On December 1, 2022, the Department of Defense, General Services Administration, and NASA published a final rule addressing “Effective Communication Between Government and Industry,” which is aimed at “encourag[ing] communication between Government acquisition personnel and industry.”

The rule adds a paragraph to FAR 1.102-2 that reads as follows:

The Government must not hesitate to communicate with industry as early as possible in the acquisition cycle to help the Government determine the capabilities available in the marketplace.  Government acquisition personnel are permitted and encouraged to engage in responsible and constructive exchanges with industry (e.g., see 10.002 and 15.201), so long as those exchanges are consistent with existing laws and regulations, and do not promote an unfair competitive advantage to particular firms.

There were 19 comments on the proposed rule, which raised a range of issues, including potential changes to the FAR beyond Part 1; a desire for the rule to “require” (rather than “encourage”) communication between Government and industry; and concerns about “Rigid Regulatory Structure Inhibit[ing] Communication.”

The proposed rule also had invited public feedback on ways to enhance communication between the Government and industry, including “whether it may be beneficial to encourage or require contracting officers to conduct discussions with offerors after establishing the competitive range for contracts of a high dollar threshold.”  A number of respondents expressed support for encouraging or requiring discussions, while one respondent expressed concern that requiring discussions for all contracts “may unnecessarily slow the acquisition process.”

The final rule implements a section of the National Defense Authorization Act for Fiscal Year 2016, and has an effective date of December 30, 2022.

On November 4, 2022, the U.S. Department of Transportation (“DOT”) published two proposed waiver notices with request for comments related to the Bipartisan Infrastructure Law’s Build America, Buy America Act (“BABA”).  Both notices stated that DOT’s existing temporary waiver for construction materials would not be extended past its expiration on November 10, 2022.  One notice proposes a public interest waiver for certain narrow categories of contracts and solicitations to continue transitioning the construction materials standard.  The other notice proposes a public interest waiver for de minimis costs, small grants, and minor components.  Comments are due November 20, 2022 for both notices.

Continue Reading Department of Transportation Issues Two Proposed Waiver Notices for Build America, Buy America

On Tuesday, GAO released its Bid Protest Annual Report to Congress for Fiscal Year 2022, which provides bid protest statistics and other interesting information regarding GAO’s protest system.

  • The number of protest filings dropped by 12% from FY21.  After a 12% drop in FY21, protest filings went down another 12% in FY22, with the lowest number of cases filed since FY08.  
  • The sustain rate dipped from 15% to 13%.  The sustain rate considers only the subset of cases that go all the way to a decision on the merits, and measures the percentage of those decisions that sustained the protest.  In FY22, GAO issued 455 merit decisions, and 59 of those were sustained, resulting in a sustain rate of 13% — solidly within GAO’s historical range of sustain rates.  The three most prevalent reasons for sustaining protests in FY22 were (1) unreasonable technical evaluation; (2) flawed selection decision; and (3) flawed solicitation. 
  • The effectiveness rate was a high 51%.  A significant number of protests filed at GAO do not result in a decision on the merits because agencies voluntarily decide to take corrective action before a decision on the merits is reached.  As a result, the more indicative statistic for favorable outcomes in a bid protest is the “effectiveness rate,” which measures the percentage of all protests filed in which the protester obtains “some form of relief from the agency . . . either as a result of voluntary agency corrective action or [GAO] sustaining the protest.”

    The 51% effectiveness rate for FY22 is the highest ever recorded by GAO, matching the all-time high of 51% in FY20 and greater than the FY21 effectiveness rate of 48%.  That means that in slightly more than half of all protests in FY22, the protester obtained some form of relief, confirming that protests can be worthwhile for disappointed offerors who have legitimate concerns about a procurement.
  • The number of hearings dropped to .27%.  Hearings are increasingly rare especially as compared to a decade ago, when 8-10% of fully-developed cases resulted in a hearing.  GAO conducted hearings in only 2 cases in FY22.

GAO’s annual bid protest report continues to provide useful information regarding GAO’s protest system.

President Biden recently signed bipartisan legislation reinforcing anti-human trafficking prohibitions. The End Human Trafficking in Government Contracts Act of 2022 builds on the existing anti-human trafficking framework at Federal Acquisition Regulation (“FAR”) § 52.222-50 (Combatting Trafficking in Persons) by requiring agencies to refer contractor reports of potential human trafficking activity directly to an agency suspension and debarment official (“SDO”).  Prior to this legislation, contractors have been required to notify their contracting officer and the agency inspector general upon receiving “[a]ny credible information” that a human trafficking violation had occurred.  See FAR § 52.222-50(d)(1).  Now agencies will be required to refer these reports to their SDOs, creating additional risk for contractors that disclose potential violations. 

