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Peter Terenzio

Mr. Terenzio advises contractors across a broad range of different issues. His practice includes bid protests, contract claims and disputes, regulatory counseling, and internal investigations.

Before joining the firm, Mr. Terenzio clerked for Chief Judge Susan G. Braden of the Court of Federal Claims.

On May 16, 2024, the Internal Revenue Service (“IRS”) and Department of Treasury (“Treasury”) published Notice 2024-41 (the “2024 Guidance”), which provides new guidance for securing the domestic content bonus credit established by the Inflation Reduction Act (“IRA”).  As described in more detail below, the 2024 Guidance builds on the existing framework contained in Notice 2023-38 (the “2023 Guidance”), which was released last May.  Most notably, the 2024 Guidance expands the range of applicable projects subject to the safe harbor in the 2023 Guidance and adds a “New Elective Safe Harbor” to determine cost percentages for the domestic content calculation in solar, onshore wind, and battery storage projects.Continue Reading Treasury and IRS Release New Guidance on Inflation Reduction Act Domestic Content Bonus Credit

Today, the Federal Acquisition Regulatory Council (“FAR Council”) released an Advance Notice of Proposed Rulemaking (the “ANPRM”) describing the agencies’ plan to implement Section 5949 of the National Defense Authorization Act (“NDAA”) for FY 23 (Pub. L. 117-263).

Section 5949 prohibits the Federal Government from procuring certain semiconductor parts, products, or services traceable to named Chinese companies and potentially other foreign countries of concern.  To that end, the ANPRM invites public comment on the proposed contents of an implementing FAR clause, to take effect December 23, 2027.

As discussed below, the FAR Council proposed applying the regulations broadly to all solicitations and contracts, including commercial item and commercially available off-the-shelf (“COTS”) contracts, subject only to a limited waiver.  Although not set out in the statute, the clause would require contractors to conduct a “reasonable inquiry” into their supply chain to detect potential violations.  It would also require both disclosure and the taking of corrective action in the event that nonconforming products or services are discovered. 

More details are below, and our previous coverage of Section 5949 is available here.Continue Reading Chips on the Table: FAR Council Releases Advance Notice of Proposed Rulemaking to Implement Prohibition on Purchase and Use of Certain Semiconductors

The requirement to pay “prevailing wages” to covered workers is a perennial aspect of many types of government contracting, including construction contracts subject to the Davis-Bacon Act (“DBA”) and certain related laws (collectively referred to as the Davis-Bacon and Related Acts or “DBRA”).  In recent years, Congress has also expanded the reach of prevailing wage requirements to new industries: clean energy projects seeking to take advantage of federal tax credits under the Inflation Reduction Act are required to ensure that prevailing wages are paid or may be forced to forfeit valuable credits.  Semiconductor manufacturers — as well as manufacturers of materials and equipment used to make semiconductors — that seek to take advantage of the incentives established by the CHIPS Act are likewise required to follow the prevailing wage requirements of the DBA. 

It was in this context that the Department of Labor (“DOL”) introduced a 222-page final rule, “Updating the Davis-Bacon and Related Acts Regulations,” that substantially rewrote the implementing regulations under the DBRA.  Among other things, the final rule alters how DOL calculates the prevailing wage rates for each locality, and expands the definition of the “site of work” and categories of workers subject to the DBA.  Moreover, the final rule imposes the DBA by operation of law on federal construction contracts that would otherwise be covered, but that nevertheless do not include the requisite FAR clauses and wage determinations used to inform contractors of the DBA’s requirements.  The potential impact of these changes has not gone unnoticed:  last month, two trade associations — the Associated Builders and Contractors of Southeast Texas, Inc. (“ABCSETX”) and the Associated General Contractors of America (“AGC”) — filed separate suits challenging multiple aspects of the final rule, including the changes to prevailing wage calculation methodology and the revised definition of the site of work.  We expand on the final rule’s changes — and on the pending legal challenges — below. Continue Reading Whose Site Is It Anyway: Trade Groups Challenge DOL’s Prevailing Wage Calculation and Expanded Definition of the Site of Work Under the Davis-Bacon Act

On May 12, 2023, the Department of Treasury issued long-awaited guidance addressing the so-called domestic content “bonus credit” available under the Inflation Reduction Act of 2022 (“IRA”).  As we have discussed elsewhere in detail, the IRA incorporates extensions of the existing clean energy tax credits under IRC section 45 and section 48 and establishes new “technology neutral” versions of these credits (pursuant to sections 45Y and 48E) that will become available starting in 2025.  At the same time, the IRA also establishes a new 10% domestic content bonus credit that may be claimed in combination with these tax credits provided that the taxpayer: (1) uses U.S.-made iron and steel during construction of the energy-generation facility; and (2) ensures that the cost of any domestic manufactured products that are components of the facility meets a specified domestic content threshold.

