Archives: Defense Industry

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ASBCA Issues Important Ruling in “Contractor-on-the-Battlefield” Dispute

Earlier this month, the Armed Services Board of Contract Appeals held that the U.S. Army breached its contractual obligation to provide physical security to its principal logistical support contractor, KBR, during the height of the Iraq War.  As a consequence, the Board found that KBR was entitled to be reimbursed for $44 million, plus interest, … Continue Reading

Section 809 Panel Urges Congress to Bring DoD Spending into the 21st Century

The Section 809 Panel recently released an interim report and supplement (the “Interim Report”) advocating in broad strokes for a host of improvements to the Department of Defense’s (“DoD”) acquisition system to better streamline the process and increase industry offerings to the government.  The NDAA for FY 2016 established the Section 809 Panel to address … Continue Reading

GAO Report Identifies Government-wide Contracting Trends In Stark Contrast To Proposed Presidential Budget

On March 9, 2017, the U.S. Government Accountability Office (“GAO”) issued a Report entitled “Contracting Data Analysis — Assessment of Government-wide Trends” (the “Report”), detailing Government-wide trends in federal contracting for goods and services during the five-year period from 2011 through 2015.  The report highlights trends in spending, competition, contract types, and contract recipients, and … Continue Reading

2017 NDAA’s Impact on Audits and Cost Accounting Standards

Section 820 of the National Defense Authorization Act for Fiscal Year 2017, Pub. L. No. 114-238, 130 Stat. 2000 (NDAA), makes three significant changes to the federal government’s future method of conducting audits and implementation of Cost Accounting Standards (CAS).  First, it empowers contractors to avoid Defense Contract Audit Agency (DCAA) audits by employing private … Continue Reading

DoD Further Clarifies Its DFARS Cybersecurity Requirements

On January 27, 2017, the Department of Defense (DoD) issued an updated Frequently Asked Questions (FAQ) regarding the application and requirements of DFARS 252.204.7012 Safeguarding Covered Defense Information and Cyber Incident Reporting. Though questions remain regarding various nuances of the rule, the FAQ is a helpful document for those contractors still working on implementation of … Continue Reading

Ninth Circuit Rejects Heightened Standard for Demonstrating Likelihood of Competitive Harm Under FOIA Exemption 4

The Ninth Circuit recently confirmed that predicting the future with near certainty is not required when seeking to protect information from disclosure under Exemption 4 of FOIA. In a recent unpublished decision, the Ninth Circuit concluded that Sikorsky Aircraft’s small business subcontracting plan was “confidential commercial or financial information” exempt from disclosure under Freedom of … Continue Reading

DoD Reassures Major Contractors It’s Not Returning to Old IR&D Practices, But Significant Questions Still Remain

On January 4, 2017, the Department of Defense’s top acquisition official issued a memorandum further clarifying the implementation of a November 2016 final rule concerning the reimbursement of major contractors’ Independent Research & Development (“IR&D”) costs.  In a move likely intended to reassure major defense contractors, Undersecretary of Defense for Acquisition, Technology & Logistics, Frank … Continue Reading

More Cybersecurity Changes Expected for Contractors in 2017

In 2016, the dangers presented by an increasingly digital world clearly were on display. A cyber-attack using an army of Internet of Things devices interfered with the operations of major commercial websites. And the Presidential Election was plagued with allegations of state-sponsored cybersecurity hacking (for which the Obama Administration just issued sanctions against the Russian … Continue Reading

When does a contract release release a claim? A classic contract tongue twister.

You are reviewing a contract modification and notice a paragraph titled “Release of Claims.”  Do you know what claims will be released by this language?  Or worse, the contracting officer just issued a final decision rejecting your claim (under the Contract Disputes Act) because the release in a contract modification constituted an accord and satisfaction. … Continue Reading

Private-Sector Opportunities – and Challenges – in the New $38.8B U.S.-Israel Military Assistance Package

U.S. and Israeli defense industries are anxious for details of a ten-year, $38.8 billion military assistance package that was signed in Washington this past September. Whether the terms of the aid package are upended entirely or left mostly unchanged by the current incoming administration will have far reaching consequences on future U.S. and Israeli government … Continue Reading

Confidentiality Agreements Continue To Pose Potential Compliance Trap for Contractors

Federal contractors who require employees to sign confidentiality agreements—including those selling only commercial products or in small quantities—need to examine their agreements closely. For the last two years, the government has sought to prohibit confidentiality agreements that restrict employees’ ability to report fraud, waste, or abuse to “designated investigative or law enforcement representative[s]” for federal … Continue Reading

Cybersecurity Update: DoD Releases Long-Awaited Final Rule

On October 21, 2016, the Department of Defense (DoD) issued its long-awaited Final Rule—effective immediately—imposing safeguarding and cyber incident reporting obligations on defense contractors whose information systems process, store, or transmit covered defense information (CDI). The Final Rule has been years in the making and is the culmination of an initial rule issued in November … Continue Reading

DoD Finalizes Rule Expanding Contractor Rights in Technical Data

DoD has issued a Final Rule that gives added protections to the technical data of privately developed commercial items incorporated into major systems, including major weapon systems.  This rule implements Section 813(a) of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 and modifies 10 U.S.C.§ 2321(f).… Continue Reading

