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Todd Overman

Todd Overman is the chair of the firm’s Government Contracts practice and Managing Partner of the Washington, D.C. office.  He has over twenty years of experience advising companies on the unique aspects of doing business with the federal government. Over the last decade, he has advised on more than 50 transactions involving the purchase or sale of a government contractor.

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On April 6, 2015, the Sixth Circuit delivered a costly blow to the United States government to the tune of $657 million when it issued its opinion in United States v. United Technologies Corporation and remanded the case back to the district court to review the damages award, yet again.

This was the second time that the Sixth Circuit heard arguments deriving from the United States False Claims Act case against Pratt & Whitney (“Pratt”), now owned by United Technologies, for false statements the company made when competing against GE Aircraft for contracts to build F-15 and F-16 jet engines. In 1983, in an attempt to outbid GE Aircraft and make it hard for the government to issue a split-award contract, Pratt misstated its projected costs and certified that the company’s bid included its “best estimates and/or actual costs.” After uncovering Pratt’s overstated costs projections, the government filed both an administrative action against the company in the Armed Services Board of Contract Appeals (“ASBCA”) under the Truth in Negotiations Act and a lawsuit in district court alleging violations of the False Claims Act.Continue Reading United Technologies is Saved from $657 million False Claims Act Verdict by the Sixth Circuit

We are all familiar with the “revolving door” between the public and private sector – government employees will often leave their posts and cross over to the private sector to capitalize on their experience in the government. However, when government employees make that transition, it is imperative that they consider the federal conflict of interest laws, which may prohibit them from taking certain private sector positions and, at minimum, require them to be screened from particular types of work on a go forward basis. Failure to consider these laws could lead to severe consequences. A recent plea agreement highlights the importance of remaining mindful of these rules when negotiating post-government employment.

On Tuesday, March 11, 2015, former U.S. Air Force Captain Adam J. J. Pudenz pleaded guilty in Iowa federal court to violating restrictions on post-government employment and making a false statement to law enforcement agents. In 2010, Pudenz served as a U.S. military contracting officer in Afghanistan and worked on several U.S. government contracts related to the purchase of clothing and boots from an Afghan trading company. Pudenz admitted that before leaving his position as a contracting officer in Afghanistan, he negotiated future employment with the same Afghan company. Pudenz ultimately began working for the trading company and lobbied the U.S. government on matters related to the contracts he had previously managed.Continue Reading Recent Plea Deal Highlights Importance of Post-Government Employment Conflicts of Interest

According to GSA, the lack of transparency in prices paid on government contracts has led to significant price variations of up to 300% or more of purchases made by federal agencies and unnecessary duplication of contract vehicles.  In an attempt to address this concern, the General Services Administration (GSA) has issued a proposed rule (RIN-3090-AJ51) to increase visibility on prices paid by government buyers through the implementation of a transactional data reporting clause added to GSAR 552.216.

The proposed rule would require vendors to report prices paid for products and services during the performance of the contract including under orders and blanket purchase agreements.  The report would include 11 transactional data elements such as unit measures, quantity of item sold, prices paid per unit, and total price.  Contractors would submit these reports electronically through a “user-friendly, online reporting system.”  The rule would apply to orders placed against Federal Supply Schedule (FSS) contracts and other GWAC and IDIQ contracts administered by GSA.  The reporting requirement, however, would not apply to the U.S. Department of Veteran Affairs FSS contracts for pharmaceuticals, medical equipment, etc.  The rule, once finalized, would go into effect immediately for GWACs and IDIQ contracts but conducted in phases for FSS contracts.Continue Reading GSA’s New Vision for FSS Contractors: No More Basis of Award Customer Monitoring in Exchange for Transactional Data

Given the substantial benefits small businesses enrolled in the 8(a) Business Development Program receive, the Small Business Administration (SBA) has strict eligibility standards. To qualify for admission into the Program, a small business must be “unconditionally owned and controlled by one or more socially and economically disadvantaged individuals…” 13 C.F.R §124.10. While disadvantaged entities can have business relationships with non-disadvantaged entities they must be wary of not crossing the line from independence to dependence. When a relationship between a disadvantaged and non-disadvantaged entity becomes so close that independent business judgment by the disadvantaged entity is compromised, it can result in the disadvantaged entity’s termination from the 8(a) program.   A recent case decided by the SBA serves as a friendly reminder of this important limitation.
Continue Reading Reminder from SBA: Don’t Cross the Line and Become “Unduly Reliant”

We recently authored an article on False Claims Act (FCA) enforcement actions brought against pharmaceutical and medical device manufacturers during the past year. In the article, we analyzed the recent settlements for Ansun Biopharma, Inc. (formerly known as NexBio, Inc.); Smith & Nephew, Inc.; McKesson Corporation; and Stryker Corporation and Alliant Enterprises.

