Domestic Sourcing Requirement Doesn’t Fit DOD’s Gloves

(This article was originally published in Law360 and has been modified for this blog.)

The Government Accountability Office (GAO) recently issued a bid protest decision regarding the application of the Berry Amendment’s domestic sourcing requirement to a U.S. Department of Defense (DOD) solicitation for leather combat gloves with touchscreen capability. In that decision, the GAO found that the nonavailability exception to the Berry Amendment applied to the glove’s kidskin leather even though the agency determined, through market research, that this type of leather was available domestically. Importantly, this decision provides an opportunity for stakeholders to consider the nuances associated with the Berry Amendment’s nonavailability exception and to reflect upon the complex regulatory landscape of domestic sourcing requirements.

Lowest Price Technically Acceptable Solicitations No Longer Acceptable? Reviewing the Department of Defense’s Proposed Changes to the DFARS

By Hunter Bennett and Ryan Burnette on December 27, 2018 Posted in Bid Protests, Government Contracts Regulatory Compliance, Procurement Policy

In a proposed rule issued earlier this month, the Department of Defense (“DoD”) seeks to incorporate into the Defense Federal Acquisition Regulations Supplement (“DFARS”) restrictions on the use of the lowest price technically acceptable (“LPTA”) source selection method from the National Defense Authorization Act (“NDAA”) for Fiscal Years 2017 and 2018. This proposed rule makes clear that these NDAA-imposed restrictions are not going away any time soon, and that DoD contracting officers need to engage in a thorough and reasoned analysis before conducting an LPTA procurement. Continue Reading

Signs of Progress with the Limitations on Subcontracting, but Outstanding Questions Remain

By Scott A. Freling, Tyler Evans and Brooke Stanley on December 20, 2018 Posted in Government Contracts Regulatory Compliance, Procurement Policy, Small Business, Subcontracting

A recently proposed rule would update the Federal Acquisition Regulation (“FAR”) to incorporate statutory changes to limitations on subcontracting that have been in effect since 2013. The U.S. Small Business Administration (“SBA”) has long since revised its own regulations to implement these changes, but some contracting officers have been reluctant to follow these changes in the SBA regulations because the FAR contains contradictory provisions.

The proposed rule is a sign of progress. In particular, it should add significant clarity to the current disconnect between the FAR and SBA regulations. However, the proposed rule is not perfect, and a number of recent developments highlight that outstanding questions remain.

More Novation Complexity In Gov’t Contracts M&A?

By Scott A. Freling, Alexander Hastings and Andrew Guy on December 5, 2018 Posted in Defense Industry, Government Contracts Regulatory Compliance, Multiple Award Schedule Contracting, Procurement Reform, Transactional Support and M&A Diligence

(This article was originally published in Law360 and has been modified for this blog.)

Government contractors undergoing an asset transaction know all too well the peculiarity and uncertainty associated with the transfer of a U.S. government contract through the required novation process. In two recent decisions, the Government Accountability Office considered the impact of such transactions and the novation process on the pursuit of new task orders from the U.S. government, with disappointing results for the affected contractors. Continue Reading

DoD Issues Final Guidance for Assessing Contractor Compliance with NIST SP 800-171

By Susan B. Cassidy and Ian Brekke on November 29, 2018 Posted in Cybersecurity, Defense Industry, Government Contracts Regulatory Compliance, Information Technology Contracting

The Department of Defense (DoD) recently issued final guidance for requiring activities to assess contractors’ System Security Plans (SSPs) and their implementation of the security controls in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171. A draft of this guidance was made available for public comment in April 2018. As noted in our original post on the draft guidance, DoD’s proposed approach raised significant questions as to what role offerors’ implementation of the security controls in NIST SP 800-171 would play in bid protests, contract performance, and post award audits. In the memorandum accompanying the final guidance documents, DoD notes that it has incorporated comments it received from the public into the final guidance. As discussed below, although the DoD has addressed some of the issues raised by the April draft, the final guidance adds some additional concerns and ambiguities.

