I recently co-authored an article for WorldECR with Scott Jones, a nonresident fellow at The Stimson Center, examining the history and current trajectory of the Entity List, part of the Export Administration Regulations (EAR) administered by the U.S. Bureau of Industry and Security (BIS) to help protect U.S. national security. In the article, we outline the history of the Entity List and discuss the need for a just and transparent removal mechanism.

We state that “since the 2008 change in scope to include national security and foreign policy concerns, the number of parties added to the Entity List has increased dramatically” from its original purpose of preventing the proliferation of weapons of mass destruction.  With the recent technology conflicts between the United States and China, we argue the Entity List has become the most convenient tool in the toolbox to further U.S. national security and foreign policy goals.

Continue Reading History and Trajectory of the Entity List Related to National Security Concerns

On November 10, the U.S. Departments of State, Treasury, and Commerce issued an unusual joint advisory (the “advisory”) on the risk of investing and interacting with certain Cambodian individuals and entities. The advisory is evidence of the United States’ active campaign against corruption; the advisory also continues the recent U.S. practice of employing sanctions and other trade restrictions to fight corruption.

Specific Cambodian Sectors Designated as High Risk

In the advisory, the government identified the following Cambodian sectors as high risk:

  1. The financial, real estate, casino, and infrastructure sectors – deemed high risk because of illicit finance activities and related risks.
  2. The manufacturing and timber sectors of Cambodia – deemed high risk because of trafficking of persons, wildlife, narcotics, and related risks.

The advisory emphasizes that involvement, or potential involvement, of U.S. companies in any of those sectors could result in reputational, economic, and/or legal risk.

Continue Reading U.S. Imposes Restrictions, Issues Warning on Business with Cambodia

On December 6, we noted on this blog post that because the injunction issued by the District Court for the Eastern District of Kentucky on November 30 prohibiting the government from enforcing the government contractor vaccine mandate against contractors and subcontractors in Kentucky, Ohio, and Tennessee had national impact, a nationwide injunction seemed to make sense.

Today, the District Court for the Southern District of Georgia, which held a hearing on a motion for a preliminary injunction on December 3, did just that.

The President Likely Exceeded Statutory Authority

The order granted the motion for a preliminary injunction filed by the plaintiffs – Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia – finding that they “will likely succeed in their claim that the President exceeded the authorization given to him by Congress through the Federal Property and Administrative Services Act (FPASA) when issuing Executive Order [EO] 14042.”

Continue Reading Georgia District Court Enjoins Government Contractor Vaccine Mandate Nationwide

As we previously reported, on November 30, the District Court for the Eastern District of Kentucky (ED of KY) enjoined the government “from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in Kentucky, Ohio, and Tennessee.” This follows nationwide injunctions of both the OSHA vaccine and testing Emergency Temporary Standard applicable to employers with 100 or more employees and the CMS interim final rule mandating vaccinations applicable to Medicare- and Medicaid-certified providers and suppliers.

As expected, on December 3, the Department of Justice (DOJ) asked the ED of KY for an immediate stay of the injunction and filed a notice of appeal to the Sixth Circuit. The plaintiffs have asked for three business days to respond, and it is unclear when the ED of KY will act on DOJ’s request. But the ED of KY case may be overtaken by other events, as preliminary injunction hearings in additional challenges to the government contractor vaccine mandate occurred on December 3 in two cases and are expected to happen on December 6 and 7 in two others.

Limited or Nationwide Injunction?

In the past few years, several commentators have questioned the conditions, if any, under which district courts may issue nationwide injunctions. While this is a very complex issue that brings into question the rights of the parties in a particular case, those in favor of limiting injunctions to the plaintiffs in the case generally favor having multiple district courts consider an issue so that the legal arguments are better developed before consideration by the appellate courts. Those in favor of nationwide injunctions believe that consistency is favorable, any district court is authorized to enjoin any executive branch action that it determines to be unlawful, and the government’s ability to appeal an injunction provides sufficient protection against improperly issued injunctions.

Continue Reading DOJ Seeks Stay of KY, OH, and TN Injunction; Hearings Go Forward in Other Government Contractor Vaccine Mandate Cases

The $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) that President Biden signed on November 15, expands the provisions supporting American manufacturing through federal procurement. The IIJA statutory directives impose novel domestic origin requirements and standards for construction materials and products acquired for federally-aided public works infrastructure projects at state and local levels.

Overview

Prior efforts to protect and promote the U.S. industrial base consisted of 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. Find more information about these two executive orders on our blog post titled “Heightened Buy American Act Requirements Are Here and More Are on the Way.”

President Biden’s EO 14005 was reinforced by the statutory authorities detailed in the domestic preference provisions of the IIJA. The three key concepts of the IIJA are:

Continue Reading Advancing the “Made-in-America” Movement

In a decision issued on November 17, JKB Solutions v. United States, the Federal Circuit held that the commercial item termination for convenience provision at FAR 52.212-4(l) incorporated by reference into a contract for commercial services did not apply because that provision “governs the termination of commercial item contracts for the government’s convenience, and it does not apply to service contracts ….” (emphasis added).

If taken to its logical conclusion, this remarkable decision would mean that no commercial “item” provision in the Federal Acquisition Regulation (FAR) applies to services even if incorporated in the contract, effectively overturning a decades-long understanding that the commercial item definition encompasses both goods and services. In one fell swoop, the Federal Circuit effectively eliminated the entire category of commercial services.

Background

JKB had entered into a three-year ID/IQ contract with the Army for instructor services, under which the Army issued three yearlong task orders.  The price of each task order included 14 classes, but each year the Army used JKB for fewer than 14 classes, using Army personnel to teach the balance of the classes, paying JKB only for the classes it actually taught.

