In his first few days in office, President Trump issued several executive orders (“EOs”) and memoranda, many of which may have implications for federal contractors and grant recipients, including the following:Continue Reading President Trump Issues Numerous Executive Orders with Potential Impacts on Federal Contractors and Grant Recipients
The Proposed FAR Rule on OCIs: Big Changes May Be Coming
Yesterday, the FAR Council issued a proposed rule that would update the U.S. Government’s approach to organizational conflicts of interest (OCIs). While the proposed rule is not finalized and may change in response to forthcoming comments from interested parties, the proposed rule contemplates major changes to the FAR’s existing framework in this area. In this post, we summarize the background leading up to the proposed rule and highlight key areas of proposed change.
Background
Continue Reading The Proposed FAR Rule on OCIs: Big Changes May Be Coming
It Takes Two: SBA Proposes Applying “Rule of Two” to Multiple-Award Contracts
SBA’s “Rule of Two” often requires federal agencies to set aside an acquisition for small businesses whenever there is reasonable expectation that offers will be obtained from at least two small businesses that are competitive in terms of fair market prices, quality, and delivery.
On Friday, SBA issued a Proposed Rule that would extend the reach of the Rule of Two by applying it to orders issued under many multiple-award contracts. As such, under SBA’s proposal, agencies would be required to set aside an order under a multiple-award contract when there is a reasonable expectation of obtaining competitive offers from two or more small business contract holders, unless an exception – including an exception for Federal Supply Schedule (FSS) contracts – applies.
SBA believes that this rule, if adopted, would: (1) align multiple-award contract purchases with the Small Business Act’s requirement that a fair proportion of the total purchases and contracts for goods and services be awarded to small businesses; (2) resolve confusion created by contradictory interpretations of the Rule of Two; and (3) increase contracting opportunities for small businesses, particularly small disadvantaged businesses (SDBs).
More details are below. Continue Reading It Takes Two: SBA Proposes Applying “Rule of Two” to Multiple-Award Contracts
DOD Office of Strategic Capital Begins Its Direct Lending Efforts to Secure U.S. Industrial Base
The Office of Strategic Capital (“OSC”) within the Department of Defense (“DOD”) has launched a Credit Program, under which it will provide debt financing in critical technology areas that drive national and economic security. As an initial step, OSC is soliciting applications for equipment loans, which may be submitted between
Continue Reading DOD Office of Strategic Capital Begins Its Direct Lending Efforts to Secure U.S. Industrial BasePublic Comments to Proposed Rule Underscore the Need for Additional Clarity on SBA Recertification Requirements
The Small Business Administration (“SBA”) recently issued a proposed rule that would significantly change the rules concerning small business recertification in M&A transactions and other events (the “Proposed Rule”). SBA has framed the Proposed Rule as a consolidation of what is currently a scattered set of regulations, but the rule goes further than consolidating and clarifying existing law. It would expand recertification requirements in several key ways, including eliminating exemptions that currently allow contractors to continue to utilize set-aside multiple award vehicles after a so-called “disqualifying recertification” (i.e., a recertification as other than small or other than disadvantaged).
SBA invited public comment on the Proposed Rule. The deadline for submitting comments passed last week. We have spent some time reviewing the comments submitted thus far, which provide insight into the issues that affect both small business contractors and the industry writ large. As discussed below, many of the comments describe the potential chilling effects of the Proposed Rule, which could deprive contractors of key income streams just as they graduate from small business status and discourage investors and other contractors from acquiring small businesses that hold multiple award contracts.
The sections below describe the Proposed Rule in greater detail and provide an overview of the comments to the Proposed Rule.Continue Reading Public Comments to Proposed Rule Underscore the Need for Additional Clarity on SBA Recertification Requirements
Bigger Pay Days Are Coming for Some Federal Contract Workers in 2025
The U.S. Department of Labor (“DOL”) recently announced its annual update to the hourly minimum wage for federal contract workers. Beginning January 1, 2025, the minimum wage for employees performing work on or in connection with covered contracts will increase from $17.20 to $17.75 per hour. The increase applies to tipped and non-tipped employees, as well as employees with disabilities.
