As developments related to COVID-19 continue to unfold, Bass, Berry & Sims attorneys are monitoring the situation and providing guidance through a series of video chats entitled, “COVID-19 Compliance Conversations.”

In this episode, Thad McBride is joined by Ed Bond, the Director of IBM’s Export Regulation Office, to discuss issues that exporters need to address as they navigate the COVID-19 pandemic. Watch the video to hear Thad and Ed’s observations about the novel issues exporters are encountering and recommendations for maintaining compliance.

View our other video in this series:

COVID-19 Compliance Conversations – Episode V

COVID-19 Compliance Conversations – Episode IV

COVID-19 Compliance Conversations – Episode II

COVID-19 Compliance Conversations – Episode I

I recently discussed various COVID-19-related contracting policies that will impact federal contractors during the pandemic. The article in Law360 examined the following four policies: CARES Act Section 3160, contractual change clauses, accelerated progress payments, and the Paycheck Protection Program (PPP).

In the article I explained that Section 3160 of the CARES Act is “a recognition that we need to keep liquidity flowing into the government contracts space, and we need to have them ready when that work gets switched back on, we need people to be able to resume activity immediately in order to get our economy back on the right track. Many of these contractors are providing mission-critical support to the government.”

However, I added that “Section 3610 is a great safety valve where there isn’t [alternatives] available on a contract. [But] if there’s a possibility for a negotiated arrangement that contracting officer can enter into using his or her existing authorities, and they’ve got the money, why are you relying on 3610? It seems unnecessary and overly complicated.”

Related to the impact of the PPP, I explained, “The PPP program is hugely important. There’s a lot of negative press right now about some larger publicly-traded companies that got money, but I think the important thing to remember is that 1.66 million companies received money under that program. Out of that, 1.6 million companies received less than $1 million, and the average loan was around $250,000.”

The full article, “4 Ways Contractors Can Get Federal Relief During COVID-19,” was published by Law360 on April 24 and is available online.

We recently wrote an article in Bloomberg Law discussing the impact mergers, acquisitions, spin-offs, and restructuring transactions can have on pending bids for government contracts. The article overviews recent bid protest decisions and provides practical guidance on diligence, deal timing and communications with government customers regarding transactions.

The effect of transactions on pending government contract bids is largely governed by the Anti-Assignment Act, which generally prohibits the transfer of a government contract to another party without a government waiver or post-closing novation. “However, transfers ‘incident to the sale of an entire business or sale of an entire portion of a business,’ i.e., transfers occurring ‘by operation of law’ are excepted from the statute,” we clarified in the article.

When evaluating whether a transaction will materially affect a bidder’s ability to perform the contract, we recommend that parties to the transaction consider the following:

Continue Reading How Transactions Involving Government Contractors Can Impact Pending Bids

On April 8, the Department of Defense (DoD) issued a Class Deviation 2020-O0013 laying out the framework for implementing Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). DoD is to be commended for swift action to implement this useful permissive authority, which is but one of the many tools available to contracting officers to ensure affected contractors with contracts or agreements under Other Transaction Authority are fairly compensated and are prepared, to the maximum extent possible, to continue to support DoD’s mission.

The legislative provision, which we commented on when it first appeared in the Senate version of the bill, raised questions that the class deviation and subsequent implementation guidance and FAQs helpfully address.  Hopefully, DoD’s guidance will be helpful to agencies across the government that are eager to use the authority at Section 3610 but have been delayed due to uncertainty caused by unclear legislative language.

For example, the legislation authorizes agencies to reimburse at the “minimum applicable contract billing rates,” a term that is not defined, but only if the employees cannot perform work at a site that has been “approved by the Federal Government” without guidance on what such approval entails.  Further, Section 3610 provides that the maximum reimbursement authorized shall be reduced “by the amount of credit a contractor is allowed pursuant to division G of Public Law 116-127,” which is a reference to the Families First Coronavirus Response Act (FFCRA) payroll tax credits for paid sick and family/medical leave, and “any applicable credits a contractor is allowed under this Act,” which is not defined.

Continue Reading DoD Issues Framework to Provide Relief to Government Contractors Affected by COVID-19-Related Closures

As developments related to COVID-19 continue to unfold, Bass, Berry & Sims attorneys are monitoring the situation and providing guidance through a series of video chats entitled, “COVID-19 Compliance Conversations.”

In this episode, Thad McBride and Lindsey Fetzer provide a brief overview of compliance considerations related to international donations and charitable contributions. Watch the video to hear their take on challenges related to legal and safety requirements, among others, as well as advice on steps you can take to help mitigate risk during this time of uncertainty.

View our other video in this series:

COVID-19 Compliance Conversations – Episode II

COVID-19 Compliance Conversations – Episode III

COVID-19 Compliance Conversations – Episode IV

COVID-19 Compliance Conversations – Episode V

As developments related to COVID-19 continue to unfold, it’s imperative to prioritize the rapidly evolving state and federal level regulations and act accordingly to ensure your business is complying, but also accessing available federal and state assistance. In an effort to help navigate the unique challenges government contractors face during this time, our attorneys will discuss recent developments and preview risks associated with what has essentially become war-time contracting.

