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Sylvia Yi

Sylvia Yi represents businesses across a broad range of sectors as they move through the contracting process with federal, state and local governments, and when they engage in international transactions. Sylvia counsels public and private companies on day to day compliance challenges and has a particular focus on mergers & acquisitions involving government contractors. She is a regular contributor to the firm’s GovCon & Trade Blog, where she provides insight on the demanding and ever-changing regulatory environment.

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This UPDATED post summarizes the situation as of late evening on Thursday, February 24, concerning current U.S. sanctions and export restrictions related to Russia and Ukraine. This supplements our post of late evening on Wednesday, February 23, which is available here.

As of late evening on Thursday, February 24, OFAC has taken the following additional actions, as follows:

Multiple additional banks were designated as SDNs.  Most prominently, OFAC designated VTB Bank Public Joint Stock Company (VTB Bank), which is reportedly Russia’s second-largest bank, along with 20 VTB Bank subsidiaries.  (Recall that any entity owned 50% or more by one or more SDN is itself an SDN, even if not specifically identified as an SDN.  In the case of a large entity such as VTB Bank, this means there may be many other entities affiliated with VTB Bank that are SDNs even though not identified on the SDN List).Continue Reading Russia, Ukraine: Update as of the Evening of February 24

While most federal procurements are conducted using the onerous regulations set forth in the Federal Acquisition Regulation (FAR) and agency supplements, agencies are increasingly relying on the more flexible, but lesser-known, Other Transaction Agreements (OTAs) to meet developmental requirements.  Congress has authorized only a limited number of agencies to use this authority, which was first included in NASA’s enabling legislation to ensure NASA had the flexibility to meets its unique needs.  The authority is further limited to use by “non-traditional” government contractors. It is generally restricted to prototype/development work, although agencies are authorized to enter into follow-on production contracts with OTA prototype participants.

Despite these limitations, the ability to customize intellectual property terms, among others, has led to a significant increase in the use of OTAs over the past decade.  In FY20 alone, the federal government entered into OTAs worth over $16 billion, including approximately $9 billion on COVID-19-related purchases.

But before a company pursues an OTA opportunity, it is essential to understand that ability to challenge OTA awards is limited.  In addition, jurisdictional questions have created considerable uncertainty for aggrieved contractors who wish to file a protest in connection with these agreements.  Although pre-and post-award protests challenging FAR-based procurements can only be heard at the Government Accountability Office (GAO) or the Court of Federal Claims (COFC), recent decisions indicate that jurisdiction to hear OTA challenges at both is extremely limited.  And in the past year, U.S. district courts have held that they too have limited jurisdiction that hinges on whether the issue involves a procurement contract—either current or future.Continue Reading The Black Hole of Protest Jurisdiction: Can I Challenge the Award of an “Other Transaction Agreement”?

On August 3, 2021, the U.S. State Department Directorate of Defense Trade Controls (DDTC) issued an order laying out charges and imposing a monetary penalty of $6.6 million on Keysight Technologies, a U.S. technology and software company, for 24 alleged violations of the International Traffic in Arms Regulations (ITAR).  The ITAR are the primary U.S. regulations that control exports of defense articles, services, and technology, including software.

Keysight and DDTC settled the matter through a Consent Agreement that also requires Keysight to take specific compliance measures, including maintaining a designated compliance officer, for a period of three years.

We want to highlight three particular elements of this matter.Continue Reading Export Enforcement Update: The Importance of Commodity Classification

The FAR Council recently published its proposed rule to implement a part of President Biden’s January 28, 2021 Executive Order No. 14005 (EO 14005), which dictated certain revisions to the Buy American Act (BAA) regulations. As discussed in our previous blog post, Section 8 of EO 14005 directed the FAR Council to consider the following:

  • Replacing the “component test” at FAR Part 25.
  • Increasing the threshold for domestic content.
  • Increasing price preferences for domestic end products.

The proposed rule addresses Section 8 of EO 14005 by proposing to do the following:

  • Increase the domestic content threshold instead of replacing the domestic content test (at least for the time being), with scheduled increases.
  • Permit a limited period during which U.S.-made end products meeting the current domestic content threshold (greater than 55%) will be considered “domestic end products” under certain circumstances.
  • Establish a list of critical products and critical components subject to additional price preferences and post-award reporting requirements.

