Please join us on November 2 for an engaging webinar, Demystifying Controlled Unclassified Information Requirements: Overview of the Regulatory Landscape and Strategies for Implementing a Successful Compliance Program, alongside Stacy High-Brinkley from BDO. Together, we will illuminate the dynamic landscape of federal Controlled Unclassified Information (CUI) requirements.Continue Reading Register Now | Demystifying Controlled Unclassified Information Requirements Webinar
All government contractors routinely review and negotiate subcontractor agreements. Whether you are the prime or the subcontractor, these agreements are critical for delivering solutions to government customers and capturing federal compliance requirements.
Please join our panel of Bass, Berry & Sims Government Contracts experts – Richard Arnholt, Todd Overman, and Sylvia Yi – along with our in-house colleague, Chad Pryor, Chief Counsel, Public Sector at TTEC, to discuss the art of negotiating subcontractor agreements and best practices for ensuring a successful relationship for both parties.
The webinar will take place on Monday, March 6, 2023, from 1:00 p.m. – 2:00 p.m. ET. Click here to register.Continue Reading Register Now | Subcontract Negotiation Strategy and Best Practices Webinar
As President Biden prepared to jet off to the United Nations COP27 Climate Summit in Egypt, his administration announced a proposed rule that would dramatically enhance government contractors’ compliance obligations related to climate change.
Continue Reading U.S. Government Brings Its Buying Power to the Fight Against Climate Change
A 2016 Government Accountability Office (GAO) report noted that the Office of Federal Contract Compliance Programs (OFCCP) did not have an official method of validating contractors’ affirmative action plans or programs (AAP) compliance. GAO recommended that OFCCP progress from an “honors” or self-representation system to a mechanism that regularly monitors AAP compliance. In September 2020, OFCCP published a notice seeking comment on the possibility of an annual AAP certification and verification process.
On December 2, 2021, the U.S. Department of Labor (DOL) announced that federal service and supply contractors and subcontractors presently required to create and maintain written AAPs will also be required to certify whether they meet annual AAP requirements. Certification will be through a secure online Contractor Portal developed and monitored by OFCCP. Contractors can also upload their AAPs to the portal during a compliance evaluation. Certifying compliance in the Contractor Portal does not exempt a contractor or subcontractor from compliance evaluations. Contractors and subcontractors that are only construction and not supply and service contractors are not required to certify AAP compliance.Continue Reading OFCCP’s New Affirmative Action Program Oversight Tool
On October 12, the U.S. Commerce Department, Bureau of Industry and Security (BIS) announced that it imposed a civil penalty fine against VTA Telecom Corporation (VTA) for the unauthorized export of controlled commodities to Vietnam. Additionally, BIS is requiring VTA to improve its export control compliance efforts and retain a Director of Trade Compliance. Alternatively, VTA can dissolve or cease operations.
VTA, located in Milpitas, California, was established in 2013 as a subsidiary of a Vietnamese state-owned telecommunications company. BIS is the primary U.S. government agency responsible for administering and enforcing export controls on commercial items that could support weapons proliferation and other threats to U.S. national security.
According to BIS, VTA procured and exported items from the United States to its parent company in Vietnam with knowledge that certain of those exports were intended to support a Vietnamese defense program. To settle the matter, VTA agreed to the following:
- A penalty of $1,869,372.
- Expenditure of $25,000 to fund its internal export compliance program (ICP).
- Hiring and retention of a Director of Trade Compliance to oversee VTA’s export activities for at least two years.
Well, that was quick. In four memos dated September 30 and October 1, contractors learned the terms of the contract provisions implementing the COVID-19 vaccine and masking requirements mandated by President Biden’s Executive Order (EO) 14042, discussed here, and the implementing guidance issued by the Safer Federal Workforce Task Force (Task Force) on September 24. In the next 10 days we expect to see most other agencies issue deviation memos similar to the General Services Administration (GSA) and Department of Defense (DoD) memos discussed below.
As discussed in this post, while the contract provisions, along with updated guidance from the Task Force, answer some of the open questions, contractors are still in the unfortunate position of rushing to ensure they are compliant with these requirements when the contract provisions apply to them without knowing the answers to some fundamental questions. Despite these open questions, companies have little time, for example, to ensure that covered employees are vaccinated by the December 8, 2021 deadline. After that deadline, any contractor that becomes subject to these requirements will have to ensure that on new contracts or options/extensions that incorporate the new clause, covered employees are fully vaccinated by the first day of performance, which of course is impossible unless contractors enforce these vaccine mandates in advance. That said, the memos do seem to clarify that compliance with the Task Force guidance will not be required for prime contracts solely for the manufacturing of products.
The FAR Clause
On September 30, the Federal Acquisition Regulation (FAR) Council issued a memo providing agencies with “initial direction” requiring the implementation of the Task Force guidance. It includes FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors (OCT 2021) (Deviation), along with directions that agencies “expeditiously” issue class deviations to ensure that contracting officers can begin using the clause on or before October 15, 2021.Continue Reading And … They’re Off! Contractors Race to Comply Now that the COVID-19 Vaccination Deviations Have Arrived
I recently outlined the ever-growing list of compliance obligations for businesses that sell goods and services to the federal government in an article for Risk Management. “Some of the new regulatory requirements – such as obligations relating to cybersecurity and counterfeit parts – address challenges posed by an increasingly global, networked economy,” I explained in the article. “Others, such as the mandatory disclosure requirement, continue the trend of the government relying on third parties, whether it be whistleblowers or contractors themselves, to police the procurement system.”
To address the rising risk these complications pose, businesses should first ensure they have established an underlying compliance structure required by federal procurement regulations, as well as design effective training programs, translate the obligations into actionable policies, and effectively monitor adherence with those policies.Continue Reading Compliance Obligations for Government Contractors
We are excited for this year’s complimentary CLE program, which will provide the same caliber of practical advice, insight into government developments, and thoughtful discussion from industry panelists you have come to expect from this seminar. This year’s topics include:
- Inside Scoop: Top Issues In-House Counsel Currently Face
- Update on International Trade Regulations and Enforcement
- SEC Update: Key Enforcement and Regulatory Priorities
- Running an Investigation
- Antitrust Is Back: DOJ and FTC Signal Significant Increase in Antitrust Enforcement
- Data Privacy Update
- Healthcare Fraud Enforcement Updates
- Hot Topics in Procurement Fraud in 2021 and Beyond
- COVID-19 Funding Fallout: Preparation for Government Scrutiny
This year’s seminar will be held from 8:30 a.m.–3:45 p.m. CDT on Tuesday, September 28. To register, please click here.
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.
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