On September 9, 2015, U.S. Department of Justice (DOJ or the Department), Deputy Attorney General Sally Yates issued a memorandum to all U.S. Attorneys regarding individual accountability for corporate wrongdoing (Yates Memo).

The point of the Yates Memo is clear: while DOJ will continue to pursue companies for corporate wrongdoing, the Department will also simultaneously pursue charges against individual employees. According to the Yates Memo, “[b]ecause a corporation only acts through individuals, investigating the conduct of individuals is the most efficient and effective way to determine the facts and extent of any corporate misconduct.”

And the ultimate target of these efforts? Corporate executives. The DOJ understands that lower-level employees facing individual civil or criminal liability are likely to cooperate against their superiors, thereby facilitating DOJ’s ability to obtain information necessary to prosecute individuals further up the corporate ladder.

Continue Reading DOJ Targets Corporate Executives

Bass, Berry & Sims attorneys Thad McBride and Cheryl Palmeri authored “International trade and commercial transactions in the United States: overview,” a Q&A guide to the regulation of international trade and commercial transactions in the United States. The guide includes information related to the following categories:

  1. Recent trends
  2. Contracts for the sale of goods
  3. Storage of goods
  4. Imports
  5. Trade remedies
  6. Exports
  7. International trade restrictions
  8. The Regulatory authorities

The article is part of the Global Guide to International Trade and Commercial Transactions, which was published by Thomson Reuters Practical Law Global Guides and is available online.

On August 26, 2015, the Department of Defense (“DoD”) issued an interim rule, effective immediately, that revises network security requirements applicable to DoD contractors and introduces new cloud computing provision that reflect current DoD policy. The interim rule, which implements sections of the FY13 and FY15 National Defense Authorization Acts, comes on the heels of the massive breach of Office of Personnel Management systems that compromised the personal data of more than 21 million federal employees. The new and revised requirements apply to cyber incidents on unclassified information systems – breaches of classified systems will continue to be reported in accordance with the National Industrial Security Program Operating Manual. The interim rule also implements DoD policies and procedures applicable to the procurement of contracting for cloud computing services.

The rule includes five contract clauses relevant to contractors and subcontractors providing cloud computing to DoD or who are handling controlled unclassified DoD information on their systems. All five apply to commercial item contracts.

Continue Reading DoD Contractors Beware – New Network Penetration Reporting and Cloud Services Requirements Are Here

On August 18, the Bank of New York Mellon Corporation (BNY Mellon) agreed to pay $14.8 million to settle allegations that it had violated the U.S. Foreign Corrupt Practices Act (FCPA) by providing internships to family members of foreign officials affiliated with a Middle Eastern sovereign wealth fund the bank sought to manage.

According to the settlement order, which is available here, BNY Mellon provided the internships at the request of the foreign officials, even though the prospective interns failed to meet the bank’s hiring criteria and were less than exemplary employees. In so doing, the bank violated the FCPA’s anti-bribery provisions and demonstrated that it lacked internal controls sufficient to ensure its hiring process would not be used to improperly obtain or retain business.

This settlement highlights two essential FCPA-compliance points.

Continue Reading When Intern Season Gets Hot: the Perils of Improper Hiring Under the FCPA

Let’s get the ball rolling here with a clichéd look at procurement fraud. Most government contractors firmly believe that as long as they knuckle down and keep their nose to the grindstone, they will earn their stripes and eventually make a King’s ransom in the contracting game. Occasionally though, a contractor may try to cut corners and will push the envelope and go against the grain in order to get a leg up on the competition.

While in the short term that may lead to the contractor making money hand over fist, all that glitters is not gold and eventually the long arm of the law will catch up to the scheme and make a federal case out of it. At that point, the contractor will certainly find themselves in hot water. Typically, the federal government will likely hold all the cards, and have the contractor over a barrel.

But even contractors that try to go by the book may find themselves with their feet to the fire due to actions of an employee. A chain is only as strong as its weakest link, and one bad egg employee can really be a fly in the ointment for an otherwise law-abiding government contractor.

Continue Reading Procurement Potholes: Don’t Get Caught by a Cliché

Since our update in April of this year, the U.S. government has continued to aggressively modify and enforce its various sanctions programs. And this trend shows no signs of slowing in the months to come.

As in the first quarter of 2015, the last three months were marked by a combination of broad policy changes, individual designations and removals, and various enforcement actions. While recent developments did not include the overhaul of any sanctions program akin to the Cuba amendments in January, they did set the stage for significant changes in the future.

Here, we consider notable U.S. sanctions developments in the past quarter, and offer our thoughts on what is to come.

Continue Reading Keeping Up the Pace: U.S. Sanctions Post a Busy Second Quarter

Next month I’ll be headed back to Tennessee for a few days and making a couple of stops! I’m excited to be teaming up with UT PTAC for its Advanced Training Executive Series. The training will be centered around the topics of teaming agreements and joint ventures, and feature a dynamic group of panelists. The first stop will be in Oak Ridge on August 12 at the Oak Ridge Chamber of Commerce and then onto Nashville on August 19 at the Tennessee Bankers Association. If you are in the area, it would be great if you could join me!

To register for the Advanced Training Executive Series:
Oak Ridge Event Registration | Nashville Event Registration

The Government Contracts team recently represented Ed Medical, Inc., a Tennessee-based full service home medical supply provider, in a successful bid protest at the U.S. Government Accountability Office (GAO). For the past 11 years, Ed Medical has been providing home oxygen services for the Veterans Administration (VA). Ed Medical’s VA contract covers Region 9 of the Veterans Integrated Services Network (VISN 9) which includes Tennessee and Kentucky, as well as portions of Mississippi and West Virginia. Last year, the VA released a solicitation for follow-on work in VISN 9, for which Ed Medical submitted a competitive proposal.

In March 2015, the VA announced an award under the solicitation to another contractor, revealing the award price of approximately $18 million. Given Ed Medical’s vast experience providing home oxygen services in the region, it was immediately clear the price of the award was far too low for the work required. Thus, we filed a bid protest at GAO challenging the VA’s award decision based on the award price.

In the protest, we argued that the Solicitation required the VA to evaluate each offeror’s proposed price to determine whether it was realistic, i.e., whether the offeror could actually perform the work for the proposed price. The record demonstrated that the VA failed to conduct the price realism analysis, and awarded the contract without considering the risk inherent with such an unrealistically low price. GAO agreed with our argument and sustained the protest on those grounds. The VA was instructed to take corrective action and reevaluate the offeror’s price proposals for realism, and potentially make a new source selection decision.

To read the decision, click here.

Yesterday I presented an hour-long webinar discussing how to prepare for and navigate the “Fair Pay and Safe Workplaces” proposed rule and accompanying guidance.

On May 28, 2015, the Obama Administration published the much anticipated proposed DOL guidance and accompanying Federal Acquisition Regulation (FAR) proposed rule implementing EO 13673, Fair Pay and Safe Workplaces (July 31, 2014). In the webinar we highlighted key elements of both publications and their impact on government contractors, including:

  • The new “labor law violation” disclosure requirements and resulting contracting officer responsibility determinations
  • Unique role of “Labor Compliance Advisors”
  • Paycheck transparency and independent contractor notice requirements
  • Limitation on companywide arbitration plans

The FAR Council is extending the comment period for the proposed rule from July 27, 2015, to August 11, 2015.

Feel free to listen to the webinar below or download the slides.

https://www.youtube.com/watch?v=UYplJCj37-U

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

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