In this webinar, Bass, Berry & Sims’ Government Contracts and Labor & Employment attorneys will be joined by Isaac Natter, Associate General Counsel (Acquisition & Logistics) at the Department of Defense (DoD) to discuss these timely developments and offer practical guidance on key topics of interest, including:

  • A DoD insider’s view on the new Section 3610 “Ready State” CARES Act Authority
  • Latest on SBA’s Paycheck Protection Program
  • Overview of FFCRA benefits and qualifying reasons
  • Contractual issues such as excusable delays, stop-work order and terminations
  • Government use of the Defense Production Act in response to
    COVID-19

WEBINAR DETAILS

Title: Fighting the Virus: Update on COVID-19 Issues Impacting Government Contractors

Date: Thursday, April 16, 2020 Time: 1:00 p.m. – 2:00 p.m. EDT

Who Should Attend

  • Executives
  • Private equity professionals
  • Management professionals
  • General counsel
  • Other in-house legal and compliance personnel of government contractors, financial institutions and manufacturers

On March 27, President Trump signed into law the $2 trillion coronavirus stimulus bill, named the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  The law, the most expensive single piece of legislation ever passed, includes hundreds of billions in funds to help businesses remain afloat.  To provide oversight into how these funds are used, the CARES Act establishes a Special Inspector General for Pandemic Recovery (SIGPR), along with two other oversight bodies.

This action is not without precedent, as Congress established a similar watchdog to oversee the stimulus funds disbursed in the wake of the 2008 financial crisis, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).  SIGTARP’s broad interpretation of its mandate, as well as its aggressive pursuit of fraud involving stimulus funds, are instructive to forecasting how SIGPR will fulfill its mission and to how recipients of CARES Act funds can protect themselves.

SIGPR Duties & Powers

The CARES Act tasks the SIGPR with monitoring fraud, waste and abuse involving the $500 billion of CARES Act funds allocated to the Treasury Secretary (Economic Stabilization Fund) to support businesses, states and municipalities impacted by the COVID-19 pandemic.

The SIGPR, who will be appointed by the president and requires Senate confirmation, will be empowered to “conduct, supervise, and coordinate audits and investigations of the making, purchase, management, and sale of loans, loan guarantees, and other investments” relating to the Economic Stabilization Fund.

Continue Reading The Special Inspector General for Pandemic Recovery – Crisis Funding Comes with Heightened Investigation Risk

Bass, Berry & Sims attorneys Richard Arnholt and Todd Overman will present a training webinar titled, “COVID-19 Update – What Every Government Contractor Needs To Know” for the Maryland Procurement Technical Assistance Center (Maryland PTAC). The interactive seminar will provide insight into the flurry of government contracting activity relating to the COVID-19 pandemic and government reaction, as well as the statutory, regulatory, and administrative actions the government is attempting to decrease the impact of this national emergency on government contractors.

Among other topics, the webinar will cover:

  • Claims and excusable delays – is the pandemic a force majeure event?
  • New legislation and regulatory actions – small business grants/loans, authority for agencies to pay contractors to be on standby, and increased DoD progress payments.
  • Emergency contracting authorities – can the government really do that?
  • Book keeping during a crisis – will you be prepared for investigations and inquiries when the crisis is over?

This webinar will be held on Thursday, April 2, 2020 from 10:00 a.m. to 11:00 a.m. EDT. For more information and registration, please visit the Maryland PTAC website.

On March 18, President Trump issued an Executive Order invoking the Defense Production Act (DPA), a tool that may help the administration combat the COVID-19 pandemic. With companies like 3M, GE, and others voluntarily ramping production of medical supplies to accomplish the nation’s significant needs, the president is yet to unleash his recently invoked authority. Still, the Executive Order activates far-reaching executive powers to prioritize production of key medical supplies, including protective medical equipment and ventilators. With the apparatus needed to deploy the DPA now in place, government contractors should prepare themselves for what may come.

By way of background, Congress passed the DPA during the Korean War to ensure sufficient production of materials deemed critical to the nation’s defense. Echoing economic controls imposed in World War II, the DPA gives the executive branch extraordinary powers, including the authority to require manufacturers to produce and prioritize certain items; allocate raw materials and facilities for the production of these items; and, in certain circumstances, even set price and wage controls.

Continue Reading Administration Ready to Use DPA to Address COVID-19 Shortages

Last night the Senate passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, (CARES Act), by a vote of 96 to 0.  This rescue package will now be considered by the House, which, according to the latest reports, will likely vote on the legislation this Friday.

The bill, which is 883 pages long, will provide immediate assistance to American workers and companies impacted by the COVID-19 pandemic.  For the 3.28 million Americans who filed initial unemployment claims last week, this is welcome, and much-needed legislative action that includes extended unemployment benefits, direct cash payments, small business loans, among other emergency assistance.

Like any complex legislation that is passed so quickly, it will take time to fully digest the implications of all of the provisions, many of which have not been debated or widely discussed.  Among them is a section that has received little notice to date that, if included in the bill when it is signed into law by the president, gives agencies the authority to provide relief to government contractors by authorizing them to pay contractors for paid leave, including sick leave, to maintain employees in a ready state during the shutdown.

Continue Reading Possible Federal Contractor Reimbursement for Keeping Employees in a “Ready State” During the COVID-19 Shutdown