The article, “…

The Small Business Administration (SBA) issued a final rule limiting liability from fraud penalties for firms and individuals who misrepresent their small business size status if they acted in good faith reliance upon a small business status advisory opinion (“Advisory Opinion”) issued by Small Business Development Centers (SBDCs) or Procurement Technical Assistance Centers (PTACs). While not perfect, the final rule provides a process for businesses to receive some guidance from SBA prior to making size representations in connection with award of federal procurements.

First, the rule establishes certain criteria that Advisory Opinions must meet. For instance, an Advisory Opinion must contain a written analysis explaining the reasoning underlying the determination that a concern meets or exceeds size standards and must contain a copy of an SBA Form 355. Additionally, Advisory Opinions must take into account the principles of affiliation. Furthermore, copies of evidence documenting compliance with size standards must be provided by the business and attached to the Advisory Opinion. Following public comments on the proposed rule, the SBA included in the final rule specific types of evidence a firm may provide including payroll records, time sheets and federal income tax returns.Continue Reading SBA Finalizes Safe Harbor Rule for Small Business Size Representations

When a contractor intends to subcontract 70% or more of the total cost of the work to be performed on a certain contract or order this is considered a pass-through contract.  Concerns that contractors are being overpaid for no, or negligible, added value for work performed by lower-tier subcontractors is one of the biggest issues in pass-through contracts.  Section 802 of the NDAA for FY 2013 mandated the Department of Defense (DOD), the Department of State (State) and the United States Agency for International Development (USAID) to issue guidance and regulations to ensure contracting officers take additional steps prior to awarding pass-through contracts.  Specifically, contracting officers must consider alternative contracting arrangements and make a written determination that the contracting approach selected is in the best interest of the government prior to awarding pass-through contracts.  GAO recently conducted an audit on these three agencies to evaluate progress of the implementation of these requirements.

In its report, GAO found that the three agencies’ review and justification of pass-through contracts is incomplete.  While USAID and State have taken some action to implement Section 802, DOD has yet to take any action.  Moreover, none of the agencies were found to have provided guidance to assist contracting officers in performing these additional tasks.  Thus, contracting officers have been left with little to no direction on how to perform the required analysis of alternate acquisition approaches or determine the feasibility of contracting directly with the proposed subcontractors.  Furthermore, contracting officers have not been advised as to what type of documentation is necessary or where to record their determinations.

Continue Reading GAO Finds that Agencies Have Failed to Provide Oversight Guidance for Pass-through Contracts

On February 5, 2015, the U.S. Small Business Administration (SBA) issued a Proposed Rule that would establish a government-wide mentor-protégé program (“Proposed Rule”). Currently, the 8(a) Business Development Program is the only SBA program with a mentor-protégé program, but the Proposed Rule would result in the expansion of the mentor-protégé program to all small business contractors. The Proposed Rule would amend SBA’s regulations to implement provisions of the Small Business Jobs Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013 (NDAA). In addition to expanding the mentor-protégé program across all small businesses, the Proposed Rule would make changes to the current 8(a) mentor-protégé program, clarify the meaning of a joint venture, and implement new compliance requirements to approved joint ventures.
Continue Reading SBA Proposes New Mentor-Protégé Program to Expand Teaming Opportunities for Large and Small Businesses

I am participating on a panel discussion in the upcoming American Bar Association webinar, “Key Issues in Government Contractor Mergers and Acquisitions.” The webinar will be Thursday, February 12 from 1:00 – 2:30 p.m. EST.

Listeners will learn best practices for conducting business transactions when government contractors are involved. The panel will address the following…

U.S. ex rel American Systems Consulting Inc. v. ManTech Advanced Systems International, No. 14-3269 (6th Cir.)

The Sixth Circuit recently affirmed the dismissal of a False Claims Act (FCA) suit against ManTech Advanced Systems International (ManTech). At issue was whether a change in ManTech’s key personnel in a contract was a material false statement. By way of background, ManTech and American Systems Consulting Inc. (ASCI) were in competition for a Defense Information Technology Contracting Organization contract for inventory management support. Each offeror was required to submit a specific individual as the prospective Program Manager and address his skills and qualifications. Both ManTech and ASCI identified a prospective Program Manager but ASCI failed to address his specific skills and qualifications. ManTech received a higher score based on the experience of their proposed Program Manager and was ultimately awarded the contract. However, after initial proposals were submitted, the specific individual ManTech proposed resigned and ManTech did not advise the government nor did they modify their proposal. Subsequently, ASCI filed an FCA action against ManTech, alleging ManTech fraudulently induced the government into awarding it the contract by misrepresenting the person who would act as Program Manager.Continue Reading Change in Personnel Not Material False Statement Under False Claims Act

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From the Bass, Berry & Sims Blog Network

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