Flying in Friendly Skies: The Federal Aviation Administration’s Unique Bid Protest Forum

Federal contractors usually think of two bid protest forums: the Government Accountability Office and the Court of Federal Claims.  But there is another protest forum that often flies under the radar: the Federal Aviation Administration’s Office of Dispute Resolution for Acquisition — aka the ODRA.

The ODRA has exclusive jurisdiction over bid protests of FAA procurements.  ODRA protests are reviewed under the Administrative Procedure Act, adjudicated by one of the ODRA’s Administrative Judges, and subject to direct appeal to a federal circuit court.  While many of the fundamental principles of bid protest practice at GAO and the Court of Federal Claims apply equally at the ODRA, there are several unique features. Continue Reading

Federal Online Shopping Platform Coming Soon — GSA to Issue Prototype RFP Within the Year

In the latest step towards delivering on the long-promised “Procurement Through Commercial e-Commerce Portals” program, the General Services Administration has announced plans to build a proof-of-concept for federal online shopping, aiming to issue an RFP by the end of the year for web-based acquisition platforms.

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New DOJ Cooperation Credit Guidelines a Welcome Sign, but Key Questions Remain Unresolved

This week, the Department of Justice (“DOJ”) released formal guidelines (“the Guidelines”) for awarding credit to entities that cooperate in False Claims Act (“FCA”) investigations. Frequently hinted at by DOJ officials in recent speeches and public statements, the Guidelines have been eagerly anticipated by practitioners in the FCA space.

Despite the build-up, the Guidelines are hardly revolutionary in many respects, as they largely memorialize existing discretionary practices for awarding cooperation credit that are well familiar to practitioners in the area. Nonetheless, the codification of the Guidelines in the Justice Manual may prove to be a significant development, especially if this more formal policy statement results in greater transparency and consistency in settlement discussions with DOJ. Unfortunately, the Guidelines leave unresolved certain key questions, and whether DOJ ultimately achieves its objective of promoting increased disclosure and cooperation will depend substantially on the manner in which the Guidelines are implemented. Continue Reading

New York Executive Order and Legislation Signal Increased Debarment Activity

Two recent developments in Albany suggest that New York is poised to kick its debarment activity into a higher gear. First, Governor Andrew Cuomo issued an executive order pointedly reminding state entities of their authority to debar non-responsible contractors and directing all state entities to ensure that contractors remain “responsible” throughout the term of their contracts. Second, the New York legislature recently enacted a bill to reform the Metropolitan Transportation Authority (MTA), which included far-reaching provisions that allow MTA to debar any contractor that exceeds 10% of the contract cost or time for a construction project. Together, these developments indicate a move towards greater scrutiny of contractor performance, and they highlight the significant consequences of not meeting compliance and performance obligations.

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Rights in Government-Funded IP: Changes May be on the Horizon

Many entities engaged in federally funded R&D have closely monitored the efforts of the National Institute of Standards and Technology (“NIST”) over the last year as it has studied strategies for maximizing U.S. innovation through government-funded research.  Last week, NIST published its findings in NIST Special Publication 1234, Return on Investment Initiative for Unleashing American Innovation Green Paper (“Green Paper”).

Benefiting from information received from an initial Request for Information, public meetings, a summit, consultations with interagency working groups, stakeholder engagement sessions, and comments received on a draft version of the Green Paper, NIST’s findings are designed to inform future policy decisions throughout the Federal Government.  These future decisions could have tremendous impact:  the Federal Government invested approximately $150 billion in R&D in 2017 alone, representing about one-third of all U.S. R&D spending.

After discussing the Green Paper at a high level, we highlight below a few of NIST’s findings which may be of particular interest to many government contractors. Continue Reading

Inspector General Audit of the FMS Program Underway

Last month, the Department of Defense Inspector General announced that it was undertaking an audit of the Foreign Military Sales (FMS) Agreement Development Process.  The audit will assess how the Defense Security Cooperation Agency (DSCA), Military Departments, and other organizations coordinate foreign government requirements for defense articles and services and whether DoD maximizes the results of the FMS agreement development process.

