Takeaways From DoD’s Proposed Changes to Commercial Item Contracting

[This article was originally published in Law360 and has been modified for the blog.]

Over the summer, pursuant to Section 874 of the FY 2017 National Defense Authorization Act (“NDAA”)[1], the Department of Defense (“DoD”) issued a proposed rule [2] to exclude the application of certain laws and regulations to the acquisition of commercial items, including commercially available off-the-shelf (“COTS”) items. Among other things, the proposed rule identifies certain DFARS and FAR clauses that should be excluded from commercial item contracts and subcontracts, and sets forth a narrower definition of “subcontract” that would carve out a category of lower-tier commercial item agreements from the reach of certain flow-down requirements. A summary of the proposed rule and our key observations/takeaways are below. Continue Reading

OIG Report Chronicles Recent Attempts To Construct FBI Headquarters Through Public-Private Partnership, Highlights Proposed Use of Federal Capital Revolving Fund

By Peter Terenzio, Sandy Hoe and Justin Ganderson on September 5, 2018 Posted in OMB Scoring, Public-Private Partnerships

Last week, the GSA Office of Inspector General (“OIG”) released a Report explaining how GSA decided to abandon previous plans to build a new suburban campus for the FBI, and instead demolish and then rebuild the J. Edgar Hoover (“JEH”) building in Washington, D.C. Although much of the coverage of the Report has focused on the role of the White House in the decision-making process and the GSA Administrator’s failure to acknowledge that role in testimony before Congress, the Report also highlights the Office of Management and Budget’s (“OMB”) strict approach to the budget scoring rules found in OMB Circular A-11, Appendices A and B.

Monitoring The Monitor: Recent Ruling Sheds Light on Applicability of FOIA to Monitorship Documents

By Frederic Levy, Michael Wagner and Michelle Willauer on September 5, 2018 Posted in Suspension and Debarment

The U.S. District Court for the District of Columbia recently issued the latest ruling in a long-running Freedom of Information Act (“FOIA”) dispute involving materials related to a government-mandated monitorship of the compliance and corporate governance systems of Siemens Aktiengesellschaft (“Siemens”), the German multinational conglomerate. See 100Reporters LLC v. U.S. Dep’t of Justice, 2018 WL 2976007 (D.D.C. June 13, 2018). The remarkably detailed opinion reinforces that documents prepared by a monitor, including a monitor’s plans and work product, may be subject to disclosure under FOIA and sheds light on precautions that can be taken to ensure monitorship documents remain protected to the fullest extent possible. Continue Reading

Save the Date – BARDA Industry Day Is Coming

By Jennifer Plitsch and Tyler Evans on August 31, 2018 Posted in Biodefense, Public-Private Partnerships

Registration will open soon for the Biomedical Advanced Research and Development Authority’s (“BARDA”) 2018 Industry Day to be held on October 29 and 30 at the Grand Hyatt in Washington, D.C. This event has been an integral part of BARDA’s outreach efforts to the life sciences community since 2007, and the newest version of this event promises to continue to provide meaningful insight into BARDA’s role in the nation’s public health preparedness efforts.

BARDA is expected to revisit annual topics like revisions to its broad agency announcement and updates to its goals and Government-wide strategic plans. In addition, this year BARDA will have a particular focus on innovation with the rollout of its Division of Research, Innovation, and Ventures (“DRIVe”) and lightning talks on noteworthy development efforts. Applications to participate in lightning talks are due soon, and potential participants should consider whether to take advantage of this unique opportunity.

CBCA Rules Overhaul Finalized: Effective September 17, 2018

By Justin Ganderson, Bryan Byrd, Pierre Hines and Jason Workmaster on August 23, 2018 Posted in Claims and Contract Disputes

On August 17, 2018, the Civilian Board of Contract Appeals (“Board” or “CBCA”) published in the Federal Register its amended Rules of Procedure governing appeals under the Contract Disputes Act (“CDA”). These amended rules: simplify and modernize access to the Board, clarify obligations under certain prior rules, and increase conformity between its rules and the Federal Rules of Civil Procedure (“Federal Rules”). Furthermore, as reflected in the proposed changes issued in the Federal Register in March 2018, the amended rules are intended to “allow the Board to adopt and apply case law applying the relevant Federal Rules, as well as any future amendments to those Federal Rules, without revising the Board’s rules again.”

Our key takeaways are provided below, and a comparison of the Board’s prior and current rules can be found here.

