President Trump has issued two new Executive Orders (“EOs”) that seek to reshape federal procurement. The much anticipated “Restoring Common Sense To Federal Procurement” EO (the “FAR Reform EO”) seeks to “create the most agile, effective, and efficient procurement system possible” by revising the Federal Acquisition Regulation (“FAR”)
Continue Reading Trump Administration Issues Two Executive Orders Seeking To Remake Federal Procurement
New Executive Order Targets Reforms to Foreign Military Sales
On April 9th, President Trump signed an Executive Order titled “Reforming Foreign Defense Sales To Improve Speed And Accountability” (“the FMS EO”). The FMS EO directs the Departments of Defense and State to reform the foreign defense sales system with the goal of “simultaneously strengthen[ing] the security capabilities of our allies and invigorat[ing] our own defense industrial base.”
The EO’s policy goals likely will receive bi-partisan support, as both the Biden administration and the first Trump administration oversaw record transfers of U.S. defense articles and services to foreign allies. Indeed, the FMS EO comes just a few months after the Department of State reported that the final year of the Biden administration saw the “highest ever annual total of sales and assistance provided to our allies and partners,” with a total value of $117.9 billion in sales under the Foreign Military Sales (FMS) program, a 45.7% increase from FY 2023. Moreover, many of the policy goals align generally with recommendations the House Foreign Affairs Committee’s TIGER Task Force issued last year.
On the other hand, the FMS EO would reduce Congressional review and export restrictions on the transfer of certain sensitive defense articles, expand the ability of foreign allies to procure defense items directly from U.S. contractors through direct commercial contracts, and place a new emphasis on cost and burden-sharing by allies. These measures are more likely to encounter resistance. Continue Reading New Executive Order Targets Reforms to Foreign Military Sales
ASBCA: Government Can Pursue $151 Million Claim Under CAS 410
In Honeywell International, Inc., the ASBCA declined to dismiss a roughly $151 million claim by DCMA alleging a violation of CAS 410, holding that the government’s allegations were sufficient to state a claim for improper treatment of G&A expenses. The Board’s decision provides guidance on how to interpret CAS 410 — a topic that is often addressed by auditors, but has rarely been the subject of written opinions by the courts or boards of contract appeals.Continue Reading ASBCA: Government Can Pursue $151 Million Claim Under CAS 410
Department of Defense Debarment Enjoined Due to Procedural Missteps
The Eastern District of New York has enjoined a New York contractor’s federal debarment, in a rebuke of agency debarment actions that fail to honor contractors’ procedural rights. On July 8, 2022, part supplier Precision Metals Corporation (“Precision”) was granted a Temporary Restraining Order (“TRO”) vacating and setting aside a Defense Logistics Agency (“DLA”) debarment and enjoining debarment while court proceedings are pending. The decision, which emphasizes two procedural violations, serves as a reminder that an agency’s authority to debar contractors is not unlimited, and that it must strictly adhere to the rights granted contractors before taking action. Each procedural violation, and its practical implications, is discussed below.Continue Reading Department of Defense Debarment Enjoined Due to Procedural Missteps
Federal Debarments and Suspensions Hit Ten Year Low, According to FY 2020 Report
On April 18, 2022, the government released its annual report on federal suspension and debarment activities for FY 2020. The report is published by the Interagency Suspension and Debarment Committee (“ISDC”) to fulfill its obligation annually to update Congress on the status of the government’s suspension and debarment program across all executive agencies. While the facts and figures are somewhat dated, the FY 2020 Report nevertheless provides useful insights into federal suspension debarment trends that are relevant to the government contracting community. Below we highlight the three biggest takeaways from this year’s ISDC report.
Continue Reading Federal Debarments and Suspensions Hit Ten Year Low, According to FY 2020 Report
Covington Primer on Foreign Military Sales and Financing
Given the growing attention in U.S. military assistance to foreign allies and the applicable ground rules, Covington has prepared a primer to understanding the basics of foreign military sales, foreign military financing, and direct commercial sales. Covington features a multi-disciplinary team of government contracts, export controls, anticorruption, and corporate attorneys
Continue Reading Covington Primer on Foreign Military Sales and Financing
COVID-19 Vaccine Mandate Update: Arizona District Court Issues Additional Injunction; Mandate Remains Enjoined Nationwide; OSHA Mandate Withdrawn
As discussed in our previous post, multiple federal courts have issued preliminary injunctions blocking the Biden Administration’s COVID-19 vaccine mandate for employees of federal contractors. On January 27, 2022, the United States District Court of Arizona issued a new and additional injunction barring enforcement of the mandate within the State of Arizona. In so doing, the Arizona court added to the injunctions previously issued by the U.S. District Courts for the Eastern District of Kentucky, Western District of Louisiana, Eastern District of Missouri, Middle District of Florida, and Southern District of Georgia.
