Echoing the Obama Administration’s Better Buying Initiative, the Biden Administration announced the Better Contracting Initiative (“BCI”), a four-pronged initiative designed to ensure the Federal Government gets better, and more consistent, terms and prices when purchasing commercial goods and services, while enhancing support for small and disadvantaged businesses.  The Initiative’s four prongs include:

1. Leveraging Data Across Federal Agencies to Get Lower Prices and Better Terms.

Under the BCI, the Office of Management and Budget (“OMB”) will launch a new, centralized data management strategy and tools to allow for greater sharing of price data and information on vendors and contracts across agencies within the Federal Government.  According to the fact sheet accompanying the announcement of the BCI, this sharing of information will not only result in better value solutions, but will also advance equity by allowing Federal procurement officials to focus their searches on information that could support decisions to use a small business set-aside.  One of the assumptions underlying the need for more information is OMB’s assertion that “contractors [are] operating at historically high margins.” 

The BCI’s call for collecting and centrally managing commercial procurement data echoes the transactional data reporting (“TDR”) approach adopted under the General Services Administration (“GSA”) Multiple Award Schedules program.  The Biden Administration presumably hopes that the BCI will drive greater savings and more pricing consistency, consistent with the sort of benefits that GSA reported after implementing TDR.

2. Negotiating Common Enterprise-Wide Software Licenses.

According to the fact sheet, “prices routinely vary up to 20 percent for the same software across agencies.”  Under the BCI, GSA will negotiate Government-wide IT software license agreements with a large (but unnamed) software provider.  The fact sheet anticipates that these Government-wide IT software licenses will reduce the price variance in software procurement, secure more favorable terms and conditions, and save time across the Federal Government by obviating the need for each agency to plan, research, and procure the same software solutions.  Beyond software, Federal Agencies will retain the ability to leverage best-in-class enterprise contracts for common goods and services, consistent with efforts that grow small business participation and supply chain diversity.

3. Saving Money and Avoiding Waste by Getting Contract Requirements Right the First Time. 

OMB will issue guidance that directs Federal agencies to use a proven methodology to pinpoint requirements for high priority professional services acquisitions.  The fact sheet noted that “contracts often don’t clearly reflect the agencies’ needs, resulting in expensive modifications.”  In an attempt to mitigate those costs, GSA will sponsor a series of facilitated requirements development and acquisition planning workshops for service contracts with acquisition teams across the Federal Government.  GSA will also help train government procurement personnel to facilitate similar workshops at their own agencies.

4. Getting Better Value from Sole Source and Other High-Risk Contracts.

Select civilian agencies that have significant sole-source contracting or priority programs with underperforming contracts will engage with specialized teams of cost and engineering experts to participate in inter-agency peer reviews to bring down what OMB describes as inflated prices.  Agencies will also be able to leverage “hybrid” contracts for appropriate acquisitions.  “Hybrid” contracts allow for multiple types of payment (e.g., cost-reimbursement, labor-hour, fixed-price) to better align with levels of risk during different parts of the lifecycle of a large acquisition for development and production.  The fact sheet cites to efforts by the Department of Defense to institute “peer reviews where independent procurement teams review terms to deliver a second opinion and leveraging special teams of cost and engineering experts like the “Navy ‘Price Fighters,’ to reduce the risk of inflated prices” as examples of strategies that have reduced costs.

As a result of these efforts, the Administration estimates that the BCI will generate more $10B in annual savings and cost avoidance while improving the performance of Federal contracts.  As with many such initiatives, whether those expectations are realistic will depend upon the accuracy of the Administration’s assumptions, details of the Initiative’s implementation, and the response(s) of the marketplace.

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Photo of Jennifer Plitsch Jennifer Plitsch

Jennifer Plitsch leads the firm’s Government Contracts Practice Group, where she works with clients on a broad range of issues arising from both defense and civilian contracts including contract proposal, performance, and compliance questions as well as litigation, transactional, and legislative issues.

She…

Jennifer Plitsch leads the firm’s Government Contracts Practice Group, where she works with clients on a broad range of issues arising from both defense and civilian contracts including contract proposal, performance, and compliance questions as well as litigation, transactional, and legislative issues.

She has particular expertise in advising clients on intellectual property and data rights issues under the Federal Acquisition Regulations (FAR) and obligations imposed by the Bayh-Dole Act, including march-in and substantial domestic manufacturing. Jen also has significant experience in negotiation and compliance under non-traditional government agreements including Other Transaction Authority agreements (OTAs), Cooperative Research and Development Agreements (CRADAs), Cooperative Agreements, Grants, and Small Business Innovation Research agreements.

