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

The five cases challenging the contractor vaccine mandate filed in various district courts by 22 states, which we discussed on this blog last week, continue to develop. Motions for preliminary injunctions have now been filed in all cases except the suit filed by Texas, and briefing schedules/hearings are set or in process.

Status of Challenges

Here is a quick rundown of the status of the suits:

  • Florida (Middle District of Florida) – Motion for a Preliminary Injunction was filed on November 2. On November 8, the court set a briefing schedule. Oral argument is scheduled for December 7 at 9:00 a.m. Eastern in Tampa Courtroom 15 A.
  • Texas (Southern District of Texas) – Initial pretrial and scheduling conference set for February. 23, 2022, at 9:00 a.m. Central. As of November 10, no motion for a preliminary injunction has been filed.
  • Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, Wyoming (Eastern District of Missouri) – Motion for Preliminary Injunction was filed on November 4. On November 9, the states filed a Motion to Expedite Preliminary Injunction Briefing.
  • Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, West Virginia (Southern District of Georgia) – Motion for Preliminary Injunction was filed on November 5. Emergency motion to expedite the hearing schedule was filed on November 8, and a telephonic hearing on that motion is scheduled for 4:00 p.m. Eastern on November 10.
  • Tennessee, Kentucky, Ohio (Eastern District of Kentucky) – Motion for a Temporary Restraining Order and Preliminary Injunction was filed on November 8. A status conference was held on November 9 to set a briefing and hearing schedule.

Continue Reading The State Challenges to the Contractor Vaccine Mandate Continue

There is a new weapon in the Department of Justice’s (DOJ’s) already powerful False Claims Act (FCA) arsenal.  In October 2021, the DOJ announced a new Civil Cyber-Fraud Initiative, under which it will pursue FCA liability against government contractors in the cybersecurity space.  According to the announcement from Deputy Attorney General Lisa O. Monaco, the initiative seeks to “hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”

Overview of the Civil Cyber-Fraud Initiative

The Civil Cyber-Fraud Initiative follows several significant cyberattacks, which are only becoming more prevalent. The new initiative is the first formal step DOJ has taken in combatting them by focusing on the preventative cybersecurity efforts of government contractors.

The implications for government contractors and service providers cannot be overstated.  In the healthcare space, entities are already subject to a complex web of cybersecurity requirements under HIPAA.  But, the Civil Cyber-Fraud Initiative brings a new enforcement dimension to all contractors, with the specter of treble damages and staggering statutory penalties under the FCA.

Under the Civil Cyber-Fraud Initiative, DOJ is likely to initiate more FCA lawsuits against government contractors that it believes are failing to meet their cybersecurity obligations under applicable law or contracts.  Moreover, the initiative will likely encourage whistleblowers to be more aggressive in bringing qui tam suits under the FCA when they believe their employers are not honoring their cybersecurity obligations.  Indeed, one whistleblower practice group has already put out a call to arms.

DOJ’s commitment to enforcement in this space was recently confirmed in the address of Brian Boynton, the Acting Assistant Attorney General for DOJ’s Civil Division, at the Cybersecurity and Infrastructure Security Agency (CISA) 4th Annual National Cybersecurity Summit.  Boynton noted that the FCA enforcement could apply to at least the following three “common cybersecurity failures:”

  1. Knowing failures to meet cybersecurity standards.
  2. Knowing misrepresentations of security controls and practices.
  3. Failing to timely report suspected breaches, which he described as critical for government agencies to respond, remediate any vulnerabilities, and limit the resulting harm.

Read more on Inside the FCA

In welcome news for government contractors, the government contractor vaccine mandate continues to soften.  In a statement issued by the White House this morning, the deadline for complying with the mandate will be extended from December 8, 2021, to January 4, 2022, to align with the deadline of the OSHA emergency temporary standard that was issued November 4.  Our Labor & Employment group will be publishing information about the OSHA ETS on their HR Law Talk blog later today.

The statement also makes another important change to the deadline for compliance with the government contractor vaccine mandate.  Previously, covered contractor employees were required to be “fully vaccinated” by the December 8 deadline, meaning that they received the final vaccine dose at least two weeks prior.  The White House has eliminated that two week period, now requiring that covered contractor employees receive their last vaccine dose by the revised January 4 deadline, effectively giving contractors an additional two weeks.

The deadline extension, which has yet to be incorporated in the Safer Federal Workforce Task Force Guidance, is a great development for contractors subject to the mandate and working diligently to get their employees vaccinated.

If you have any questions about the COVID-19 contractor mandate, please contact Richard Arnholt at rarnholt@bassberry.com or 202-827-2971.

Organizational conflicts of interest (OCI) are troubling for both the government and contractors. Under FAR 2.101, an OCI is a situation where “a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.” In an OCI investigation, a contracting officer (CO) should assess OCI risk during the pre-award and post-award procurement processes.

Recent Court of Federal Claims (COFC) Cases

On August 2, 2021, Judge Solomson issued his decision in Oak Grove Technologies, LLC v. United States. The unsuccessful offeror, Oak Grove Technologies (OGT), filed a bid protest challenging the United States’ award to the successful offeror, F3EA. In the complaint, OGT questioned the agency’s award decision and raised numerous challenges regarding the evaluation process. OGT also provided evidence that F3EA had allegedly improperly benefited from unequal access to information and biased ground rules. Essentially, OGT argued that an OCI tarnished the award. During a hearing, the court questioned the integrity of the procurement and recognized that OGT was not treated with the fairness required under the Federal Acquisition Regulation (FAR).  The court ultimately granted OGT’s motion and the agency was prevented from proceeding with the award to F3EA.

Continue Reading Not Quite Good Enough: COFC Finds Agencies OCI Investigations Fall Short

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

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