Alleged Sales of Non-TAA-Compliant Products Under GSA Schedule Contracts Are Not False Claims, 7th Circuit Holds

By Justin Ganderson, Evan R. Sherwood and Peter B. Hutt II on August 10, 2018 Posted in Buy American, Country of Origin, Escobar, False Claims Act, Government Contracts Regulatory Compliance, GSA Schedule, Trade Agreements Act

Last year, we wrote about a trial court’s decision to dismiss a False Claims Act (“FCA”) complaint regarding alleged Trade Agreements Act (“TAA”) non-compliances because the relator failed to plead fraud with “particularity” under Rule 9(b). That decision offered a sweeping rebuke of speculative FCA claims, and emphasized why it can be difficult to present a valid FCA claim based on a potential violation of a complex regulatory scheme like the TAA.

Last month, the United States Court of Appeals for the Seventh Circuit unanimously affirmed that decision in United States ex rel. Berkowitz v. Automation Aids, Inc., — F.3d — , 2018 WL 3567836 (7th Cir. July 25, 2018). In doing so, the Seventh Circuit provided additional guidance about various topics, including the Rule 9(b) standard for implied certifications and the power of the materiality defense. Our takeaways are below. Continue Reading

OIG Report Criticizes GSA’s TDR Pilot Program

By Jason Workmaster and Peter Terenzio on August 9, 2018 Posted in Commercial Items, Multiple Award Schedule Contracting, Procurement Policy, Procurement Reform

On July 25, the GSA’s Office of Inspector General (“OIG”) published a report summarizing its audit of the GSA Transactional Data Reporting (“TDR”) pilot program. That ongoing pilot program, which we have covered previously and have been tracking since the beginning, allows participating Federal Supply Schedule (“FSS”) contract-holders to report government-sales data each month, in exchange for relief from regulations that would require them to disclose their commercial sales practices. According to the OIG report, however, GSA cannot objectively measure whether the TDR program is working as intended, because the pilot lacks specific objectives and performance targets. Moreover, the data that GSA has collected from TDR participants is “not available for . . . evaluation of the pilot.” Although the Federal Acquisition Service (“FAS”) disagreed with some of the report’s findings, the report suggests that the TDR program remains a work-in-progress.

NIST to Host CUI Information Security Workshop

By Susan B. Cassidy on July 18, 2018 Posted in Cybersecurity, Defense Industry, Information Technology Contracting

The National Institute of Standards and Technology (NIST), in coordination with the Department of Defense (DoD) and the National Archives and Records Administration (NARA), will host a Workshop providing an overview of Controlled Unclassified Information (CUI) on October 18, 2018. The agenda for the Workshop shows a full day of panels, including those addressing DoD’s “Safeguarding Covered Defense Information and Cyber Incident Reporting” Clause (DFARS Cyber Rule), overviews of NIST Special Publications (SPs) 800-171 and 800-171A, and Government expectations when evaluating contractor implementation of the 800-171 security controls. Continue Reading

Covington Artificial Intelligence Update: Department of Defense Establishes Joint Artificial Intelligence Center

By Susan B. Cassidy, Calvin Cohen and Zachary Mears on July 16, 2018 Posted in Artificial Intelligence (AI), Defense Industry

In a memorandum issued June 27, 2018, Deputy Secretary of Defense Patrick Shanahan ordered the establishment of the Joint Artificial Intelligence Center (“JAIC”) within DoD. The JAIC will report to DoD Chief Information Officer (“CIO”) Dana Deasey and has the “overarching goal of accelerating the delivery of AI-enabled capabilities, scaling the Department-wide impact of AI, and synchronizing DoD AI activities to expand Joint Force advantages.” With the creation of the JAIC, the DoD has acknowledged that the AI “effort is a Department priority,” and one to which government contractors should pay attention.

The JAIC will be the primary organizational component responsible for coordinating and executing DoD’s 2018 Artificial Intelligence Strategy, which was delivered to Congress in June. Although an unclassified version of the report is not out yet, the memorandum elaborates upon what is in the report by stating that “A new approach is required to increase the speed and agility with which we deliver AI-enabled capabilities and adapt our way of fighting.”

Teaming Agreement Challenges for Subcontractors

By Dan Johnson on July 13, 2018 Posted in Sub-Prime Disputes, Subcontracting

A recent Virginia Supreme Court case underscores the hurdles government subcontractors may face when they seek to enforce common teaming agreement terms. CGI Fed’l Inc. v. FCi Federal, Inc., No. 170617 (Va. June 7, 2018). This case of the “disappearing workshare” also illustrates that strategic choices made during teaming agreement negotiations and in litigation may dictate whether the subcontractor has any recourse against the prime contractor. Continue Reading