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Heather Finstuen

Heather Finstuen is a partner in the firm’s CFIUS practice and a co-chair of the Foreign Direct Investment initiative. She represents international and domestic companies in numerous industries in securing the approval of CFIUS and provides counseling on negotiating, implementing, and complying with CFIUS national security agreements. She frequently advises clients on national industrial security regulations and engages with the Defense Counterintelligence and Security Agency (“DCSA”), the Department of Energy, and other cognizant security agencies on topics including the determination and mitigation of foreign ownership, control, or influence (“FOCI”).

Heather has been involved in many complex CFIUS and FOCI matters, including Nexen Inc. in its $15 billion sale to China National Offshore Oil Corporation, GLOBALFOUNDRIES’ $1 billion acquisition of the IBM Microelectronics Division, Micro Focus on transactions including its $8.8 billion acquisition of HPE’s software business and $2.5 billion sale of its SUSE business, CenturyLink’s $2.2 billion sale of its Savvis data center business, Publicis Groupe’s $3.7 billion acquisition of Sapient, numerous matters for BAE Systems, and multiple transactions for The Carlyle Group.

As the Senate approaches the end of its debate on the National Defense Authorization Act for Fiscal Year 2019, provisions of the bill regarding access to and review of information technology code deserve close attention.  These sections, if enacted, would significantly impact Department of Defense contractors and also would affect matters associated with investments subject to review by U.S. national security agencies.

As drafted, the provisions could expose current and prospective contractors to intrusive scrutiny and significant risks.  They lack clarity on key definitions, leaving the precise scope of those risks unclear.  We summarize major issues and concerns below.  We expect these provisions to receive scrutiny during the House-Senate conference on the NDAA over the summer. 
Continue Reading Senate Armed Services Committee Proposes Expansive but Unclear Software Review Provisions

On July 12, 2016, in Coast Professional, Inc. et. al v. United States, No. 2015-5077 (Fed. Cir. July 12, 2016), the U.S. Court of Appeals for the Federal Circuit overturned a Court of Federal Claims (“CoFC”) decision, finding that the CoFC erred in ruling that it did not have bid protest jurisdiction over the award of task orders characterized as “award-term extensions.”   The Federal Circuit’s decision provides clarity on the scope of Tucker Act’s bid protest jurisdiction, and provides a strong defense against Government arguments that attempt to limit that jurisdiction going forward.
Continue Reading Federal Circuit Confirms that Award Term Extension Constitutes New Contract for Purposes of Bid Protest Jurisdiction

Three major agencies—the Department of Defense (“DoD”), NASA, and the General Services Administration (“GSA”)—have published an interim rule that will require contractors to report federal felony convictions and delinquent taxes when responding to solicitations.  The rule implements requirements imposed by the Consolidated and Further Continuing Appropriations Act of 2015, Pub. L. 113-235 (the “CFCAA”) and applies broadly to any procurements with the DoD, NASA, or GSA.  Indeed, the FAR Council declined to exempt procurements for commercial items (including COTS items) or contracts below the simplified acquisition threshold from the reporting requirements, explaining that “[t]ax liability is a serious matter” and that the rule will impose a “minimal burden” on contractors. 
Continue Reading Federal Felony Convictions and Delinquent Taxes Must be Reported Under New FAR Rule

The Court of Federal Claims recently issued an opinion in the long running litigation between Sikorsky Aircraft Corporation (“Sikorsky”) and the United States regarding Sikorsky’s cost accounting practices. In this new decision, the court rejected a government attempt to pursue a new legal theory to challenge Sikorsky’s compliance with the Cost Accounting Standard (“CAS”), which contradicted a legal theory the government had pursued in an earlier round of litigation. During the first round of litigation, the government had claimed that Sikorsky’s accounting practices violated a specific CAS – CAS 418. In the second round, the government demanded payment from Sikorsky on the theory that those same accounting practices were actually compliant and therefore a subsequent change triggered a violation of a different CAS regulation. This new legal theory was inconsistent with the government’s original claim. In rejecting this aggressive tactic, the court indicated its displeasure at the government’s legal arguments, and the decision may help contractors in future attempts to curtail the government’s appetite for aggressive CAS litigation tactics.
Continue Reading In Long-Running CAS Case, the Court of Federal Claims Rejects a Government Attempt to Get Another Bite at the Apple

On January 22, 2015, the U.S. Office of Special Counsel (“OSC”) published a proposed rule that, if adopted, would extend its existing whistleblower regulations beyond government employees to include certain employees of federal contractors, subcontractors, and grantees. This proposed rule change is designed to provide a parallel mechanism for reporting types of government wrongdoing covered by the National Defense Authorization Act of 2013 (“NDAA”), which itself extended federal employee whistleblower protections to certain employees of federal contractors, subcontractors, and grantees.

In proposing the rule, the OSC recognized that the landscape of the federal workplace has changed significantly since Congress first provided whistleblower protections to federal employees in the Civil Service Reform Act of 1978.  “In the modern workforce, employees of contractors, subcontractors, and grantees  often work alongside Federal employees, having similar if not identical duties.  Thus contractors are similarly situated to observe or experience the same type of wrongdoing as are Federal employees.”
Continue Reading Proposed Rule Would Extend OSC Whistleblower Protections to Government Contractors

The Third Circuit recently ruled that a qui tam relator must have “direct knowledge” of the fraud or false statements at issue in order to satisfy the False Claims Act’s (“FCA”) “original source” jurisdictional requirement.  A relator fails to satisfy the direct knowledge requirement where his or her allegations are mere inferences based on the review of agreements and documents, discussions of those documents with others, or conclusions based on industry experience.  The case is U.S. ex rel. Schumann v. Astrazeneca Pharmaceuticals L.P., No. 13-1489 (3rd Cir. Oct. 20, 2014).
Continue Reading Third Circuit Requires Actual Knowledge of Fraudulent Claim to Satisfy FCA’s “Direct” Knowledge Requirement

The Eighth Circuit recently joined the ranks of four other federal circuits allowing whistleblowers to plead False Claims Act (FCA) violations without identifying specific examples of false claims submitted for reimbursement.  In so doing, the Eighth Circuit concluded that the heightened federal pleading standards required for fraud claims are satisfied where a whistleblower can provide