I recently authored an article for Law360 discussing a May 2022 ruling in the U.S. Court of Federal Claims (COFC) and how it has curtailed federal agencies’ authority to cancel government contract solicitations.
The Bass, Berry & Sims international trade team is actively monitoring the situation in Russia and Ukraine and providing real-time advice to clients on managing the situation. This post summarizes new U.S. sanctions and export restrictions as of Tuesday, August 9. This post supplements our previous summaries, which are available by following the links at the end of this blog post.
Treasury Targets Broad Range of Entities in Recent Round of Sanctions
On August 2, acting pursuant to Executive Order 14024, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions designating members of the Russian elite, a multinational corporation, and sanctions evaders.
The Anti-Assignment Act, referring to both the Assignment of Contracts Act and Assignment of Claims Act, which prohibits the assignment of government contracts and claims, respectively, has had a fairly uneven applicatory history. On June 27, the U.S. Civilian Board of Contract Appeals (CBCA) did its best to clarify the legislation’s “operation of law” exception as it relates to contractor mergers and acquisitions. The CBCA sided with the government contractor, agreeing that following a merger, the surviving entity was entitled to perform on the former entity’s contract, by “operation of law,” regardless of the alleged misrepresentation, in ATS Trans LLC dba Around the Sound/TransPro v. Department of Veterans Affairs. Continue Reading CBCA Opinion Provides Clarity on Anti-Assignment Act’s Murky “Operation of Law” Exception
On August 9, President Biden plans to sign the CHIPS and Science Act into law in the White House Rose Garden. The bill provides $52.7 billion in subsidies and incentives to domestic semiconductor manufacturers to strengthen existing supply chains and better compete with China. While details of the bill have been debated as the legislation has gone through multiple rounds of revisions and edits, elected officials have remained focused on the goal of enacting a bill that ensures funding to promote domestic rather than non-U.S. business. To realize those ambitions, the legislative authors took a page from the Committee on Foreign Investment in the United States’ (CIFUS) playbook, producing a quasi-outbound investment screening mechanism that could bring big changes.
On July 6, the SBA issued a proposed rule that would implement Section 862 of the National Defense Authorization Act for Fiscal Year 2021 establishing a government-wide certification process for Veteran Owned Small Businesses (VOSBs) and Service Disabled Veteran Owned Small Businesses (SDVOSBs).
On July 8, the United States Court of Appeals for the District of Columbia upheld a lower court’s ruling dismissing a complaint from Federal Express Corporation (FedEx) and holding it liable for violating the Export Control Reform Act of 2018 (ECRA) even though the common carrier had been completely unaware of its violation. On appeal, FedEx unsuccessfully argued the Department of Commerce’s strict liability interpretation of 15 C.F.R. § 764.2(b) is ultra vires – a clear overstep of statutory authority.
In a recent article for Reuters, I warned of the potential consequences if government contractors fail to comply with their disclosure obligations. I outlined the types of proceedings government contractors with federal contracts and grants with a total value greater than $10 million must report on the Federal Awardee Performance Integrity and Information System (FAPISS) in accordance with FAR 52.209-7, which include:
- Criminal proceeding resulting in a conviction or other acknowledgment of fault.
- Civil proceeding resulting in a finding of fault with a monetary fine, penalty, reimbursement, restitution, and/or damages greater than $5,000, or other acknowledgment of fault.
- Administrative proceeding resulting in a finding of fault with either a monetary fine or penalty greater than $5,000 or reimbursement, restitution, or damages greater than $100,000, or other acknowledgment of fault.
The Bass, Berry & Sims international trade team is actively monitoring the situation in Russia and Ukraine and providing real-time advice to clients on managing the situation. This post summarizes new U.S. sanctions and export restrictions as of Thursday, July 7. This post supplements our previous summaries, which are available by following the links at the end of this blog post.
Commerce Department Continues to Target Airlines, Entities; OFAC Extends Sanctions to New Parties, Imports of Gold
On June 24, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) issued Temporary Denial Orders (TDOs) against an additional three Russian airlines: Nordwind Airlines, Pobeda Airlines, and S7 Airlines. BIS cited apparent ongoing violations of the comprehensive export controls imposed on Russia. Under these TDOs, the airlines are banned from participating in transactions subject to the Export Administration Regulations (EAR), including exports from the United States and re-exports from abroad. The TDOs initially run for 180 days but will likely be extended.
As a general matter, an agency should reject a bid out of hand if it is deemed defective due to problems with bidder responsiveness. However, flawed bids determined on account of issues with bidder responsibility can be supplemented with the requested information any time before award. On May 18, the GAO wrangled with that critical difference in operative language, finding in favor of a bidder who successfully demonstrated the requested information dealt with a question of responsibility, rather than one of responsiveness, in J.E. McAmis, Inc., B-420518; B-420518.2.
On June 6, the U.S. Small Business Administration (SBA) issued a final rule modifying its methodology for calculating the size of small businesses using an employee-based size standard and authorizes businesses participating in its Business Loan, Disaster Loan, Surety Bond, and Small Business Investment Company (SBIC) programs to choose whether to use a three-year or five-year receipts average when determining eligibility. The final rule becomes effective on July 6, 2022.