Covington Team

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Defense Contractors Must Share (Even More) Information About Their IR&D Projects Before DoD Will Reimburse IR&D Costs

The Department of Defense (DoD) will require contractors to disclose more information about their Independent Research & Development (IR&D) projects before the Government will reimburse IR&D costs, the Pentagon said in a proposed rule issued earlier this week.  The proposed rule, which was previewed in an August 2015 white paper, is the latest sign that … Continue Reading

FAR Council Proposes to Disallow Costs of Congressional Investigations That Result From Adverse Legal and Administrative Proceedings

On February 17, 2016, the FAR Council proposed a rule that would add a new category of unallowable costs to FAR Part 31 — costs of responding to an inquiry by Congress, if that inquiry results from a judicial or administrative proceeding in which the contractor is found criminally liable, found liable for civil fraud, … Continue Reading

DoD To Reconsider How It Evaluates Proposed IR&D Projects In Awarding Government Contracts

The Department of Defense (DoD) is considering a proposed rule that would prevent defense contractors from promising future Independent Research & Development (IR&D) investments as a way to gain a competitive price advantage in DoD procurements.  Although DoD’s rulemaking is in its early stages, defense contractors with substantial IR&D programs should monitor these developments closely, … Continue Reading

FAR Council Adds New Layer to Small Business Subcontracting Rules

On January 20, 2016, the FAR Council published a proposed rule calling for changes to FAR Parts 19 and 52 that address payments to small business subcontractors.  The proposed changes, which are intended to implement regulations adopted by the Small Business Administration (SBA) in 2013, will expand the range of small business-related obligations imposed on … Continue Reading

No Money for Nothing — Eighth Circuit Limits Relators’ Ability to Recover a Share of Government Settlements of Qui Tam Suits

Following an 8-2 en banc decision issued by the United States Court of Appeals for the Eighth Circuit earlier this month, potential relators may think twice before bringing their False Claims Act (“FCA”) qui tam suits in the Eighth Circuit.  In Rille v. PricewaterhouseCoopers LLP, No. 11-3514 (8th Cir. Oct. 5, 2015), the Court vacated a … Continue Reading

No Cost Contract Award is No Problem According to GAO

In a procurement that will result in the award of a fixed-price contract, contractors have the choice to price their offers below their expected costs. This approach can provide a substantial competitive advantage when a contractor believes the tangential benefits of a contract award will exceed the excess costs of performance. But how far below … Continue Reading

National Security M&A Trump Card for DoD?

The Under Secretary of Defense for Acquisition, Technology, & Logistics, Frank Kendall, made seismic remarks last week announcing that the U.S. Department of Defense (DoD) will seek independent authority from Congress to approve or disapprove M&A transactions in the defense industrial base for national security reasons, creating potential shock waves among the companies in that … Continue Reading

DoD IR&D Projects May Not Be So “Independent” For Long

Last week, the Department of Defense (DoD) issued a white paper announcing that, beginning in FY2017, it will require contractors to notify DoD before undertaking any new Independent Research & Development (IR&D) projects. Contractors also will be required to inform DoD of “the results from these investments.” The white paper acknowledges that these requirements are a departure … Continue Reading

Updated DoD IG Guidance Signals New Enforcement Emphasis for DCAA Auditors

The Department of Defense Office of Inspector General (“DoD IG”) appears poised to place new emphasis on the pursuit of fraud cases in certain key enforcement areas, at least according to updated agency guidance recently published online. Earlier this month, the DoD IG quietly revised its “Auditor Fraud Resources” page, intended to serve as guidance … Continue Reading

COFC: Contractor Stuck With Bill For Substantially Higher Than Expected Costs Under Firm-Fixed Price Requirements Contract

A recent Court of Federal Claims decision serves as a reminder to contractors of the perils of firm-fixed-price contracts in unpredictable environments. The case, Agility Defense & Government Services, Inc. v. United States, involved an “unusually high-risk” firm-fixed-price requirements contract between Agility Defense & Government Services (“Agility”) and the Defense Reutilization Management Services (“DRMS”).  Under … Continue Reading

Contractors (Respectfully) Request that the President Stop Issuing Executive Orders Focused on Contractors

“[W]e respectfully request that no further presidential directives primarily focused on government contractors be issued for the foreseeable future,” wrote four government contractor associations in a letter to the White House dated August 3, 2015. The letter was released publicly on Tuesday, August 11, 2015, and signed by representatives of the Aerospace Industries Association, the … Continue Reading

DoD Issues Three Cloud Computing and Security Documents for Public Comment

On July 24, 2015, the Defense Information Security Agency (“DISA”) issued three draft documents (available here for download) concerning the adoption of secure cloud computing systems by the Department of Defense (“DoD”).  DISA is tasked with developing DoD’s security requirements guides for cybersecurity policies, standards, architectures, security controls, and validation procedures.  Here, the just-released, draft … Continue Reading

New Zealand to Join WTO Government Procurement Agreement, Will Become a “Designated Country” Under the TAA