The audit is in response to a congressional reporting requirement included in the House Report to the National Defense Authorization Act for Fiscal Year 2019.  The House Report noted Congressional concern that the FMS process is “slow, cumbersome, and overly complicated,” and that the acquisition decisions supporting the FMS process are “stovepiped,” leading to an FMS program that is “not coordinated holistically across [DoD] to prioritize resources and effort in support of U.S. national security objectives and the defense industrial base.”  Consequently, Congress directed DoD to conduct this audit of the FMS program and submit a final report to Congress.  The tone and language of the House Report indicates that Congress is seeking to streamline the process for all stakeholders, including the U.S. military, foreign partners, and industry.  The House Report specifically calls out precision guided munitions as a focal point for additional foreign military sales that may mitigate risk to the U.S. industrial base.

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Suspension & Debarment Update: Department of Labor Announces New Pilot Program

Keen observers of federal suspension and debarment practice have noticed a recent change at the Department of Labor (DOL):  After years of inactivity, DOL’s discretionary suspension and debarment program suddenly came to life in 2017 and has been issuing suspensions and debarments at a steady clip ever since. [1]  Now, according to a recent announcement, DOL is poised to turn up its suspension and debarment activity yet another notch.  Starting this month and continuing through April 2020, DOL will be instituting a pilot program aimed at promoting and expediting its suspension and debarment activity, with the stated goal of “reduc[ing] the processing time on discretionary suspension and debarment actions from months to days.”  Continue Reading

The Topsy-Turvy World of State and Local Bid Protests

Many contractors are familiar with the well-established processes of federal bid protests.  Less known is the dizzying variety of procedures applicable to state and local bid protests.  Each jurisdiction has its own rules — in terms of timing, protestable issues, standard of review, document production, and more.  A fundamental tenet in one jurisdiction may be completely inapplicable in another.

What does that mean for a contractor looking to grow its state and local business?  Be prepared:  Become familiar with the rules and practices for bid protests in the relevant jurisdiction prior to the award decision.  When the award decision is made, you’ll be in a better position to assess whether to protest and, if so, when and how to do it.

Here are a few issues that are often helpful to consider while preparing for a potential state or local protest:

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Senate Armed Services Subcommittee on Cybersecurity Holds Hearing to Discuss the Responsibilities of the Defense Industrial Base

On March 26, 2019, the Senate Armed Services’ Subcommittee on Cybersecurity held a hearing to receive testimony assessing how the Department of Defense’s (“DOD”) cybersecurity policies and regulations have affected the Defense Industrial Base (“DIB”).

To gain a better understanding of the DIB’s cybersecurity concerns, the Subcommittee invited William LaPlante, Senior Vice President and General Manager of MITRE’s National Security Sector; John Luddy, Vice President For National Security Policy at the Aerospace Industries Association; Christopher Peters, Chief Executive Officer of the Lucrum Group; and Michael MacKay, the Chief Technology Officer of Progeny Systems Corporation.

In their opening remarks, the Chairman of the Subcommittee, Senator Mike Rounds (R-SD), and Ranking Member, Senator Joe Manchin (D-WV), acknowledged industry concerns about the DOD’s lack of clarity and disparate implementation of cybersecurity regulations, such as guidance relating to DFARS 252.204-7012 (“DFARS Cyber Rule” or “Rule”) and National Institute of Standards and Technology (“NIST”) Special Publication (“SP”) 800-171.