Time to Resolve a Question About Time: Supreme Court to Consider FCA’s Statute of Limitations

By Peter B. Hutt II, Michael Wagner and Andrew Guy on November 19, 2018 Posted in False Claims Act

When does a private party need to file a qui tam action under the False Claims Act (“FCA”)? Such a seemingly simple question has resulted in three different answers from six different courts. This past Friday, November 16, 2018, the Supreme Court announced it would resolve that circuit split — by granting a request to review the Eleventh Circuit’s decision in United States ex rel. Hunt v. Cochise Consultancy, Inc. The case will merit close attention, as the ultimate outcome could help protect government contractors from intentional and prejudicial delay in litigation.

Still Just A Rat In A CAGE: Recent GAO Decisions Underscore the Need for Precision in Identifying Corporate Entities During the Procurement Process

By Kayleigh Scalzo, Hunter Bennett and Peter Terenzio on November 8, 2018 Posted in Bid Protests, Government Contracts Regulatory Compliance

Many government contractors are part of corporate families consisting of multiple corporate entities. One entity may be named as the official contracting party, but use the resources of affiliates, parents, or subsidiaries during performance. The distinction between those members of the corporate family may not seem important in terms of day-to-day operations — in fact, the synergy and seamlessness between the corporate entities may be a selling point. Two recent GAO decisions make clear, however, that when it comes to bidding on government work, it is important to precisely identify which corporate entity is going to do what and which corporate entity has which resources.

In BDO USA, LLP and Intermarkets Global USA, LLC, GAO’s decisions turned on a perceived misidentification of corporate entities at some point in the procurement process. In BDO, the problem occurred during bid submission. In Intermarkets, the problem occurred when the protest was filed.

What’s in a Brand Name? DoD to Limit Use of “Brand Name or Equal” Contract Competitions

By Michael Wagner and Evan R. Sherwood on November 5, 2018 Posted in Bid Protests, Defense Industry, Procurement Policy

The Department of Defense (“DoD”) has proposed a new rule limiting the use of “brand name or equal” contract competitions, calling on contracting officers to publicly justify their need for a brand name-type product before issuing a solicitation. The rule would implement Section 888(a) of the National Defense Authorization Act of 2017, which directed the Secretary of Defense to “ensure that competition in [DoD] contracts is not limited” by brand name references without a justification under 10 U.S.C. § 2304(f).

“Hey Big Spender . . .”: GAO Reiterates That Agencies Must Meaningfully Consider Price In Best Value Tradeoffs

By Hunter Bennett and Evan R. Sherwood on November 2, 2018 Posted in Bid Protests

In three related bid protest decisions made public last week, the Government Accountability Office (“GAO”) reaffirmed the principle that agencies must meaningfully consider price when making best value tradeoff decisions. GAO sustained the protests, stressing that merely paying lip service to price while selecting a more expensive, higher-rated offeror is not sufficient — agencies must provide a rational explanation for why they have decided to pay a premium for the awardee’s technical superiority.

Takeaways from DoD’s Proposed Changes to Certain Sourcing Restrictions

By Justin Ganderson and Scott A. Freling on October 31, 2018 Posted in Buy American, Domestic Preferences, Procurement Policy, Procurement Reform

Pursuant to Sections 817 and 881(b) of the FY 2017 National Defense Authorization Act (“NDAA”), the Department of Defense (“DoD”) recently issued a proposed rule to amend certain sourcing restrictions found in DFARS subpart 225.70 and related clauses. Specifically the proposed rule would amend the DFARS to:

extend the Berry Amendment’s domestic sourcing restrictions to the acquisition of certain athletic footwear for members of the Armed Forces, when the procurement is valued at or below the simplified acquisition threshold [Section 817], and
recognize that Australia and the United Kingdom of Great Britain and Northern Ireland (the “UK”) are now members of the National Technology Industrial Base (“NTIB”), thereby permitting the United States to acquire certain items (that are subject to the sourcing restrictions in 10 U.S.C. 2534) if they are manufactured in the UK, Australia, Canada or the United States [Section 881(b)].

We provide our takeaways below. Continue Reading