The DOL announcement follows President Biden’s Executive Order 14026, issued in April 2021, to “promote economy and efficiency in procurement by contracting with sources that adequately compensate their workers.” We discuss the types of federal contracts and workers subject to the wage rate increase, and its implications for contractors, below.Continue Reading Bigger Pay Days Are Coming for Some Federal Contract Workers in 2025
It’s Time to Re-Imagine FAR Subpart 42.12: Ways to Improve the Novation Process
Earlier this month, the FAR Council took action to extend its existing authority to collect information from government contractors for novation requests with a notice in the Federal Register. While this was a routine action, it is a reminder that the novation process is in need of serious attention. The
Continue Reading It’s Time to Re-Imagine FAR Subpart 42.12: Ways to Improve the Novation ProcessOffice of Federal Contract Compliance Programs Releases New Guidance on the Use of Artificial Intelligence in Federal Contracting Employment Processes
Recently, the Department of Labor (“DOL”) Office of Federal Contract Compliance Programs (“OFCCP”) unveiled new guidance regarding the use of automated systems and artificial intelligence (collectively referred to as “AI”) in the workplace. This guidance was issued as a part of a series of actions that the Biden administration has taken to address AI in various contexts and industries.
The OFCCP guidance follows President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence, which directed the Secretary of Labor to “publish guidance for Federal contractors regarding nondiscrimination in hiring involving AI and other technology-based hiring systems.” Specifically, the guidance addresses how federal prime contractors and subcontractors should approach employment nondiscrimination risks and best practices when using AI in the context of the laws that OFCCP enforces.Continue Reading Office of Federal Contract Compliance Programs Releases New Guidance on the Use of Artificial Intelligence in Federal Contracting Employment Processes
New Proposed Rule on Pay Equity and Transparency in Federal Contracting
On January 30, 2024, the Federal Acquisition Regulatory Council (“FAR Council”) proposed a new “Pay Equity and Transparency in Federal Contracting” rule for government contractors. The proposed rule intends to increase race and gender equity for employees of federal prime contractors and subcontractors by prohibiting them from requesting and relying on certain information about job applicants’ compensation history and requiring contractors to disclose compensation rates in job announcements for certain positions. These requirements would apply to all prime contracts and subcontracts – including for commercial products and services – where the principal place of performance is within the United States, regardless of dollar amount or tier. The proposed rule is the latest in a number of steps the Biden Administration has taken to address discriminatory pay practices in federal procurement and contracting since announcing an Executive Order on Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency in March 2022.
The proposed rule’s potential impact and implications for contractors — as well as opportunities to submit comments on the issue — are discussed below.Continue Reading New Proposed Rule on Pay Equity and Transparency in Federal Contracting
Updates to FAR Small Business Recertification Requirements: More Clarity, More Complexity
Last Friday, September 29, the FAR Council published a proposed rule that would update the Federal Acquisition Regulation (FAR) to implement the Small Business Administration’s (SBA) 2020 changes to rules on when small businesses must recertify their status in connection with orders under multiple-award contracts.
The SBA size and socioeconomic recertification rules are convoluted — especially in situations where a small business becomes a large business by virtue of an M&A transaction and wants to continue bidding on orders under a multiple-award contract. The proposed changes seek to provide greater clarity in the FAR on the situations in which small businesses must recertify their size status in connection with certain orders and take a much-needed step towards aligning the FAR small business requirements and clauses with SBA’s regulations. As is true with respect to small business representations more generally, contractors should pay attention to the situation-specific recertification requirements to avoid being inadvertently tripped up.Continue Reading Updates to FAR Small Business Recertification Requirements: More Clarity, More Complexity