Senator Rounds stated that he “expects [DOD] to come up with measured policies to make improvements in [cybersecurity]” and he “hope[s] DOD takes seriously the concerns of the DIB.”  He further noted that DOD “cannot simply apply increasingly stringent cybersecurity requirements on its contractors” and that “doing so without subsidy or assistance is unlikely to particularly improve cybersecurity [for] the DIB” and would likely drive the most innovative small businesses out of the supply chain.  Senator Rounds called for putting a program in place to ensure the best possible protections for contractors regardless of size and referred to the “Achilles heel” of this issue as the desire to use a large number of small contractors while still needing to protect sensitive government information.  Later in the hearing, Senator Manchin expressed great concern over the cyber incidents experienced by DOD contractors and urged the witnesses to “tell [the Subcommittee] what you need . . . [the Subcommittee] is here to fix it and you’re here to tell us what’s broken.”

Summarized below are key points discussed during the hearing:

  • Clear, Scalable, and Consistent Cybersecurity Policy:  Witnesses representing the DIB agreed that the future of the defense industry is dependent on robust cybersecurity and, to that end, expressed the need for DOD to clarify critical aspects of existing policy.  For instance, the identification and definition  of Controlled Unclassified Information and its subset, Covered Defense Information (“CDI”) was highlighted as an area of concern.  DIB witnesses testified that the current definition of CDI in the DFARS Cyber Rule has become very broad.  They suggested that DOD collaborate with the DIB to identify critical information so contractors are not protecting mundane data, but focusing on securing truly sensitive information.  John Luddy noted that “with limited resources, if [contractors] try to protect everything that is currently considered CDI, we may under-protect the really important things.”
  • Unified DOD Approach:  All of the witnesses emphasized the need for DOD to take a unified approach to cybersecurity that helps to minimize the burden on industry.  The industry witnesses were clear that, together with large prime contractors, DOD can help support the middle and lower-tier suppliers to be cyber secure, but clear guidance and programs must first be in place. Currently, DOD has taken an “ad hoc, service-by-service” approach as it works towards developing actionable regulations that has resulted in segmented and overlapping contractor infrastructure, and increased costs.  The DIB witnesses commended recent memoranda issued by Ellen Lord, the Under Secretary of Defense for Acquisition and Sustainment, that clarified requirements for contracts overseen by the Defense Contract Management Agency, but they also noted that the memoranda “raised issues that need to be collaboratively assessed.”  The witnesses made plain the need for more opportunities to contribute to future standards and guidance by DOD.
  • Measuring and Certifying Cybersecurity Compliance:  The DIB witnesses highlighted the numerous NIST SP 800-171 controls and the need to develop an approach using “real, objective metrics” that helps industry measure their cybersecurity performance against those controls.  Defense contractors have been frustrated with the lack of clear metrics for compliance, which has resulted in the perception of DOD’s uneven enforcement of standards.  The witnesses urged DOD to adopt a standard interpretation of NIST SP 800-171 as a useful baseline and starting point.  They would prefer that DOD “set the bar high and set it once to hold all [companies] accountable, not only to spare companies from the cost, but also the need to adjudicate between different and potentially conflicting direction.”
  • Information Sharing:  The witnesses also drew attention to the need for greater information sharing.  One idea raised by the DIB witnesses included the formation of a centralized DOD threat sharing initiative that distributes relevant and timely data to the DIB to bolster cybersecurity efforts.  The representatives acknowledged the tension between information sharing that is aimed at identifying and addressing threats and information that is competitive or business sensitive.  But, there was a consensus that progress on information sharing has been made within the DIB and that further improvements would be welcome.

Throughout the hearing, members of the Subcommittee and representatives from the DIB seemed to agree that greater collaboration with DOD on contractor cybersecurity issues and supply chain issues would be necessary to address systemic concerns.  While there was a broad focus on DFARS requirements and NIST SP 800-171, a number of related issues were raised with the goal of helping businesses prioritize investments and meet DOD’s cybersecurity standards.  As the cybersecurity efforts by DOD and the DIB continue, there was consensus during the hearing for a considered approach to partitioning cybersecurity responsibility among DOD, prime contractors, and their subcontractors so that no single entity shoulders the entire burden.