Continue Reading New Law Increases Government Scrutiny of Contractor Compliance with Anti-Trafficking Provisions

By: Robert Huffman, Susan Cassidy, Michael Wagner, Ryan Burnette, and Emma Merrill

This is the seventeenth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through August 2022.  This blog describes key actions taken to implement the Cyber EO during September 2022.

I. OMB Issues Memorandum Requiring Executive Agencies to Obtain Self-Attestations and Potentially SBOMs from Software Vendors

On September 14, 2022, the Director of the Office of Management and Budget (“OMB”) issued a memorandum to the heads of executive branch departments and agencies addressing the enhancement of security of the federal software supply chain.  Covington covered that memorandum in detail in an earlier post.  The memorandum applies to all software (other than agency-developed software) to be operated “on the agency’s information systems or otherwise affecting the agency’s information,” and requires new self-attestations from software vendors before that software can be used by agencies.

In particular, the memorandum mandates that to use software, agencies must first obtain a self-attestation from software providers that the software developer follows the secure development processes described by NIST Secure Software Development Framework (NIST SP 800-218) and the NIST Software Supply Chain Security Guidance (discussed here) (collectively, “NIST Guidance”).  Moreover, the memorandum also provides that a Software Bill of Materials (“SBOM”) and/or other artifact may be required by the agency in solicitation requirements.  If required, SBOMs must either be retained by the agency or posted on the website of the software producer.  SBOMs must be generated in the format set forth in a report issued by the National Telecommunications and Information Administration or successor guidance by the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”).

The American Bar Association (“ABA”) Subcontracting, Teaming and Strategic Alliances Committee hosted a roundtable to discuss the OMB memorandum on October 5, 2022.  The Committee discussed the content of the memorandum, how it relates to the Cyber EO, how the memorandum may immediately affect subcontractors, the timing for implementation of the new requirements on software, and potential ramifications of the lack of a traditional rulemaking process, including the absence of a notice and comment period.  The roundtable also considered whether there will be waivers for exceptional circumstances, vendors’ unwillingness to provide the necessary information, whether there will be differing timelines for software versus critical software, and the memorandum’s impact on bid protests, among other issues arising from the issuance of the memorandum.  That Committee is expected to continue to track this issue.

II. Industry Associations Criticize Pending FY 2023 NDAA Provisions Requiring SBOMs and Certifications.

Contemporaneous with the issuance of the OMB memorandum, several technology and defense industry associations submitted letters to the leadership of the House and Senate Armed Services Committees objecting to provisions in the pending House and Senate FY 2023 defense authorization bills that would require SBOMs and corresponding certifications from certain contractors.  Specifically, Section 6722 of the House-passed version of the FY 2023 NDAA would require the Department of Homeland Security (DHS) to issue guidance requiring DHS contractors to provide a “planned bill of materials” with all offers for new contracts relating to the procurement of IT and communications technology products and services and to certify that each item listed on the bill of materials is free from known security vulnerabilities or defects and/or notify the agency of each such vulnerability or defect.  The section would also require holders of an existing DHS contract for such products or services to submit the bill of materials used for such contract and the certification and notification required for new DHS contracts.

Section 1627 of the version of the FY 2023 NDAA passed by the Senate Armed Services Committee would require the U.S. Department of Defense (DOD) to amend the DFARS to require an SBOM for all non-commercial software created for or acquired by DOD going forward and a study to determine the feasibility and advisability of acquiring an SBOM for software already acquired by the Department.  The provision would also require DOD to develop, in consultation with industry, an approach for commercial software used or to be acquired by DOD that provides policies and processes for “operationalizing” SBOMs “to enable [DOD] to understand promptly the cybersecurity risks to Department capabilities posed by vulnerabilities and compromises in commercial and open source software.”  The industry associations criticized these provisions as vague and premature given the lack of any standard agency or industry approach to SBOMs and the ongoing efforts (as reflected in the OMB memorandum) to develop such standard approaches.