For over 20 years, Jen’s practice has focused on advising clients in the pharmaceutical, biologics and medical device industry on all aspects of both commercial and non-commercial agreements with various government agencies including:

  • the Department of Veterans Affairs (VA);
  • the Department of Health and Human Services (HHS), including the Biomedical Advanced Research and Development Authority (BARDA), the National Institutes of Health (NIH), and the Centers for Disease Control (CDC);
  • the Department of Defense (DoD), including the Defense Threat Reduction Agency (DTRA), the Defense Advanced Research Projects Agency (DARPA), and the Joint Program Executive Office for Chemical Biological Defense (JPEO-CBRN); and
  • the U.S. Agency for International Development (USAID).

She regularly advises on the development, production, and supply to the government of vaccines and other medical countermeasures addressing threats such as COVID-19, Ebola, Zika, MERS-CoV, Smallpox, seasonal and pandemic influenza, tropical diseases, botulinum toxin, nerve agents, and radiation events. In addition, for commercial drugs, biologics, and medical devices, Jen advises on Federal Supply Schedule contracts, including the complex pricing requirements imposed on products under the Veterans Health Care Act, as well as on the obligations imposed by participation in the 340B Drug Pricing program.

Jen also has significant experience in domestic sourcing compliance under the Buy American Act (BAA) and the Trade Agreements Act (TAA), including regulatory analysis and comments, certifications, investigations, and disclosures (including under the Acetris decision and Biden Administration Executive Orders). She also advises on prevailing wage requirements, including those imposed through the Davis-Bacon Act and the Service Contract Labor Standards.

Photo of Susan B. Cassidy Susan B. Cassidy

Susan is co-chair of the firm’s Aerospace and Defense Industry Group and is a partner in the firm’s Government Contracts and Cybersecurity Practice Groups. She previously served as in-house counsel for two major defense contractors and advises a broad range of government contractors…

Susan is co-chair of the firm’s Aerospace and Defense Industry Group and is a partner in the firm’s Government Contracts and Cybersecurity Practice Groups. She previously served as in-house counsel for two major defense contractors and advises a broad range of government contractors on compliance with FAR and DFARS requirements, with a special expertise in supply chain and cybersecurity requirements. She has an active investigations practice and advises contractors when faced with cyber incidents involving government information. Susan relies on her expertise and experience with the Defense Department and the Intelligence Community to help her clients navigate the complex regulatory intersection of cybersecurity, national security, and government contracts. She is Chambers rated in both Government Contracts and Government Contracts Cybersecurity. In 2023, Chambers USA quoted sources stating that “Susan’s in-house experience coupled with her deep understanding of the regulatory requirements is the perfect balance to navigate legal and commercial matters.”

Her clients range from new entrants into the federal procurement market to well established defense contractors and she provides compliance advices across a broad spectrum of procurement issues. Susan consistently remains at the forefront of legislative and regulatory changes in the procurement area, and in 2018, the National Law Review selected her as a “Go-to Thought Leader” on the topic of Cybersecurity for Government Contractors.

In her work with global, national, and start-up contractors, Susan advises companies on all aspects of government supply chain issues including:

  • Government cybersecurity requirements, including the Cybersecurity Maturity Model Certification (CMMC), DFARS 7012, and NIST SP 800-171 requirements,
  • Evolving sourcing issues such as Section 889, counterfeit part requirements, Section 5949 and limitations on sourcing from China
  • Federal Acquisition Security Council (FASC) regulations and product exclusions,
  • Controlled unclassified information (CUI) obligations, and
  • M&A government cybersecurity due diligence.

Susan has an active internal investigations practice that assists clients when allegations of non-compliance arise with procurement requirements, such as in the following areas:

  • Procurement fraud and FAR mandatory disclosure requirements,
  • Cyber incidents and data spills involving sensitive government information,
  • Allegations of violations of national security requirements, and
  • Compliance with MIL-SPEC requirements, the Qualified Products List, and other sourcing obligations.

In addition to her counseling and investigatory practice, Susan has considerable litigation experience and has represented clients in bid protests, prime-subcontractor disputes, Administrative Procedure Act cases, and product liability litigation before federal courts, state courts, and administrative agencies.

Susan is a former Public Contract Law Procurement Division Co-Chair, former Co-Chair and current Vice-Chair of the ABA PCL Cybersecurity, Privacy and Emerging Technology Committee.

Prior to joining Covington, Susan served as in-house senior counsel at Northrop Grumman Corporation and Motorola Incorporated.

Photo of Michael Wagner Michael Wagner

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and…

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and enforcement actions.

