maintain accurate books and records and robust internal controls.

We have summarized a few of these enforcement actions below to serve as a reminder of the various ways in which companies can fall afoul of the FCPA.

Goldman Sachs Pays Largest-Ever FCPA Penalty

In October 2020, Goldman Sachs Group Inc. (Goldman Sachs) agreed to a $3.3 billion penalty to resolve allegations that the company and its Malaysian subsidiary violated the FCPA by making payments to a Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB).  This represents the largest-ever FCPA penalty imposed on a company.

The DOJ and SEC alleged that senior employees of Goldman Sachs used a third-party intermediary to bribe high-ranking government officials in Abu Dhabi and Malaysia.  The improper payments were allegedly made by Goldman Sachs to assist with efforts to obtain business from 1MDB.

Continue Reading FCPA Update: Enforcement Continues

Last month, the U.S. Court of Appeals for the Federal Circuit’s (Federal Circuit) opinion in The Boeing Co. v. Secretary of the Air Force shed additional light on the technical data rights of contractors under defense contracts. The decision hinges on the fact that technical data provided by a contractor to the government remains the property of the contractor. Additionally, contractors retain certain rights in connection with technical data even when the government has so-called “unlimited rights” to use it.

Case Background

In this case, Boeing held two contracts with the U.S. Air Force (USAF) for work on the F-15 Eagle Passive/Active Warning Survivability System. The contracts included the requirement for delivery of technical data to the USAF with Unlimited Rights and the DFARS 252.227-7013, non-commercial technical data rights clause (Subsection 7013). The parties did not dispute that Boeing retained ownership of technical data delivered to the USAF under the contracts, but Boeing contended that its legends on the technical data were intended to protect its rights as they pertained to third parties. Namely, putting third parties on notice of the proprietary nature of the data and directing that “Non-US Government Entities May Use and Disclose Only As Permitted In Writing By Boeing Or By The US Government.” The USAF rejected the data deliverables marked in this manner, finding them nonconforming and Boeing requested a final Contracting Officer’s decision on the matter.

The Contracting Officer’s final decision confirmed that the USAF was correct in rejecting the legends and directed Boeing to correct them. Boeing appealed the decision to the Armed Services Board of Contract Appeals (ASBCA) on the ground that Boeing’s legend was “not nonconforming” under Subsection 7013(f) since its legend did not address restrictions on government rights, only third-party rights. The ASBCA, ruling on the motion for summary judgment, disagreed, siding with the USAF’s position that only the legends listed in Subsection 7013(f) are authorized and Boeing’s legend was not one of those. Boeing appealed this decision to the Federal Circuit.

Continue Reading Federal Circuit Confirms DoD Contractor’s Expanded Restrictions on Non-Government Parties Rights in Data