The IRA statutory provision left open several key questions regarding how these domestic content requirements would work in practice (including, for example, how the threshold percentage would be calculated).  Last Friday, Treasury issued long-awaited guidance (Notice 2023-38 or the “Notice”) that, among other things, addresses: (1) the contours of the “iron and steel” requirement; and (2) the method by which the adjusted percentage is to be calculated.  While the guidance is consistent with traditional Buy America principles in certain respects, it also introduces both new concepts and new terminology — particularly with regards to the domestic content percentage calculation — which we discuss in detail below. Continue Reading Treasury Releases Long-Awaited Guidance for Domestic Content Bonus Credit Under Inflation Reduction Act

Last December, President Biden issued Executive Order 14057, “Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability,” which directed the government to adopt cleaner and more sustainable procurement practices, with the ultimate objective of net-zero emissions by 2050

Pursuant to that directive, GSA has issued a new RFI seeking information regarding domestically manufactured solar photovoltaic (PV) panels and systems, as well as PV system installation.  GSA intends to use the information to develop a solar PV procurement strategy and a procurement standard for use in future solicitations — including solicitations for Power Purchase Agreements (PPA), Energy Savings Performance Contracts (ESPCs), Utility Energy Service Contracts (UESCs), and other vehicles. 

Given the RFI’s emphasis on sourcing and country of origin, it is possible that any new procurement standards for civilian contracting would parallel existing regulations at DFARS 252.225-7017, which generally require DoD contractors to make use of PV devices originating from the United States or certain designated or qualifying countries.  Of course, the ultimate impact of the RFI on future procurement strategy remains to be seen.  What is certain, however, is that the Administration is committed to clean technology procurements and that domestic preferences remain an overriding and central concern. 

Comments in response to the RFI are due by November 18, 2022.  More detail about specific topics covered in the RFI is below.Continue Reading GSA Issues Request for Information on Photovoltaic Systems

On August 25, 2022, President Biden announced a new Executive Order (“EO”) addressing the Implementation of the CHIPS Act of 2022 (“CHIPS Act”).  The CHIPS Act was signed by President Biden on August 9, 2022, and, among other things, authorizes $39 billion in funding for new projects to establish semiconductor production facilities within the United States.  The new EO identifies the Administration’s implementation priorities for this CHIPS Act funding and creates the CHIPS Implementation Steering Council to aid with the rollout of administrative guidance.  In connection with the EO, the Department of Commerce launched CHIPS.gov, which is intended to be a centralized resource for potential applicants of CHIPS funding.  The EO and new website reflect the Administration’s intent to swiftly implement the CHIPS Act and increase the domestic production of semiconductors. Continue Reading Biden Administration Announces Priorities for the Implementation of the CHIPS Act of 2022

Many contractors are familiar with the Davis-Bacon Act (“DBA”), the statute that requires government contractors to pay prevailing wages to workers employed in the construction, alteration, or repair of buildings or other public works.  The DBA is enforced by the Department of Labor, which is responsible for issuing the “wage determinations” that list the prevailing wages for different labor categories within a geographical area and for promulgating regulations used to implement the DBA’s requirements.

On March 18, 2022, the Department issued a notice of proposed rulemaking (“NPRM”), announcing that it intends to make a number of revisions to the DBA regulations.  In the Department’s view, these revisions represent the largest change to the DBA regulations since the last major rewrite in 1981.Continue Reading Department of Labor Proposes Overhaul to Davis-Bacon Act Regulations

Two federal agencies recently released a joint Request for Information (“RFI”) in the latest in a series of concrete steps to meet the Biden Administration’s goal to achieve 100 percent carbon pollution-free electricity (CFE)[1] in federal operations by 2030.  The RFI, issued by DLA-Energy and GSA, offers industry a chance to shape future federal CFE procurements by providing information on carbon-free electricity supplied in competitive retail markets.  Although not itself a procurement opportunity, the information submitted under the RFI will inform the parameters and conditions of CFE competitions that the federal government expects to begin as soon as this year, with contract deliveries starting in 2023.
Continue Reading RFI Begins to Chart Course for Federal Clean Energy Procurements

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

On December 8, 2021, President Biden signed Executive Order 14057 (“Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability”), the Administration’s latest – and most significant – effort to promote cleaner and more sustainable federal procurement.  At the heart of the new Order is the Administration’s goal to meet a net-zero emissions target across the federal government by 2050.  To do so, the Administration promises to “transform federal procurement and operations” and to leverage the government’s portfolio of “300,000 buildings, fleet of 600,000 cars and trucks, and annual purchasing power of $650 billion [in] goods and services” to facilitate increased adoption of green technology.  The new Executive Order will require further agency action to pursue and execute on these objectives, but once implemented, it appears poised to usher in a new – and greener – era of federal contracting.

In order to achieve net-zero emissions by 2050, the Executive Order and an accompanying “Federal Sustainability Plan” set four primary goals:

  1. Power: 100 percent carbon pollution-free electricity on a net annual basis by 2030;
  2. Vehicles: 100 percent zero-emission vehicle acquisitions by 2035, including 100 percent zero-emission light-duty vehicle acquisitions by 2027;
  3. Buildings: A net-zero emissions building portfolio by 2045, including a 50 percent emissions reduction by 2032; and
  4. Materials: Net-zero emissions from federal procurement no later than 2050, including a Buy Clean policy to promote use of construction materials with lower embodied emissions.

This blog post consists of three parts: (1) a summary of each of the four major goals referenced above; (2) a description of the Executive Order’s procedures for implementation, together with the exceptions to its coverage; and (3) concluding thoughts about key takeaways of this Executive Order for the contracting community and potential new entrants into the federal marketplace.Continue Reading Biden Executive Order Promises to “Transform Federal Procurement” to Meet Net-Zero Emissions Target