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

UPDATE: On November 4, Tennessee, Kentucky and Ohio filed a complaint in the Eastern District of Kentucky challenging the federal contractor mandate.  The complaint is very similar to the ones filed by other states as described in the blog post below.

At the end of October 2021, four complaints were filed by almost 20 states challenging the government contractor vaccine mandate. While some have suggested that these states, led by Republican governors, filed the suits for political reasons, it would be a mistake to discount them.  The complaints raise very significant procedural and substantive questions about the legality of the government contractor vaccine mandate.

The Complaints

On October 28, the State of Florida filed suit in the Middle District of Florida (the Florida Complaint).  The following day, ten more states – Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming – filed a complaint in the Eastern District of Missouri (the Missouri Complaint); a further seven states – Alabama, Georgia, Idaho, Kansas, South Carolina, Utah, and West Virginia – filed suit in the Southern District of Georgia (the Georgia Complaint); Texas filed a complaint in the Southern District of Texas (the Texas Complaint).

While there are multiple differences between the complaints, there is a high likelihood that the states have established standing to challenge the government contractor mandate as they all have agencies or other entities that are party to federal contracts and contract-like instruments.  In addition, each complaint seeks declaratory and injunctive relief but as of November 3 it appears that only Florida has filed a motion for a preliminary injunction. We expect the others to be filed soon. Also, they all make facially compelling procedural and substantive arguments that Executive Order 14042, the OMB Guidance, and the government contract provisions are unlawful.Continue Reading States Have Joined the Fight to Challenge the Government Contractor Vaccine Mandate

The Safer Federal Workforce Task Force (Task Force) recently issued additional Q&A’s that seemingly take a softer approach to compliance with the contractor vaccine mandate, indicating contracting officers are to “work with,” rather than punish contractors, in an effort to address challenges such as employees refusing to get vaccinated.  Other answers in the Q&A further expand the mandate’s coverage to affiliates in ways that, while well-intentioned, may increase growing opposition to the already incredibly broad diktat.

For those reasons, unless and until the mandate is reversed by the administration or stopped by a federal court, which, as we will discuss in another post, now seems to be a real possibility, contractors subject to the contract provision should continue working toward getting “covered contractor employees” vaccinated by December 8 and processing requests for medical and religious accommodations.  But it does suggest that the administration belatedly realizes that the vaccine mandate could cause very significant supply chain disruptions if strictly enforced.

The New Q&As

In the new Q&A’s issued on November 1, the Task Force clarifies several points that provide welcome flexibility for contractors.  They also confirm that contractors working in good faith toward compliance may not be subject to punishment for failing to get 100% of their workforce vaccinated.  But in other Q&As, the Task Force continues its incredibly broad implementation of the mandate.Continue Reading Is the Contractor COVID-19 Vaccine Mandate Softening?

The U.S. government continues to vigorously enforce U.S. export laws against both U.S. and non-U.S. companies. In addition to monetary penalties, companies charged with violating U.S. export laws may be subject to strict compliance obligations. In extreme cases, the U.S. government may even suspend a company’s export privileges.

In this webinar, we will discuss recent…

As contractors and agencies scramble to comply with the government contractor vaccine mandate, which is currently on hold due a nationwide injunction issued on December 7, 2021, there seems to be growing confusion over whether contractors or federal agencies are responsible for evaluating whether contractor employees working at government sites are entitled to medical or religious accommodations. In some cases, agencies tell contractors that the government, not the contractor, is responsible for adjudicating accommodation requests.  In others, agencies are demanding to see the justification for accommodation determinations and independently evaluate those determinations.

This confusion is unfortunate because it is clear that the contractor, not the government, is responsible as the employer. To the extent agencies are usurping contractors’ obligation to make these determinations, the government is increasing the likelihood it will be viewed as a joint employer, needlessly exposing both the government and contractors to potential liability.

Employers are Responsible for Making Accommodation Determinations

For decades, employees have had the right to request medical accommodations under the Americans with Disabilities Act (ADA) and religious accommodations under Title VII of the Civil Rights Act of 1964. Those requests have always been submitted to their “employer,” even when those employees work at an off-site location.Continue Reading Who is Responsible for Granting Medical/Religious Accommodations to the COVID-19 Vaccination Mandate?

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:

  1. A penalty of $1,869,372.
  2. Expenditure of $25,000 to fund its internal export compliance program (ICP).
  3. Hiring and retention of a Director of Trade Compliance to oversee VTA’s export activities for at least two years.

