Commercial Items

The Trump Administration has declared this month National Slavery and Human Trafficking Prevention Month, calling on industry associations, law enforcement, private businesses, and others to work toward ending modern slavery and human trafficking. This proclamation follows the Administration’s efforts to combat human trafficking, which we have previously discussed here, and comes on the heels of an OMB memorandum released last fall aimed at “enhanc[ing] the effectiveness of anti-trafficking requirements in Federal acquisition while helping contractors manage and reduce the burden associated with meeting these responsibilities.”
Continue Reading Trump Administration Renews Focus on Anti-Human Trafficking Efforts

After nearly two years of planning, GSA has released an RFP seeking prototypes of online shopping portals that would allow federal customers to buy COTS items from their computers.

GSA’s plan implements Section 846 of the NDAA for FY 2018, which instructed the agency to create an internet marketplace exempt from many standard procurement regulations.  As we have previously discussed in this blog, GSA began planning in 2017, sought input from industry in 2018 and 2019, and the announced earlier this year that it would proceed with proofs of concept. But while the new solicitation was a long time coming, GSA clearly is ready to move quickly: contractors will have less than a month before the proposal deadline to digest the solicitation and assess how its terms might affect their business approach, data rights, and competitive standing.Continue Reading GSA’s E-Commerce Portal Program Is Here: What the New Solicitation Means for Government Contractors

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

Last month, the Federal Circuit weighed in on a largely-overlooked provision in the Federal Acquisition Streamlining Act (“FASA”) that requires federal agencies, to the maximum extent practicable, to procure commercially available goods and services to meet their needs.  In the case — Palantir USG v. United States — the court affirmed the decision by the Court of Federal Claims (“COFC”) enjoining the Army from proceeding with its Distributed Common Ground System – Army Increment 2 (“DCGS-A2”) procurement until it complies with the FASA provision.  This bid protest decision has potentially significant implications for commercial item contractors.
Continue Reading Federal Circuit Charts New Terrain in 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 Takeaways From DoD’s Proposed Changes to Commercial Item Contracting

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.
Continue Reading OIG Report Criticizes GSA’s TDR Pilot Program

[Updated August 13, 2018]

If an agreement qualifies as a “subcontract” under a government contract, then it may be subject to certain flow-down, compliance, and reporting requirements.  These requirements are intended to protect the government’s interests, and have significant ramifications for contractors, e.g., increasing transaction costs, expanding potential areas of exposure.  These compliance obligations and risks can even deter some companies from performing under government contracts, especially those companies offering commercial items.

Currently, there is no uniform definition of “subcontract” in the applicable procurement regulations or in the procurement chapters under Titles 10 and 41 of the U.S. Code.  Indeed, there are more than twenty varying definitions of “subcontract” in the FAR and DFARS, with many clauses failing to specify which definition applies.  Now Congress is looking to address this lack of uniformity through the FY 2019 National Defense Authorization Act (NDAA).Continue Reading Congress Aims to Redefine the “Subcontract”

GSA recently announced it is supporting an Inspector General investigation into alleged, third-party fraudulent activity in the System for Award Management (“SAM”). The GSA announcement suggests that fraudulent SAM accounts may have been used to divert certain federal payments to unauthorized bank accounts. The announcement does not elaborate on the scope of potentially impacted entities or the amount of misdirected payments at issue. GSA has advised impacted entities to validate their SAM registration and confirm their financial information. Although GSA has indicated it has or will reach out to impacted entities, contractors would be well advised to confirm independently the accuracy of their current SAM registration.
Continue Reading Fraudulent SAM Accounts Lead to More Complicated SAM Registration Requirements

Following instructions from Congress to create a new online shopping system leveraging existing commercial practices, the General Services Administration (“GSA”), in coordination with the Office of Management and Budget (“OMB”), has released an implementation plan (“Plan”) to begin e-commerce purchases by 2019.  As discussed in a previous blog post, GSA’s Plan is a first step toward implementing Section 846 of the National Defense Authorization Act for FY 2018, which requires GSA to develop “e-commerce portals” – essentially online shopping sites – for commercially available off-the-shelf (“COTS”) item procurements.
Continue Reading GSA Unveils Plan for Commercial Online Shopping Portal

A generic pharmaceutical distributor, Acetris Health, LLC, has challenged the Final Determination of U.S. Customs and Border Protection (“Customs”) that Acetris’ generic prescription drug, Rosuvastatin Calcium Tablets (“Rosuvastatin”), is a product of India, the place where the active pharmaceutical ingredient (“API”) is produced.  If successful, the challenge in the U.S. Court of International Trade (“CIT”) could have a meaningful impact on decisions about where to manufacture API for the very broad range of drug products sold to the U.S. Government.
Continue Reading The Long-Standing TAA “Substantial Transformation” Standard for Drug Products is Challenged at the Court of International Trade