Effective August 12, 2015, New Zealand will become the 45th country to join the World Trade Organization’s (“WTO”) Government Procurement Agreement (“GPA”).  As we have previously discussed, this plurilateral agreement promotes open, fair, and transparent competition in the government procurement markets of participating countries.  Importantly, the GPA requires member countries to treat suppliers of goods … Continue Reading

D.C. Circuit Creates Circuit Split Regarding Jurisdictional Nature of the False Claims Act’s First-to-File Rule

In the recently decided U.S. ex rel. Heath v. AT&T Inc., No. 14-7094 (June 23, 2015), the D.C. Circuit rejected the general consensus of the circuit courts and held that the False Claims Act’s (“FCA”) first-to-file rule is not jurisdictional.  This decisions creates a circuit split between the D.C. Circuit and the First, Fourth, Fifth, … Continue Reading

Supreme Court grants certiorari in VA procurement case

Last week the Supreme Court granted certiorari to hear arguments in Kingdomware Technologies, Inc. v. United States, Docket Number 14-916, an ongoing dispute over whether the Veterans Benefits, Health Care, and Information Technology Act (“the Act”), 38 U.S.C. § 8127, requires the Department of Veterans Affairs’ (“VA”) to set aside all of its procurements for … Continue Reading

CBCA Takes Pragmatic View When Finding Jurisdiction Over A Sponsored-Subcontractor CDA Appeal

In Cooley Constructors, Inc. v. GSA, CBCA No. 3905 (June 8, 2005), the Civilian Board of Contract Appeals (CBCA) found that the substance of an appeal – not the form – is the prevailing consideration when analyzing whether the CBCA has jurisdiction to hear a sponsored-subcontractor appeal under the Contract Disputes Act (CDA). Consistent with … Continue Reading

An Acceptable Proposal: Set Appropriately High, Clear Standards for DoD’s Auditors and LPTA Competitions

On April 30, 2015, the House Armed Services Committee passed H.R. 1735, the National Defense Authorization Act for Fiscal Year (“FY”) 2016, with an amendment (Log #325rl) that could shape how the Department of Defense (“DoD”) acquires audit and audit readiness services for its Financial Improvement and Audit Readiness (“FIAR”) Plan. Under the FIAR Plan, … Continue Reading

DLA Energy Plans to Make Utility Privatizations More Effective and Streamlined

Last week the Defense Logistics Agency (DLA) Energy issued a statement on DLA’s website about its plan to “increase the productivity, efficiency and effectiveness of [the] Air Force’s utility services contracts” – a plan that dovetails with the Department of Defense’s (DOD) Better Buying Power 3.0 initiative (BBP 3.0).  This should be good news for utility … Continue Reading

College’s Falsification of Grades and Attendance Records May Trigger FCA Liability

On Wednesday, April 29, the Eighth Circuit issued an opinion holding that evidence of a for-profit college’s falsification of grades and attendance records may support a claim that it “fraudulently induced the Department of Education [“DOE”] to provide [it] funds,” and was thus liable under the False Claims Act (“FCA”).  Specifically, the claim alleged that, … Continue Reading

Recent Application of “International Agreement” Exception Raises Questions Regarding Bid Protest Challenges to Foreign Military Sales

A recent opinion by the U.S. Court of Federal Claims (the “Court”)—Hyperion, Inc. v. United States, No. 14-870C, — Fed. Cl. — (Mar. 18, 2015)—is noteworthy for two reasons. First, it illustrates the “international agreement” exception to the Competition in Contracting Act (“CICA”). This exception permits the U.S. Government to award a contract to a … Continue Reading

Agency’s Continued Evaluation of Bids Does Not Violate CICA Stay

In a decision earlier this month, the Court of Federal Claims (“COFC”) found that an agency’s continued evaluation of bids during the pendency of a stay under the Competition in Contracting Act (“CICA”) neither violates CICA nor constitutes “a de facto override” of the stay.  The case is Caddell Construction Co. v. United States, Nos. … Continue Reading

GAO Sustains Protest Based On Improper Actions Of Acquisition Services Contractor

In an unusual case, the Government Accountability Office sustained a protest alleging that an acquisition services contractor had acted unilaterally to prevent an offeror from participating in a Department of State competition.  The decision serves as a reminder that procuring agencies bear responsibility for the actions of acquisition services contractors.… Continue Reading

GAO Upholds Restriction on Using Consultants to Develop a Proposed Technical Approach

The U.S. Government Accountability Office (GAO) recently denied a protest challenging as unduly restrictive an express prohibition on the use of consultants to develop a proposed technical approach. The GAO concluded that such a prohibition is similar to an agency’s decision when evaluating proposals to only consider the experience and past performance of an offeror. This conclusion, … Continue Reading

Another Proposal from GSA: a Class Deviation for Commercial Agreements

March has been a busy month for the GSA in its efforts to implement what it has touted as a “new vision for Federal purchasing.” On March 5, 2014, GSA announced a proposed rule to reform pricing practices and contractor reporting requirements under multiple award schedule contracts. In its latest move, on March 20, 2015, … Continue Reading
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