III. Senate Homeland Security Committee Adopts Bipartisan “Securing Open Source Software Act of 2022”

Shortly after the issuance of the OMB memorandum, Senators Peters and Portman introduced S.4913 a bipartisan bill, “the Securing Open Source Software Act of 2022” to establish certain duties of the Director of CISA regarding open source security software.  The government has long supported the use of open source software in appropriate circumstances, but the Log4j vulnerability in 2021 highlighted the need for a risk based  framework for using open source code.  The bill reiterates the importance of open source software to overall cybersecurity and directs the Director to perform outreach and engagement to bolster its security, support federal efforts to strengthen the security of open source software, and coordinate with non-federal entities to ensure the long term security of open source software, among other duties.  Additionally, the bill would require the Director to publish a framework incorporating NIST, industry, and open source software community frameworks and best practices for assessing the risk of such software, within 1 year of the bill’s enactment into law.  The bill would also establish a pilot open source program at selected agencies and require an assessment by the Director as to whether open source functions should be established at some or all of the covered agencies.  If the Director determines that some or all of the open source functions should be established at some or all of the agencies, the Director must issue guidance on how to implement those functions.                                         

IV. NIST Issues Final Guidance on Cybersecurity of Consumer Internet-of-Things (IoT) Products

On September 20, 2022, the National Institute of Standards and Technology (NIST) issued Internal Report 8425, “Profile of the Core Baseline for Consumer IoT Products.”  The report states that the core baseline is intended to be the “starting point for manufacturers to use in identifying the cybersecurity capabilities their customers may expect from the IoT devices they create.”  The report tailors (“profiles”) the core baseline capabilities for specific product sectors or use cases, in this case consumer IoT products.  These use cases can be used in the criteria for the cybersecurity labelling of IoT devices that the Cyber EO directs NIST to develop.

The Biden Administration is planning to move forward with developing a product labelling regime to alert consumers to the cybersecurity risks and capabilities of IoT products.  In a fact sheet issued on October 11, 2022, the White House announced that it will host a meeting with stakeholders in October “to discuss the development of a label for [IoT] devices so that Americans can easily recognize which devices meet the highest cybersecurity standards to protect against hacking and other cyber vulnerabilities…[b]y developing and rolling out a common label for products that meet U.S. Government standards and are tested by vetted and approved entities.”  The fact sheet states that the Administration intends to start by focusing on some of the most common and often most at-risk technologies–routers and home cameras–“to deliver the most impact most quickly.”

This is the sixteenth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the cyber EO from June 2021 through July 2022.  This blog describes key actions taken to implement the Cyber EO during August 2022.

Continue Reading August 2022 Developments Under President Biden’s Cybersecurity Executive Order

As we have previously covered on this blog, challenges to the terms of a solicitation typically must be raised in a bid protest brought prior to proposal submission.  The Government Accountability Office recently sustained such a pre-award protest in Selex ES, Inc., B-420799 (Sept. 6, 2022). 

Continue Reading GAO Sustains Pre-Award Protest and Finds Solicitation Terms to Be Ambiguous

On September 12, 2022, the U.S. Cybersecurity and Infrastructure Security Agency (“CISA”) published a Request for Information, seeking public comment on how to structure implementing regulations for reporting requirements under the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA”).  Written comments are requested on or before November 14, 2022 and may be submitted through the Federal eRulemaking Portal: http://www.regulations.gov.

Continue Reading CISA Requests Public Comment on Implementing Regulations for the Cyber Incident Reporting for Critical Infrastructure Act

On September 14, 2022, the Director of the Office of Management and Budget (“OMB”) issued a memorandum to the heads of executive branch departments and agencies addressing the enhancement of security of the federal software supply chain.  The memorandum applies to all software (other than agency-developed software) developed or experiencing major version changes to be operated “on the agency’s information systems or otherwise affecting the agency’s information,” and requires new self-attestations from software vendors before that software can be used by agencies.  

The memorandum is one among many deliverables stemming from Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  We have covered developments under this Executive Order as part of a series of monthly posts, with the first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through August 2022.  Key requirements of the memorandum are discussed in more detail below.

Continue Reading <strong>OMB Issues Memorandum on Self-Attestations by Software Developers </strong><strong>of Secure Software Development Practices and Collection of Software Bill of Materials</strong>

This is the fifteenth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”).  The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through June 2022.  This blog describes key actions taken to implement the Cyber EO during July 2022.

Continue Reading July 2022 Developments under President Biden’s Cybersecurity Executive Order