Follow: Email

Last month, the Biden administration released its report on the results of its 100-day review of U.S. supply chains for critical products:  “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth” (the “Report”).  Alongside the Report’s slate of policy recommendations, the Biden administration also announced immediate actions to strengthen supply chains and stimulate domestic competitiveness.

The Report is the result of President Biden’s February 24 “Executive Order on America’s Supply Chains” (the “Order”), which directed federal departments and agencies to conduct a review of supply chain risks in four critical product areas,[1] including pharmaceuticals and active pharmaceutical ingredients (“APIs”).  The Report and its recommendations further the Biden administration’s broader goal of rebuilding the U.S. industrial base, reducing reliance on foreign competitors, and bolstering national and economic security.

The U.S. Department of Health and Human Services (“HHS”) led the review of the supply chain for pharmaceuticals and APIs, which focused primarily on drugs, in particular small-molecule drugs and therapeutic biological products.  The Report makes a number of recommendations discussed herein that have the potential to impact pharmaceutical companies’ business plans and generate significant opportunities, though many such recommendations are long-term and will require dedicated funding so the actual impact of the Report’s suggestions remains to be seen.
Continue Reading Biden Administration 100-Day Supply Chain Assessment: Insights for Pharmaceutical Manufacturers

The American Rescue Plan, signed into law last month, includes $1.9 trillion in economic stimulus, healthcare, and related funding.  And just last week the Biden administration released an infrastructure proposal, the American Jobs Plan, that includes $2.3 trillion in transportation, connectivity, power, and other critical infrastructure investments.

Contractors are right to view these plans as massive opportunities — but should be cognizant of the regulatory strings that often attach to government spending.  In general, these can include Federal Acquisition Regulation (FAR) and agency-specific FAR supplements for federal procurements, as well as the nonprocurement uniform requirements (2 C.F.R. Part 200) and related agency-specific regulations that attach to Federal grant funds even when disbursed by state or local entities.

Now, some Congressional members are seeking to add new restrictions that would significantly overhaul the existing domestic preference regime for Federal procurements — mere weeks after the promulgation of new Buy American regulations and the release of a new Executive Order to further tighten the application of these rules.


Continue Reading U.S. Senators Propose Trade-Pact Waivers Amidst Focus on Domestic Preference Laws

On September 22, 2020, President Trump issued the Executive Order on Combating Race and Sex Stereotyping (“EO”) establishing requirements aimed at “promoting unity in the Federal workforce,” by prohibiting workplace training on “divisive concepts,” including “race or sex stereotyping” and “race or sex scapegoating” as newly-defined in the EO.  The EO is broadly applicable to executive departments and agencies, Uniformed Services, Federal contractors, and Federal grant recipients.  The EO expands on a letter issued in early September by the Director of the Office of Management and Budget (“OMB”) that directed all agencies to begin to identify contracts or other agency spending on trainings that include “critical race theory,” “white privilege,” or “un-American propaganda,” in an effort to ensure “fair and equal treatment of all individuals in the United States.”

Following the EO, on September 28, 2020, OMB issued a Memorandum for the Heads of Executive Departments and Agencies (the “Memo”) with additional guidance aimed at assisting agencies in identifying diversity and inclusion trainings for agency employees that may be subject to the EO.  The Memo suggests that agencies conduct keyword searches of training materials for specific terms, such as “intersectionality,” “systemic racism,” and “unconscious bias.”  Although the Memo primarily explains the terms of the EO, it also provides additional insight concerning the breadth of agency trainings that may ultimately be considered to violate the terms of the EO, which are described below.

Although the EO is likely to be subject to legal challenge (as more fully discussed below), federal contractors, including subcontractors and vendors, could be subject to the compliance requirements outlined below as soon as November 21, 2020.
Continue Reading President Trump Issues Executive Order Prohibiting “Divisive Concepts” in Federal Contractor Trainings

Last week, President Trump issued an executive order aimed at encouraging the expansion American manufacturing of essential medical products — Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States (August 6, 2020) (the “Order”).  The Order sets forth an ambitious plan requiring extensive agency action on a tight timeline that suggests a significant impact.  Closer examination of the Order raises significant questions about the practicalities of implementation and the realistic impact of the Order once the substantial stated exceptions are taken into account.