Mike regularly represents contractors in federal and state compliance and enforcement matters relating to a range of procurement laws and regulations. He has particular experience handling investigations and litigation brought under the civil False Claims Act, and he routinely counsels government contractors on mandatory and voluntary disclosure considerations under the FAR, DFARS, and related regulatory regimes. He also represents contractors in high-stakes suspension and debarment matters at the federal and state levels, and he has served as Co-Chair of the ABA Suspension & Debarment Committee and is principal editor of the American Bar Association’s Practitioner’s Guide to Suspension & Debarment (4th ed.) (2018).

Mike also has extensive experience representing companies pursuing and negotiating grants, cooperative agreements, and Other Transaction Authority agreements (OTAs). In this regard, he has particular familiarity with the semiconductor and clean energy industries, and he has devoted substantial time in recent years to advising clients on strategic considerations for pursuing opportunities under the CHIPS Act, Inflation Reduction Act, and Bipartisan Infrastructure Law.

In his counseling practice, Mike regularly advises government contractors and suppliers on best practices for managing the rapidly-evolving array of cybersecurity and supply chain security rules and requirements. In particular, he helps companies assess and navigate domestic preference and country-of-origin requirements under the Buy American Act (BAA), Trade Agreements Act (TAA), Berry Amendment, and DOD Specialty Metals regulation. He also assists clients in managing product and information security considerations related to overseas manufacture and development of Information and Communication Technologies & Services (ICTS).

Mike serves on Covington’s Hiring Committee and is Co-Chair of the firm’s Summer Associate Program. He is a frequent writer and speaker on issues relating to procurement fraud and contractor responsibility, and he has served as an adjunct professor at the George Washington University Law School.

Photo of Robert Huffman Robert Huffman

Bob Huffman counsels government contractors on emerging technology issues, including artificial intelligence (AI), cybersecurity, and software supply chain security, that are currently affecting federal and state procurement. His areas of expertise include the Department of Defense (DOD) and other agency acquisition regulations governing…

Bob Huffman counsels government contractors on emerging technology issues, including artificial intelligence (AI), cybersecurity, and software supply chain security, that are currently affecting federal and state procurement. His areas of expertise include the Department of Defense (DOD) and other agency acquisition regulations governing information security and the reporting of cyber incidents, the proposed Cybersecurity Maturity Model Certification (CMMC) program, the requirements for secure software development self-attestations and bills of materials (SBOMs) emanating from the May 2021 Executive Order on Cybersecurity, and the various requirements for responsible AI procurement, safety, and testing currently being implemented under the October 2023 AI Executive Order. 

Bob also represents contractors in False Claims Act (FCA) litigation and investigations involving cybersecurity and other technology compliance issues, as well more traditional government contracting costs, quality, and regulatory compliance issues. These investigations include significant parallel civil/criminal proceedings growing out of the Department of Justice’s Cyber Fraud Initiative. They also include investigations resulting from False Claims Act qui tam lawsuits and other enforcement proceedings. Bob has represented clients in over a dozen FCA qui tam suits.

Bob also regularly counsels clients on government contracting supply chain compliance issues, including those arising under the Buy American Act/Trade Agreements Act and Section 889 of the FY2019 National Defense Authorization Act. In addition, Bob advises government contractors on rules relating to IP, including government patent rights, technical data rights, rights in computer software, and the rules applicable to IP in the acquisition of commercial products, services, and software. He focuses this aspect of his practice on the overlap of these traditional government contracts IP rules with the IP issues associated with the acquisition of AI services and the data needed to train the large learning models on which those services are based. 

Bob writes extensively in the areas of procurement-related AI, cybersecurity, software security, and supply chain regulation. He also teaches a course at Georgetown Law School that focuses on the technology, supply chain, and national security issues associated with energy and climate change.

Photo of Chanda Brown Chanda Brown

Chanda Brown advises clients on complex national security, defense, regulatory compliance and government contract matters, including bid-protests, size protests, internal investigations and the allocation of government rights in patents. For exporters, she provides guidance to clients regarding the export and import of dual…

Chanda Brown advises clients on complex national security, defense, regulatory compliance and government contract matters, including bid-protests, size protests, internal investigations and the allocation of government rights in patents. For exporters, she provides guidance to clients regarding the export and import of dual use and military products under the Export Administration Regulations and the International Traffic in Arms Regulations. Her work has involved responding to federal agency enforcement actions, assisting with export licensing and registrations, drafting export control plans, conducting product self-classifications and voluntary self-disclosures.

In corporate transactions and public company representations, Chanda performs due diligence in connection with large and small government contractors. In transactions involving acquisitions by non-U.S. companies, she has helped clients navigate complex transactions before the Committee on Foreign Investment in the United States (CFIUS).