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A recent decision from the Armed Services Board of Contract Appeals (ASBCA) serves as an important reminder that a contractor’s timely notification to the contracting officer (CO) of its intent to appeal a CO’s final decision will satisfy the Board’s 90-day deadline for filing appeals under the Contract Disputes Act (CDA). Although the facts of Afghan Active Group (AAG), ASBCA No. 6037, 2016 WL 1715461 (Apr. 14, 2016) are somewhat unusual, the decision illustrates the Board’s willingness to elevate substance over form when it comes to enforcing its jurisdictional timeliness requirements.

Continue Reading Contractor’s Timely Notice to the CO of an ‘Intent to Appeal’ is Good Enough for the ASBCA

In an apparent reaction to recent efforts by the Department of Defense to obtain authority to approve mergers in the defense industry on national security grounds, the Department of Justice and the Federal Trade Commission today issued a Joint Statement explaining the standard of review that the antitrust agencies use when evaluating proposed transactions in the defense industry.  In this Joint Statement, the antitrust agencies assert that by protecting competition, they already are protecting national security by maintaining multiple sources of products and services and the most innovative technologies to support our military personnel, all at competitive prices.

Continue Reading FTC and DoJ Question DoD’s Proposed National Security Trump Card

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 DoD is poised to overhaul the regulatory framework that applies to IR&D performed by defense contractors.  Indeed, just last week, DoD issued yet another proposed rule that would change the way proposed IR&D projects are evaluated in DoD procurements.
Continue Reading Defense Contractors Must Share (Even More) Information About Their IR&D Projects Before DoD Will Reimburse IR&D Costs

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, ordered to remedy a whistleblower reprisal, suspended or debarred, terminated for default, or in which the contractor paid to settle a proceeding that could have led to any of these outcomes.

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

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, as DoD seems poised to frustrate yet another incentive for pursuing defense-related IR&D.

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

Executive Summary

Though largely ignored by recent commentary, the Supreme Court’s recent Campbell-Ewald opinion significantly impacts government contractors’ ability to use the shield of derivative sovereign immunity (“Yearsley immunity”). First, Campbell-Ewald holds that derivative sovereign immunity may shield any government contractor from liability, not just contractors engaged in public works. Second, the Supreme

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 prime contractors.

The proposed rule stems from the Small Business Jobs Act of 2010, which, as noted in a previous post, called for regulations governing prime contractors’ compliance with their small business subcontracting plans.  Among the Act’s requirements was that prime contractors notify their contracting officer if they pay a “reduced price” or make an “untimely payment” to a small business subcontractor.  Although the SBA adopted regulations implementing this statutory directive in July 2013, the Far Council is taking on the task for the first time.

Continue Reading FAR Council Adds New Layer to Small Business Subcontracting Rules

Last week, the Department of Defense (“DoD”) quietly withdrew its ill-received proposed rule on the evaluation of price reasonableness in commercial items acquisitions.  Issued on August 3, 2015, the Proposed Rule purported to provide guidance for evaluating the reasonableness of prices using data other than certified cost or pricing data.  As we previously reported, it fell short of this goal and, instead, increased confusion in the determination of price reasonableness for commercial goods that have been “offered for sale” but not sold.  It also adopted open-ended data provisions that arguably permit the agency to request almost unlimited information to substantiate the reasonableness of prices.
Continue Reading DoD Retreats on Evaluation of Price Reasonableness

On November 6, 2015, the Department of Veterans Affairs (“VA”) issued a proposed rule (the “Proposed Rule”) to clarify the byzantine verification process for veteran-owned small businesses (“VOSB”) and veteran-owned service-disabled veteran-owned small businesses (“SDVOSB”)1 who want to participate in the VA’s Veterans First Contracting Program.  VA Veteran-Owned Small Business Verification Guidelines, Proposed Rule, 80 Fed. Reg. 68,795 (to be codified at 38 C.F.R. Part 74). The Proposed Rule revises a 2013 advanced notice of proposed rulemaking and considers 39 public comments received in response to the prior notice.  Comments on the latest proposed rule are due on or before January 5, 2016.

Under the Veterans First Contracting Program, the VA offers set-asides and sole source opportunities to certified VOSB and SDVOSB firms.  Unfortunately, the program has struggled to gain a foothold in the government procurement landscape because its VA-administered regulations are confusing and the set-aside opportunities are limited to VA procurements.  At the same time, the Government Accountability Office and the VA’s Office of the Inspector General have targeted the program for pervasive fraud, and stakeholders have criticized the verification program as unnecessarily rigorous when compared against other socio-economic programs administered by the Small Business Administration (“SBA”).

As a result, through its Proposed Rule, the VA “seeks to find an appropriate balance between preventing fraud . . . and providing a process that would make it easier for more VOSBs to become verified.”  The VA attempts to strike this balance by significantly amending the VOSB ownership regulations to make them easier to understand, and bringing many of the requirements in line with SBA interpretations of similar requirements under similar programs.

Continue Reading VA Proposes to Make VOSB Verification Easier Under the Veterans First Contracting Program

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 district court order awarding two relators a percentage of the Government’s settlement of an FCA qui tam suit in which it had intervened, holding that when the government intervenes in an FCA action brought by a relator, and then settles both the claim brought by the relator and a different claim that does not overlap factually with the relator’s claim, the relator is entitled only to a share of the settlement of the claim that he brought.  The Court remanded the case to the district court to analyze whether there was factual overlap between the claims settled by the Government and the claims brought by the relators.
Continue Reading No Money for Nothing — Eighth Circuit Limits Relators’ Ability to Recover a Share of Government Settlements of Qui Tam Suits