Continue Reading Buy American Baby Steps: FAR Council Publishes Proposed Rule Implementing Part of President Biden’s Executive Order

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

Since August 13, 2019, the government has been prohibited from procuring equipment or services using “covered telecommunications equipment or services” as a substantial or essential component of any system according to the implementation of Section 889(a)(1)(A) of the National Defense Authorization Act for Fiscal Year 2019 (FY19 NDAA).

Beginning on August 13, 2020, according to the implementation of Section 889(a)(1)(B), the government is prohibited from contracting with an entity that uses any equipment or services using “covered telecommunications equipment or services” as a substantial or essential component of any system or as critical technology as part of any system. This applies regardless of whether the use of the prohibited equipment or services is in the performance of work under a government contract.Continue Reading Section 889 Prohibitions Expanded from Procurement to “Use”

  • Virtually all transactions with government prohibited
  • Most transactions with private sector parties still permitted
  • Practical challenges make Venezuela transactions difficult, including for non-U.S. parties

On August 5, 2019, President Trump issued Executive Order 13,884 (EO 13,884), which significantly expands existing U.S. sanctions on Venezuela.

Pursuant to EO 13,884, virtually all transactions with the government of Venezuela are now prohibited.  There are some important exceptions to that prohibition, and those are discussed below.

While this is not an absolute embargo on Venezuela, it is quite close.  And even when a transaction with Venezuela may be lawfully permitted, the practical challenges and the risk of conducting the transaction may make it nearly impossible to complete successfully.Continue Reading Venezuela Update: Significant Sanctions Restrictions Imposed

On February 15, 2019, the Government Accountability Office (GAO) issued a consequential decision for those contractors who will compete for federal contracts as part of a mentor-protégé joint venture.  In Ekagra Partners, LLC, B-408685.18, Feb. 15, 2019, the GAO partially sustained the protest on the basis of an improper limitation on the submission of teaming agreement member past performance, and partially denied the protest finding that agencies can limit the number of past performance experience projects that can be submitted in a mentor-protégé joint venture’s proposal in reliance on a large business mentor firm.

In Ekagra, the protestor challenged the terms of the request for proposals (RFP) seeking to award additional Multiple Award Task Order Contracts (MATOCs) under the General Services Administration’s (GSA) One Acquisition Solution for Integrated Services (OASIS) Small Business (SB) Pool 1.  OASIS SB Pool 1 MATOC covers a wide variety of professional services including, but not limited to, consulting, logistics, engineering, scientific, management consulting, project management, and other professional services.Continue Reading GAO Decision Limits Consideration of Mentor’s Past Performance in a Mentor-Protégé Joint Venture

  • Mandatory declarations of certain transactions now required
  • Certain changes to pre-existing regulations also announced and effective immediately
  • Mandatory declaration requirement may not ease burden on parties filing with CFIUS

On October 11, the U.S. Treasury Department took the first steps to implement the significant changes introduced under the Foreign Industrial Review and Risk Modernization Act (FIRRMA). FIRRMA broadens the mandate of the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in the United States that could impact U.S. national security.

Most notably, the Treasury Department is establishing a pilot program that imposes new obligations on foreign parties making investments, even non-controlling investments, in U.S. businesses involved in 27 explicitly designated industries. The pilot program defines such investments as “pilot program investments.”Continue Reading CFIUS Pilot Program Creates New Obligations and Challenges

Conditioned Agreements to Negotiate (CAN)

When acquiring or selling small businesses, government contractors need to be cognizant of the Small Business Administration’s (SBA) “present effect rule.” Under this rule, SBA will find that certain letters of intent (LOI) or other agreements to merge have a “present effect” on the buyer’s ability to control the small business seller. Numerous decisions by the SBA’s Office of Hearings and Appeals (OHA) have discussed the acceptable parameters of LOIs.

In a recent decision, OHA further refined the elements considered in the determination of whether an LOI amounts to an “agreement in principle.”
Continue Reading You “CAN” Avoid Affiliation in Negotiating an Acquisition

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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