Continue Reading BIS Imposes Civil Fine and Compels Hiring of Compliance Official or Cease Operations

On September 28, the U.S. Commerce Department, Bureau of Industry and Security (BIS) announced that it has imposed a civil penalty fine and denial of export privileges against Vorago Technologies (Vorago) for the unauthorized export of controlled commodities to Russia.

Vorago is a U.S. manufacturer of integrated circuits for use in environments with high radiation levels and extreme temperatures.  The company’s products are particularly well suited for use in space.  BIS is the primary U.S. government agency that administers and enforces U.S. export controls on commercial items, including particularly strict licensing requirements on items that can be used with weapons of mass destruction or conventional weapons.

According to BIS, Vorago engaged in a conspiracy with a Russian company, Cosmos Complect (Cosmos), to circumvent U.S. export controls.  To settle the matter, Vorago agreed to the following:

  1. A penalty of $497,000, and
  2. Denial of export privileges until September 2023.

The denial of export privileges, and roughly half of the penalty, will be suspended as long as Vorago complies with the terms of the settlement.Continue Reading U.S. Technology Company Pays for Unauthorized Exports to Russia

On September 9, President Biden issued Executive Order 14042 requiring that federal contractors comply with forthcoming COVID-19 workplace safety guidance. That guidance, which was issued on September 24, is remarkably broad, requiring that employees working directly on government contracts, in connection with government contracts, or in the same facility as an employee in the first…

While most federal procurements are conducted using the onerous regulations set forth in the Federal Acquisition Regulation (FAR) and agency supplements, agencies are increasingly relying on the more flexible, but lesser-known, Other Transaction Agreements (OTAs) to meet developmental requirements.  Congress has authorized only a limited number of agencies to use this authority, which was first included in NASA’s enabling legislation to ensure NASA had the flexibility to meets its unique needs.  The authority is further limited to use by “non-traditional” government contractors. It is generally restricted to prototype/development work, although agencies are authorized to enter into follow-on production contracts with OTA prototype participants.

Despite these limitations, the ability to customize intellectual property terms, among others, has led to a significant increase in the use of OTAs over the past decade.  In FY20 alone, the federal government entered into OTAs worth over $16 billion, including approximately $9 billion on COVID-19-related purchases.

But before a company pursues an OTA opportunity, it is essential to understand that ability to challenge OTA awards is limited.  In addition, jurisdictional questions have created considerable uncertainty for aggrieved contractors who wish to file a protest in connection with these agreements.  Although pre-and post-award protests challenging FAR-based procurements can only be heard at the Government Accountability Office (GAO) or the Court of Federal Claims (COFC), recent decisions indicate that jurisdiction to hear OTA challenges at both is extremely limited.  And in the past year, U.S. district courts have held that they too have limited jurisdiction that hinges on whether the issue involves a procurement contract—either current or future.Continue Reading The Black Hole of Protest Jurisdiction: Can I Challenge the Award of an “Other Transaction Agreement”?

I recently authored an article for Law360 offering an inside look at two U.S. Department of Commerce committees responsible for interpreting how national security and foreign policy should be applied to transactions involving the export, re-export and transfer of U.S. technology. I served on both committees – the Export Administration Operating Committee (OC) and the Advisory Committee on Export Policy (ACEP); I was chair of the OC and executive secretary of the ACEP until joining Bass, Berry & Sims. The article lends important insight to the closed-door processes each body uses and provides clarity on how national security decisions are reached.

While the chair of the OC has decision-making authority (with certain exceptions where decisions are made by interagency vote), the ACEP is the body that reviews cases where a government agency does not agree with the OC chair’s decision. “The decisions of these bodies are where the rubber meets the road in export control implementation,” I explained in the article. “Export control is a key feature in determining whether the U.S. will continue to maintain its technological supremacy, or China or another country will catch up or surpass the U.S.”

In addition to a neutral chair of the OC, who also serves as executive secretary of the ACEP by law, and the politically appointed ACEP chair, representatives from the Department of Commerce, Defense, Energy and State sit on the OC and ACEP. At the OC level, the chair makes a decision based on recommendations from the four agencies (again, with certain exceptions). At the ACEP, decisions are based on a majority vote and where the vote is a tie, the decision reverts to the OC Chair’s decision. The goal of the balanced interagency structure at the OC level is to prevent a single agency from dominating the process. The ACEP’s process aims to resolve situations where the regulatory standards and policy are not clear and have led to disagreements among agencies at the OC, including giving policy guidance for OC members to apply in similar situations going forward.Continue Reading Key Department of Commerce Entities Related to National Security Decision-Making Processes

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

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