The List

The heart of the Order is a list of Essential Medicines, Medical Countermeasures (“MCMs”), and Critical Inputs to which the Order’s requirements apply — but the key components of this list do not yet exist.  Instead, the Order directs the Food and Drug Administration (“FDA”) to produce the list within 90 days and to include on the list Essential Medicines, MCMs, and Critical Inputs “that are medically necessary to have available at all times in an amount adequate to serve patient needs and in the appropriate dosage forms.”

The Order provides the following definitions that give some insight into what may be on the FDA’s eventual list:
Continue Reading Trump Administration Increases Uncertainty for Pharmaceutical Manufacturing

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 Look Before You Release — ASBCA Enforces Release of Claims to Contractor’s Detriment

Two notices recently published in the Federal Register indicate the Federal Emergency Management Agency (“FEMA”) intends to exercise Defense Production Act (“DPA”) authority in novel ways during the current coronavirus pandemic.

On May 12th, FEMA announced that it plans to invoke DPA authority which permits the President to consult with representatives of industry, business, financing, agriculture, labor, and other interests in order to enter into voluntary agreements or plans of action to help provide for the national defense.

The following day, FEMA published the Emergency Management Priorities and Allocations System (“EMPAS”) regulations governing FEMA’s use of DPA priorities and allocations authority — which, as we’ve previously covered on several occasions, permit the executive branch to require private companies to prioritize its orders and allocate resources in the private sector as needed to promote the national defense.  FEMA included a new concept of third-party rated orders in its version of DPA regulations.
Continue Reading FEMA Continues to Push Defense Production Act Authority On Several Fronts

The Department of Health and Human Services published a notice on March 30, 2020 — effective March 25, 2020 — designating certain COVID-19-related personal protective equipment (“PPE”) and materials as “scarce” or “threatened” materials subject to the Defense Production Act’s (“DPA”) anti-hoarding provisions.  As a result of this notice, the DPA now prohibits the accumulation of these materials in excess of reasonable demands of business, personal, or home consumption.  The notice also results in a prohibition of the accumulation of these materials for the purpose of resale at prices in excess of the prevailing market rate.

Continue Reading Defense Production Act Anti-Hoarding Provisions Invoked for Coronavirus

Following up on our post earlier this week giving a general overview of the Defense Production Act of 1950 (“DPA”), 50 U.S.C. §§4501 et seq., this post comments on President Trump’s March 18, 2020 Executive Order on Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19 (the “COVID-19 E.O.”) and provides some key considerations that companies should keep in mind if they are concerned about receiving prioritized or rated contracts or allocation orders or directives under the DPA.
Continue Reading The Defense Production Act and the Coronavirus Executive Order: Key Considerations

As a followup to our recent post on the implications of the PREP Act for government contractors working to respond to the COVID-19 outbreak, this post will provide an overview of the Defense Production Act—including its key powers that the federal Government might invoke to counter the pandemic.
Continue Reading A Coronavirus Contractor’s Guide to the Defense Production Act

We’ve covered several topics already this week on the U.S. Government’s varied responses to the COVID-19 outbreak and how these responses will affect contractors that do business with the government, including BARDA’s EZ-BAA for COVID-19 diagnostics, mission-essential services during the outbreak, and how excusable delay provisions may help federal contractors affected by the outbreak.  But one area that has yet to receive in-depth discussion is the federal government’s mechanisms for addressing liability concerns raised by the use and distribution of countermeasures to the virus.  After all, while contractors are no doubt responding with appropriate speed and diligence in developing and deploying various COVID-19 countermeasures, no contractor wants to be the subject of a product liability, warranty, or negligence lawsuit later down the road.

Thankfully, Congress anticipated this concern and addressed it in 2005 by passing the Public Readiness and Emergency Preparedness Act (“PREP Act”), codified at 42 U.S.C. § 247d-6d.  Since enactment, the PREP Act has been used to issue declarations covering various countermeasures, including therapeutics, diagnostics, devices, vaccines, and constituent materials for pandemic influenza, acute radiation syndrome, smallpox, Botulism, anthrax, Zika, nerve agents, certain insecticides, and Ebola.  And earlier this week, the Secretary of the U.S. Department of Health and Human Services (the “Secretary”) issued a declaration pursuant to the PREP Act specifically for COVID-19 countermeasures.

This post will cover the PREP Act generally before discussing the implications of the COVID-19 declaration.
Continue Reading A Coronavirus Contractor’s Guide to the PREP Act