As a result, JKB sued for breach of contract.  The Court of Federal Claims (COFC) held that the Army had constructively terminated the contract for convenience pursuant to FAR 52.212-4, which was incorporated by reference, and that the termination for convenience had not been in bad faith or an abuse of discretion because the contract was never actually terminated for convenience.  In so holding, the court concluded that JKB could only recover its termination for convenience costs, which it had not sought in its complaint. JKB appealed.

Continue Reading Did the Federal Circuit Just Eliminate Commercial Services?

On November 30, the District Court for the Eastern District of Kentucky enjoined the government contractor vaccine mandate issued in accordance with President Biden’s Executive Order 14042. This injunction follows an injunction issued on November 29 of the CMS vaccine mandate and the earlier injunction of the OSHA Emergency Temporary Standard by the Fifth Circuit.

The opinion, which is available here, holds that the litigants – which included Kentucky, Tennessee, and Ohio – have a substantial likelihood of succeeding on the argument that the vaccine mandate exceeds the president’s statutory authority under the Federal Property and Administrative Services Act and the Competition in Contracting Act. The court also found that the administration likely violated the non-delegation doctrine by exercising statutory authority “it does not have,” and that the mandate improperly intrudes on health and safety matters reserved to the states under the 10th Amendment.

While the scope of the injunction is limited to Kentucky, Tennessee, and Ohio, it is possible the other district courts considering challenges to the government contractor mandate will reach the same conclusion. In addition, there will almost certainly be an immediate appeal.

If you have any questions about the government contractor vaccine mandate, please contact Richard Arnholt at rarnholt@bassberry.com or 202-827-2971.

Likely in response to the flurry of litigation challenging the government contractor vaccine mandate, on November 16 the Office of Management and Budget (OMB) published a new notice of determination and request for comments in the Federal Register. The new determination, which rescinds and supersedes the prior notice issued on September 24, 2021, and published in the Federal Register on September 28, 2021, provides additional support for the revised Safer Federal Workforce Task Force (Task Force) Guidance issued on November 10, 2021.

Task Force Guidance Published for the First Time

The revised notice, which asks that comments be submitted on or before December 16, 2021, is divided into three parts.  Part I published in the Federal Register for the first time the entire Task Force Guidance. While it is positive that the Guidance has finally been published, it is incomplete in one major respect. Specifically, although the November 10 version published in the Federal Register includes links to the regularly-updated frequently asked questions (FAQs), OMB fails to mention that the FAQs and the Guidance are subject to revision or that the contract provisions implementing these requirements mandate that contractors comply with the Guidance as it appears now and “as amended during the performance” of the contract.

OMB Expands its Economic Analysis

Part II of the notice, titled “Economy-and-Efficiency Analysis,” provides a post hoc justification for the measures initially taken over six weeks ago.  While some of OMB’s arguments and observations may have merit, the analysis leaves many open questions.

Continue Reading OMB Attempts to Plug Holes in the Government Contractor Vaccine Mandate

In an opinion first publicly released on November 3, the Court of Federal Claims (COFC) took the somewhat usual, but not unheard of, step of sanctioning the government for mishandling the administrative record (AR) in a bid protest. Contractors can take heart that COFC will hold the government accountable when it fails to produce the entire AR.  The decision also provides a useful reminder of one of the advantages of filing a protest at COFC rather than the Government Accountability Office (GAO).

Background

As we recently wrote about on this blog, on August 2, Judge Solomson sustained a protest filed by Oak Grove Technologies that argued the putative awardee had improperly benefited from unmitigated unequal access to information and biased ground rules organizational conflicts of interests. The decision noted that the government had failed to include in the AR a Defense Contract Management Agency (DCMA) report indicating an offeror was ineligible and a letter terminating the chair of the Source Selection Evaluation Board that suggested the chair had failed to evaluate the offerors’ proposals fairly.

The decision admonished the government for its “sentient choices regarding the contents of the administrative record, all of which appear to have favored the Agency,” noting that “[s]uch apparent gamesmanship wastes judicial resources and undermines trust in both the procurement and disputes process.”

Continue Reading Records in Bid Protest Become More Complete – COFC Sanctions the Government for AR Omissions

As expected, late on November 10 the Safer Federal Workforce Task Force revised its government contractor vaccine mandate Guidance to extend the deadline for covered contractor employees to get vaccinated. This revision follows the White House announcement on November 4 that the deadline for implementation of the federal government contractor mandate would be synchronized with the CMS rule and the currently-stayed OSHA Emergency Temporary Standard, requiring that employees under all three regimes receive their last vaccine dose by January 4, 2022. Instead of using the date by which employees had to received their last vaccine dose, January 4, the Guidance has been revised to now say that covered contractor employees must be fully vaccinated by January 18, 2022 rather than the original December 8, 2021. As a reminder, fully vaccinated means an individual must have received the last vaccine dose two weeks prior.

In addition, the Q&A that previously appeared at the end of the September 24 Guidance has been removed and replaced with two references to the Task Force’s website:

Frequently Asked Questions

Frequently Asked Questions regarding this Guidance can be found here: https://www.saferfederalworkforce.gov/faq/contractors/

All Task Force Guidance, FAQs, and additional information for Federal contractors and subcontractors can be found here: https://www.saferfederalworkforce.gov/contractors

It is not clear whether any other changes were made to the Guidance because the changes were not made in redline.

Continue Reading More Revisions to the Government Contractor Vaccine Mandate

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

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