The Georgia injunction is the only one of the rulings that applies nationwide. Like the Arizona injunction, the Missouri, Florida, and Kentucky injunctions are limited to specific states (collectively, Kentucky, Ohio, Tennessee, Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, North Dakota, South Dakota, Wyoming, and Florida). The Louisiana injunction is also limited, but its limitations are based on entities rather than geography; it applies to contracts and other agreements between the federal government and the governments of Louisiana, Mississippi, and Indiana. The Biden Administration has appealed these earlier decisions; we expect that an appeal of the Arizona decision to the Ninth Circuit will likewise be forthcoming.
At the same time, the Biden Administration’s other primary COVID-19 initiative for large employers — the vaccination and testing emergency temporary standard issued by the Occupational Safety and Health Administration (the so-called “OSHA Mandate”) — was stayed by the United States Supreme Court on January 13, 2022. In the wake of that decision, OSHA announced on January 25, 2022 that it is withdrawing the enforceable emergency temporary standard.
While the Supreme Court’s decision halted immediate application of the OSHA Mandate, the emergency temporary standard qualifies as a proposed rule for purposes of OSHA’s notice-and-comment rulemaking process under 29 U.S.C. § 655, and OSHA has announced that it will continue to consider the emergency temporary standard pursuant to that process. Accordingly, OSHA could attempt to promulgate a final rule (as opposed to an emergency temporary standard) that addresses vaccines or testing requirements.
The rest of this post consists of (1) an overview of the Arizona decision regarding the federal contractor vaccine mandate; and (2) an update on the status of the other challenges to the federal contractor vaccine mandate, including the Kentucky, Louisiana, Missouri, Florida, and Georgia litigations.Continue Reading COVID-19 Vaccine Mandate Update: Arizona District Court Issues Additional Injunction; Mandate Remains Enjoined Nationwide; OSHA Mandate Withdrawn
DOJ Records Historic False Claims Act Recoveries in FY 2021
On February 1, 2022, the Department of Justice (“DOJ”) released its annual report summarizing False Claims Act (“FCA”) enforcement activity in FY 2021. The report confirmed what many practitioners already suspected: FY 2021 was another banner year in FCA enforcement. DOJ’s annual judgments and settlements exceeded $5.6 billion, making FY 2021 the second largest annual recovery ever (and the largest since 2014). But beyond this top line number, a closer analysis of the figures in DOJ’s report offers additional insight on strategies for preventing and mitigating costly FCA exposure.
Continue Reading DOJ Records Historic False Claims Act Recoveries in FY 2021
Contractor COVID-19 Vaccine Mandate Blocked Nationwide – UPDATE
Several federal courts have issued preliminary injunctions blocking the Biden Administration from enforcing its federal contractor COVID-19 vaccine mandate. As discussed in our previous posts, President Biden issued Executive Order 14042 mandating that employees of federal contractors and subcontractors be vaccinated against COVID-19 and take various other workplace safety measures. Executive Order 14042 relies on the president’s authority under the U.S. Constitution and the Federal Property and Administrative Services Act (“FPASA”) to effectuate this policy. Prior to issuance of the injunctions, contractors were required to have covered employees fully vaccinated by January 18, 2022.
Continue Reading Contractor COVID-19 Vaccine Mandate Blocked Nationwide – UPDATE
Are Federal Contractors Immunized From Vaccination Litigation? Mitigating The Risk Of Civil Liabilities Arising Out Of The COVID-19 Vaccine Mandate
Federal government contractors face many uncertainties as they implement President Biden’s COVID-19 vaccine mandate. This includes the distinct possibility of civil lawsuits arising out of their implementation of the mandate, including potential allegations of invasion of privacy, wrongful termination, lost wages, discrimination, personal injury or other common law claims or statutory violations. At least one such lawsuit already has been filed. In that suit, dozens of aggrieved employees allege that the contractor’s vaccine mandate violates state law, and they seek an injunction and other relief. Other lawsuits are sure to follow.
But there is good news for contractors: Established legal doctrines should provide contractors some degree of protection—and perhaps complete immunity—against such lawsuits. In addition to the statutory protections afforded to contractors under the PREP Act, contractors may be protected from civil liability based on federal-law-based defenses that have been recognized and applied in analogous government contracting settings. In the coming weeks, as contractors navigate the many challenges associated with the vaccine mandate, they should carefully consider the risk of civil litigation, and, in order to minimize potential exposure in such lawsuits, proactively implement practices that maximize the likelihood that these doctrines and defenses will be applicable, as discussed below.Continue Reading Are Federal Contractors Immunized From Vaccination Litigation? Mitigating The Risk Of Civil Liabilities Arising Out Of The COVID-19 Vaccine Mandate