Section 804 of the House-enacted version of the National Defense Authorization Act for Fiscal Year 2024 would establish a “loser pays” pilot program to require contractors to reimburse the Department of Defense for costs incurred in “processing” bid protests that are ultimately denied by the Government Accountability Office. The accompanying House Armed Services Committee report explains the provision’s intent as “curtailing wasteful contract disputes.” Continue Reading Should Bid Protest Losers Pay?
Nooree is a Partner in Covington's Government Contracts practice. He represents government contractors in all aspects of the procurement process and focuses his practice on the regulatory aspects of M&A activity as well as foreign military sales and other international contracting matters.
On June 13, 2023, the Department of Defense announced that the Secretary of Defense approved recommendations for strengthening the Foreign Military Sales program and instructed FMS-implementing agencies to move forward with these recommendations. It remains to be seen how the DoD agencies will implement the recommendations, and there is a possibility that legislative action will impact FMS reform and supplement or supersede these recommendations.
Last year, the Pentagon formed a Tiger Team to evaluate the FMS program and consider potential improvements. As part of that process, the Tiger Team solicited industry input in the form of a November 2022 report compiled by the Aerospace Industries Association, the Professional Services Council, and NDIA, and a follow-on set of seven industry recommendations released in February of this year. Last month, the Tiger Team released (and the DoD adopted) its own set of six recommendations which largely mirror the broad goals – if not the specific action items – set forth in the industry recommendations. Continue Reading The Department of Defense Targets FMS Program Enhancements
On May 19, 2023, the National Institutes of Health (“NIH”) issued notice that it would be updating its requirements for consortium/subaward agreements on NIH-funded grants. This update, which will be effective October 1, 2023, will bring NIH’s subaward and consortium requirements in line with the Office of Management and Budget Guidance set forth in Title 2 and push NIH grant recipients and subrecipients towards a higher degree of formality in their agreements. Failure to formalize these relationships may endanger eligibility for NIH funding. Continue Reading Show Me the Documentation: NIH Pushes Grantees to Formalize Subaward / Consortium Agreements
On January 25, 2023, the Defense Security Cooperation Agency (DSCA) announced the U.S. arms transfer figures for FY 2022, showing that U.S. defense sales to foreign militaries bounced back after two years of decline. Arms transfers through the Foreign Military Sales (FMS) program increased year-over-year by 49% up to a total of $51.9 billion, and Direct Commercial Sales (DCS) transactions increased by the same percentage up to $153.7 billion.
These enormous single-year jumps in arms transfers reverse declining sales during the two preceding fiscal years, and arms transfers have now returned to nearly match FY 2019 levels. Unsurprisingly, Russia’s unprovoked invasion of Ukraine was a major driver, as Ukraine’s FMS transactions increased more than fivefold, and several European countries in close proximity to the conflict significantly increased their FMS purchases:Continue Reading U.S. Foreign Military Sales Bounce Back
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 with experience in foreign military…
On December 22, 2021, the Defense Security Cooperation Agency (DSCA) announced the Fiscal Year 2021 transaction figures for the Foreign Military Sales (FMS) Program, reporting $34.8 billion in total transaction value. FMS declined for the second consecutive year, down 31 percent from $50.8 billion dollars in transactions in FY 2020. The 2021 figure represents the…
This is the fifth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity”, issued by President Biden on May 12, 2021 (the “Cyber EO”). The first blog summarized the Cyber EO’s key provisions and timelines, and the second, third, and fourth blogs described the actions taken by various federal government agencies to implement the EO during June, July, and August 2021, respectively. This blog summarizes key actions taken to implement the Cyber EO during September 2021.
I. Actions Taken During September 2021 to Modernize Federal Government Cybersecurity
The Office of Management and Budget (OMB) publically released a draft zero trust architecture strategy for federal agencies on September 9, 2021. On that same day, the Cybersecurity and Infrastructure Agency (CISA) issued two draft documents designed to further OMB’s zero trust strategy: the Zero Trust Maturity Model and the Cloud Security Technical Reference Architecture. Each of these documents was required by Section 3 of the Cyber EO to modernize and standardize federal government agency approaches to cybersecurity.Continue Reading September 2021 Developments Under President Biden’s Cybersecurity Executive Order
On April 27, 2021, President Biden signed an Executive Order entitled “Increasing the Minimum Wage for Federal Contractors” that will raise the hourly minimum wage for federal contractors to $15.00 effective January 30, 2022. This Executive Order builds on Executive Order 13658 (“Establishing a Minimum Wage for Contractors”), issued by President Obama in 2014, which first implemented an hourly minimum wage of $10.10 for covered federal contractors.[i]
Continue Reading Government Contractors Should Prepare Now for the $15 Per Hour Minimum Wage
As federal agencies adjust their worksites to the realities of the COVID-19 pandemic, these changes will likely have a direct impact on government contractors and their employees who work at those sites. If the government closes or reduces operations at a site, a contractor may be forced to furlough or reduce the hours of employees. Some reduction actions could result in an employee who was exempt from overtime payments under the Fair Labor Standards Act (“FLSA”) being reclassified as non-exempt, which would require the employer to pay the employee overtime wages, with negative long-term repercussions.
An employee may volunteer to reduce her salary for any period of time without any FLSA consequences so long as her decision is completely voluntary. To the extent the employer must impose involuntary reductions on an exempt employee, the following options are available that should not result in the employee being reclassified as non-exempt under FLSA:Continue Reading FLSA Considerations In Response to Government COVID-19-Related Directions
Last month, the Department of Justice Office of Information Policy issued new guidance on the definition of confidential information under Exemption 4 of the Freedom of Information Act. This new guidance addresses the meaning of “confidential” in light of the Supreme Court’s decision in Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356 (2019). While not determinative, this DOJ Guidance offers contractors critical insight into how agencies will respond in the first instance to FOIA requests for information that may be subject to Exemption 4. This exemption protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” 5 U.S.C. § 552(b)(4).
As covered in this space earlier this year, in Food Marketing Institute, the Supreme Court jettisoned 40 years of established FOIA case law on how agencies defined confidential under Exemption 4. It rejected the well-established “competitive harm” test from National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) based on the lack of support in the statutory language. In its place, it adopted a “plain language” interpretation of confidential, finding two potential definitions: (1) information “customarily kept private, or at least closely held,” by the submitting party; and (2) information disclosed when the receiving party provides “some assurance that it will remain secret.” The Supreme Court held that the first condition was mandatory but expressly left open whether confidential information could lose that status if provided to the government “without assurances that the government will keep it private.” As a result, contractors and agencies alike were left without clear guidance as to whether, or when, a government “assurance” may be required.
Continue Reading DOJ Issues New Guidance for Treatment of Confidential Information Under Recent Supreme Court FOIA Decision