DOD Final Rule Addresses Source Requirements and Cost Recovery for Use of Counterfeit Electronic Parts

Supply chain protection has been a point of increasing emphasis by the Government and especially the Department of Defense (“DoD”) in recent years. In no area is this more true than ensuring that Government systems and equipment are free from counterfeit electronic parts, which can raise both security and defect concerns. DoD has accordingly taken several steps, many of which have taken the form of new requirements on contractors, to protect against counterfeit electronic parts. With these requirements has come added risk to contractors that even mistakenly use electronic parts in the goods they sell to DoD. However, an August 30, 2016, final DFARS rule (implemented at DFARS 2301.205-71) seeks to mitigate some of this risk by allowing contractors to recover the cost of replacing counterfeit electronic parts, as long as the contractor has taken certain steps to prevent the use of such parts.… Continue Reading

Take Two: Proposed DFARS Commercial Item Rule Still Fails to Rein in Contracting Officer Discretion

On August 11, 2016, the Department of Defense (“DoD”) published a revised proposed rule to amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement sections of the National Defense Authorization Acts for Fiscal Years 2013 and 2016 relating to commercial item acquisitions. This proposed rule replaces the rule that DoD proposed last August and … Continue Reading

DoD Finally Issues Proposed Rule Addressing 2012 NDAA Changes to Technical Data Rights

On June 16, 2016, the Department of Defense (DoD) issued a proposed rule to implement Section 815 of the National Defense Authorization Act for Fiscal Year 2012, which was originally enacted in December 2011.  Under the proposed rule, DoD would be given additional flexibility to release technical data or computer software to third parties (including … Continue Reading

ASBCA Addresses CDA Jurisdiction Over Claims Involving Contractor Fraud

The Armed Services Board of Contract Appeals (“ASBCA” or the “Board”) recently issued an opinion addressing several important, and controversial, topics of interest to government contractors.  The lengthy opinion addressed key issues related to the Board’s jurisdiction over government claims and affirmative defenses based on alleged contractor fraud, the Contract Disputes Act (“CDA”) statute of limitations, … Continue Reading

House and Senate Defense Bills Target Executive Order

Congress has weighed in on Executive Order 13673, known officially as the “Fair Pay and Safe Workplaces Order” and unofficially as the “Blacklisting Order.”  While the Office of Management and Budget reviews the Labor Department’s draft of the final regulations and guidance, the House and Senate Armed Services Committees have added language to the Fiscal … Continue Reading

Could Senate NDAA Spell the End of Incumbent Bid Protests?

Defense contractors seeking to protect their incumbent contracts by filing protests with the Government Accountability Office (GAO) may need to think twice if Congress enacts protest reform provisions included in the Senate Armed Services Committee’s recently released version of the National Defense Authorization Act (NDAA) for Fiscal Year 2017 (S. 2943). Under Sec. 821 of … Continue Reading

DoD Rule Would Help Contractors Protect Their Technical Data Rights in Commercial Items Used in Major Systems

The Department of Defense (DoD) is considering a proposed rule that would help contractors protect their technical data rights in privately-developed commercial items that are incorporated into major systems, including major weapons systems. The proposed rule likely will be welcomed news to the defense industry, which has long sought to defend contractors’ intellectual property rights … Continue Reading

Battle over “Blacklisting” Order: Obama Administration Moves Forward with Fair Pay Order as House Members Attempt to Exempt DOD

On May 4, the Labor Department and Federal Acquisition Regulatory (“FAR”) Council submitted to the White House Office of Management and Budget (“OMB”) their final versions of regulations and guidance (respectively) implementing Executive Order 13673, entitled “Fair Pay and Safe Workplaces” (“FPSW Order”).  The FPSW Order, which requires contractors bidding on government contracts to disclose … Continue Reading

Contractor’s Timely Notice to the CO of an ‘Intent to Appeal’ is Good Enough for the ASBCA

A recent decision from the Armed Services Board of Contract Appeals (ASBCA) serves as an important reminder that a contractor’s timely notification to the contracting officer (CO) of its intent to appeal a CO’s final decision will satisfy the Board’s 90-day deadline for filing appeals under the Contract Disputes Act (CDA). Although the facts of … Continue Reading

DHS Seeking Input on ISAO Standards

The Department of Homeland Security (DHS) has announced a public meeting on May 18-19, 2016 to “discuss and debate Voluntary Standards for Information Sharing and Analysis Organizations (ISAOs) as they relate to” Executive Order 13691 (EO 13691).  See 81 Fed. Reg. 23506.  This meeting follows the recent passage of the Cybersecurity Act of 2015, which … Continue Reading

DoD IG Report Reveals Ongoing Struggles in IT-Acquisition Reform

IT-acquisition reform remains an area of ongoing concern for Federal agencies and government contractors.  Indeed, as we previously discussed, the GAO has added IT Acquisitions and Operations to its bi-annual list of programs it identifies as posing a high risk for fraud, waste, abuse, and mismanagement.  Strengthened by Congress’ passage in December 2014 of the … Continue Reading
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