On July 2, 2020, the Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) promulgated a final rule resolving long-standing uncertainty regarding its enforcement authority over health care providers participating in TRICARE, a federal program that provides health care to service members, veterans, and their families.[1] The rule officially removes OFCCP’s regulatory authority over TRICARE providers by amending the definition of “subcontract” set forth in the governing Department of Labor regulations. Although the amendment carves out TRICARE providers from OFCCP authority by name and leaves the rest of the “subcontractor” definition unchanged, OFCCP expressly raised the possibility that it would issue additional sub-regulatory guidance concerning its jurisdiction over Federal Employees Health Benefit Program (“FEHBP”) and Veterans Administration Health Benefit Program (“VAHBP”) providers. Continue Reading
“Section 889” Prohibition on “Use” of Covered Telecommunications Equipment by Federal Contractors Released as an Interim Rule
On July 10, 2020, the interim rule implementing Section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232) was released by the U.S. Government’s Federal Acquisition Regulatory Council. Section 889 prohibits the U.S. Government from buying (as of August 2019)—or contracting with an entity that uses (as of August 2020)—telecommunications equipment or services produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities) or, in certain cases, telecommunications or surveillance equipment or services produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of those entities). The interim rule addresses the new prohibition on “use” of the banned telecommunications equipment and services and clarifies the prohibition on buying such equipment that went into effect in 2019. The rule is not limited to end products produced by those companies; it also covers most telecommunications components from those companies that are incorporated into end products. The prohibition and the interim rule for Section 889(a)(1)(B) become effective on August 13, 2020.
This prohibition on use applies to all U.S. Government prime contractors, domestic and international, spanning a wide array of industries, including the health-care, education, automotive, aviation, and aerospace industries; manufacturers that provide commercially available off-the-shelf (COTS) items; and contractors that provide building management, billing and accounting, and freight services. Comments on the interim rule are due on or before September 14, 2020.
Additional details on the interim rule and its impact on Government contractors are available in a Client Alert that we published on July 13, available here.
Look Before You Release — ASBCA Enforces Release of Claims to Contractor’s Detriment
A recent Armed Services Board of Contract Appeals decision serves as a timely reminder for contractors to carefully read and consider any release of claims before signing — especially when you may have otherwise-recoverable coronavirus-related cost increases. Continue Reading
Defense Contractors Say Section 3610 and Other Contractor Support Measures Require Relief
It goes without saying that the COVID-19 pandemic has significantly affected the Department of Defense (“DoD”) and the defense industrial base. And while Congress has taken steps to mitigate these impacts, the sheer scale of the pandemic’s effects pose a continuing challenge to both DoD and its contractors. Now a group of major defense contractors has submitted a pair of joint letters to the Pentagon and OMB highlighting the need for further action and the risk to the defense industrial base if such actions are not taken.
GAO Clarifies Timing for Corrective Action Protest
Although it is usually good news for a protester when an agency takes corrective action, the corrective action sometimes fails to adequately address the protest grounds. When this occurs, a protester may wish to file a new protest challenging the agency’s corrective action. The question of when to file a corrective action challenge is often tricky, however — and a misstep can result in dismissal. GAO recently clarified that timing in Computer World Services Corporation.
Contractor Supply Chain Readiness – An Update on Expected Regulatory Changes
In recent years, both Congress and the Executive Branch have made it a key priority to mitigate risks across the industrial and innovation supply chains that provide hardware, software, and services to the U.S. government (“USG”). Five of these initiatives are likely to result in new regulations in 2020, each of which could have a fundamental impact on companies’ ability to sell Information, Communications, Technology and Services (“ICTS”) to the USG. As these requirements begin to take hold, federal contractors should be mindful of potential impacts and the actions that can be taken now to prepare for increased USG scrutiny of their supply chain security.
GSA Awards First Contracts to Develop an Online Shopping Platform, and the White House Seems to Be Paying Attention
On Friday, the General Services Administration (“GSA”) announced that it had awarded three contracts to develop online shopping portals for commercially-available off-the-shelf (“COTS”) items. The awardees are Amazon Business, Fisher Scientific, and Overstock.com.
Federal Circuit Splits on Blue & Gold Question in Inserso
It’s a big deal in the government contracts community whenever the Federal Circuit weighs in on a bid protest. And it is a particularly big deal when the Federal Circuit issues a split opinion in a bid protest. That’s what happened last week in Inserso Corporation v. United States (No. 2019-1933), where the Federal Circuit issued a split opinion denying a protest as waived under Blue & Gold.
With Potential New TINA Audits on the Horizon, the ASBCA Provides a Helpful Primer on Defending Against Defective Pricing Claims
Late last year, a spokesman for the Department of Defense announced without fanfare that the agency would increase audits of certified cost or pricing data under the Truth in Negotiations Act (“TINA”). While the full effect of that enhanced focus on TINA compliance remains to be seen, a recent decision by the Armed Services Board of Contract Appeals (“ASBCA”) provides helpful guidance for navigating upcoming TINA audits and defending against defective pricing claims, particularly in situations involving an on-going program where documents contain both facts and judgmental estimates.
Whose Knowledge Counts? The Expanding Scope of Government Knowledge in FCA Cases
This week marks the four-year anniversary of the Supreme Court’s landmark False Claims Act decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016). In Escobar, the Supreme Court confirmed that the question of government knowledge lies at the heart of FCA liability determinations, but it did not specifically address who counts as “the Government” for purposes of this inquiry. Since Escobar, however, a number of circuits have confirmed that the relevant scope of “government knowledge” includes both the payor agency and other agencies with regulatory oversight and enforcement responsibilities, a recognition that has far-reaching consequences for FCA litigation. To learn more about this emerging trend in the case law and its potentially powerful implications for FCA matters, click here.
