Defense Industry

On October 3, 2023, the Federal Acquisition Regulation (FAR) Council released two new proposed cybersecurity rules. The first of the two, covered in a separate blog, is titled “Cyber Threat and Incident Reporting and Information Sharing,” and adds new requirements to the cybersecurity incident reporting obligations of federal contractors. The second rule, titled “Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems,” covers cybersecurity contractual requirements for unclassified Federal information systems.

Both rules arise from Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”). We have covered developments under this Executive Order as part of a series of monthly posts. The first blog summarized the Cyber EO’s key provisions and timelines, and subsequent blogs described the actions taken by various government agencies to implement the Cyber EO from June 2021 through November 2023. This blog describes key requirements imposed by the proposed “Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems” rule (the “Proposed Standardizing Rule”)

Proposed Cybersecurity Requirements for Unclassified Federal Information Systems

As directed by the Cyber EO, the Proposed Standardizing Rule would establish cybersecurity policies, procedures, and requirements for contractors that develop, implement, operate, or maintain Federal Information Systems (“FIS”). Under the rule, a FIS is defined as “an information system used or operated by an agency, by a contractor of an agency, or by another organization on behalf of an agency.”

Continue Reading Proposed FAR Rule: “Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems”

The Armed Services Board of Contract Appeals has issued its annual report for FY 2023, shedding light on how often contractor appeals reach a successful result, and what agencies are most frequently involved in contract litigation.

Continue Reading ASBCA Issues Annual Report, Providing Data on How Often Contractors Prevail

On October 17, 2023, the U.S. Government Accountability Office (“GAO”) published a report on mergers and acquisitions (“M&A”) in the defense industrial base. The report details the current M&A review process of the Department of Defense (“DOD”) and provides recommendations to proactively assess M&A competition risks.

Continue Reading GAO Recommends Increased Guidance for DOD Mergers & Acquisitions Review

On October 3, 2023, the Federal Acquisition Regulation (FAR) Council released two new proposed cybersecurity rules. The first of the two, titled “Cyber Threat and Incident Reporting and Information Sharing,” adds new requirements to the cybersecurity incident reporting obligations of federal contractors. The second rule, which we will cover in a separate blog post, is titled “Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems” and covers cybersecurity contractual requirements for unclassified Federal information systems.

Both rules arise from Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”). We have covered developments under this Executive Order as part of a series of monthly posts. The first blog summarized the Cyber EO’s key provisions and timelines, and subsequent blogs described the actions taken by various government agencies to implement the Cyber EO from June 2021 through September 2023. This blog describes key requirements imposed by the proposed “Cyber Threat and Incident Reporting and Information Sharing” rule.

Continue Reading FAR Cyber Threat and Incident Reporting and Information Sharing Rule

Following our recent overview of topics to watch in the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2024, available here, we continue our coverage with a “deep dive” into NDAA provisions related to cybersecurity and software security in each of the Senate and House bills.  For the past three years, the NDAA has dedicated a separate Title to cyber and cybersecurity, reflecting the increased importance of these issues in Department of Defense (“DoD”) operations.  As expected, both the Senate and House versions of the NDAA bill continue this tradition.  Many of the cyberspace related provisions in both chambers’ bills would have direct or indirect impacts on DoD contractors and other members of the Defense Industrial Base (“DIB”).  We summarize below the cyber-related provisions that are most likely to impact the DIB. 

Continue Reading Key Cyber Security and Software Security Provisions of the House and Senate Versions of the Fiscal Year (FY) 2024 National Defense Authorization Act (NDAA)

Domestic sourcing requirements are not new, but the Government is always developing new tools for increasing the sourcing of goods from the U.S. and allied countries.  Both sides of the political aisle have marched to a drumbeat of increased domestic sourcing for the past several years.  Most recently, the Biden Administration implemented Executive Order 14005 to “maximize” the U.S. Government’s purchase of goods and services produced in the United States and Executive Order 14104 to increase domestic manufacturing and commercialization in certain research and development supported by federal funding.  The ongoing bi-partisan support for bolstering domestic sourcing is illustrated no better than through this year’s NDAA, which focuses on expanding the domestic supply chain for materials and supplies critical to the U.S. military, encouraging the purchase of domestic end items, and providing more opportunities for the Department of Defense (“DoD”) to engage with and purchase from domestic businesses.

Continue Reading Key Domestic Sourcing Provisions of the House and Senate Versions of the Fiscal Year (FY) 2024 National Defense Authorization Act (NDAA)

Following our recent overview of key topics to watch in the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2024, available here, we continue our coverage with a “deep dive” into NDAA provisions related to the People’s Republic of China (“China” or “PRC”) in each of the House and Senate bills.  DoD’s focus on strengthening U.S. deterrence and competitive positioning vis-à-vis China features prominently in the 2022 National Defense Strategy (“NDS”) and in recent national security discourse.  This focus is shared by the Select Committee on Strategic Competition Between the United States and the Chinese Communist Party (“Select Committee”), led by Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL). 

It is no surprise, then, that House and Senate versions of the NDAA include hundreds of provisions—leveraging all elements of national power—intended to address what the NDS brands as China’s “pacing” challenge, including many grounded in Select Committee policy recommendations.  Because the NDAA is viewed as “must-pass” legislation, it has served in past years as a vehicle through which other bills not directly related to DoD are enacted in law.  In one respect, this year is no different—the Senate version of the NDAA incorporates both the Department of State and Intelligence 2024 Authorization bills, each of which includes provisions related to China. 

Continue Reading Not to Be Outpaced: NDAA Presents Measures Addressing China

It’s that time of year again: the House and Senate have each passed their respective version of the National Defense Authorization Act for FY 2024 (“NDAA”) (H.R. 2670, S. 2226).  The NDAA is a “must pass” set of policy programs and discretionary authorizations to fund Department of Defense (“DoD”) operations.  Lawmakers are currently undertaking the arduous process of reconciling these bills, while jockeying to include topics of importance in the final legislation.  The engrossed bills contain a number of significant provisions for defense contractors, technology providers, life science companies and commercial-item contractors – many of which we discuss briefly below and others that we will analyze in more depth in our NDAA series in the coming weeks.  Subscribe to our blog here so that you do not miss these updates.

Continue Reading Key Topics to Watch as Congress Works to Fund Next Year’s DoD Budget

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?

In Honeywell International, Inc., the ASBCA declined to dismiss a roughly $151 million claim by DCMA alleging a violation of CAS 410, holding that the government’s allegations were sufficient to state a claim for improper treatment of G&A expenses.  The Board’s decision provides guidance on how to interpret CAS 410 — a topic that is often addressed by auditors, but has rarely been the subject of written opinions by the courts or boards of contract appeals.

Continue Reading ASBCA: Government Can Pursue $151 Million Claim Under CAS 410