Government Contracts Regulatory Compliance

Late last year, a spokesman for the Department of Defense announced without fanfare that the agency would increase audits of certified cost or pricing data under the Truth in Negotiations Act (“TINA”).  While the full effect of that enhanced focus on TINA compliance remains to be seen, a recent decision by the Armed Services Board of Contract Appeals (“ASBCA”) provides helpful guidance for navigating upcoming TINA audits and defending against defective pricing claims, particularly in situations involving an on-going program where documents contain both facts and judgmental estimates.

Continue Reading With Potential New TINA Audits on the Horizon, the ASBCA Provides a Helpful Primer on Defending Against Defective Pricing Claims

Two notices recently published in the Federal Register indicate the Federal Emergency Management Agency (“FEMA”) intends to exercise Defense Production Act (“DPA”) authority in novel ways during the current coronavirus pandemic.

On May 12th, FEMA announced that it plans to invoke DPA authority which permits the President to consult with representatives of industry, business, financing, agriculture, labor, and other interests in order to enter into voluntary agreements or plans of action to help provide for the national defense.

The following day, FEMA published the Emergency Management Priorities and Allocations System (“EMPAS”) regulations governing FEMA’s use of DPA priorities and allocations authority — which, as we’ve previously covered on several occasions, permit the executive branch to require private companies to prioritize its orders and allocate resources in the private sector as needed to promote the national defense.  FEMA included a new concept of third-party rated orders in its version of DPA regulations.
Continue Reading FEMA Continues to Push Defense Production Act Authority On Several Fronts

Recent legislation significantly expanded many workers’ entitlement to paid sick leave and paid family leave.  These new benefits take effect on April 1st.  Our employment and benefits experts have described those requirements in a series of posts, including overviews here and here, and New York-specific considerations here.  Federal government contractors should pay particular attention to these new benefits and the way they interact with other paid sick leave requirements.
Continue Reading New Paid Sick Leave Requirements Impact Government Contractors

Following up on our post earlier this week giving a general overview of the Defense Production Act of 1950 (“DPA”), 50 U.S.C. §§4501 et seq., this post comments on President Trump’s March 18, 2020 Executive Order on Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19 (the “COVID-19 E.O.”) and provides some key considerations that companies should keep in mind if they are concerned about receiving prioritized or rated contracts or allocation orders or directives under the DPA.
Continue Reading The Defense Production Act and the Coronavirus Executive Order: Key Considerations

On March 13, the President declared a national emergency in response to the COVID-19 pandemic.  Doing so activated the authorities available to the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121-5207 (the “Stafford Act”) to provide federal assistance to state and local governments responding to the emergency, including financial assistance.

The federal assistance is coordinated and provided through the Federal Emergency Management Agency (“FEMA”) under the National Response Framework.  Although the Stafford Act generally does not make funding directly available to private businesses, a large portion of the nearly $50 billion that the President said will be available to FEMA may be used to procure goods and services from contractors assisting the relief effort.


Continue Reading State of Emergency: COVID-19, the Stafford Act, and What It All Means for Contractors

As the fallout from COVID-19 continues, federal contractors in every industry are seeing significant impacts on their ability to perform, ranging from scheduling delays to supply chain interruptions and increased costs of performance.  We previously addressed the rules and regulations governing excusable delays, which permit a contractor to avoid default if a failure to perform arises from causes beyond its control.  This next post addresses key FAR provisions that may entitle a contractor to a price adjustment or other recovery due to changes in contract requirements as a result of the pandemic.

Continue Reading Can I Recover the Added Costs of Work Caused by COVID-19?

As a followup to our recent post on the implications of the PREP Act for government contractors working to respond to the COVID-19 outbreak, this post will provide an overview of the Defense Production Act—including its key powers that the federal Government might invoke to counter the pandemic.
Continue Reading A Coronavirus Contractor’s Guide to the Defense Production Act

We’ve covered several topics already this week on the U.S. Government’s varied responses to the COVID-19 outbreak and how these responses will affect contractors that do business with the government, including BARDA’s EZ-BAA for COVID-19 diagnostics, mission-essential services during the outbreak, and how excusable delay provisions may help federal contractors affected by the outbreak.  But one area that has yet to receive in-depth discussion is the federal government’s mechanisms for addressing liability concerns raised by the use and distribution of countermeasures to the virus.  After all, while contractors are no doubt responding with appropriate speed and diligence in developing and deploying various COVID-19 countermeasures, no contractor wants to be the subject of a product liability, warranty, or negligence lawsuit later down the road.

Thankfully, Congress anticipated this concern and addressed it in 2005 by passing the Public Readiness and Emergency Preparedness Act (“PREP Act”), codified at 42 U.S.C. § 247d-6d.  Since enactment, the PREP Act has been used to issue declarations covering various countermeasures, including therapeutics, diagnostics, devices, vaccines, and constituent materials for pandemic influenza, acute radiation syndrome, smallpox, Botulism, anthrax, Zika, nerve agents, certain insecticides, and Ebola.  And earlier this week, the Secretary of the U.S. Department of Health and Human Services (the “Secretary”) issued a declaration pursuant to the PREP Act specifically for COVID-19 countermeasures.

This post will cover the PREP Act generally before discussing the implications of the COVID-19 declaration.
Continue Reading A Coronavirus Contractor’s Guide to the PREP Act

Earlier this month, the United States Court of Appeals for the Tenth Circuit issued a decision that provided further clarity on the False Claims Act’s standard for materiality.  The decision, United States ex rel. Janssen v. Lawrence Memorial Hospital, further demonstrated that materiality should be viewed through the eyes of the government customer rather than an hypothetical bystander.  The decision also reconfirmed that the FCA is not a “general antifraud statute” and that contractual or regulatory language conditioning payment on compliance will not necessarily prove that noncompliance was material.  Lawrence therefore serves as an important reminder to government contractors, practitioners, and other stakeholders about the significance of the materiality element in FCA litigation.

Continue Reading Tenth Circuit Provides New Material on FCA’s Materiality Standard

On Monday, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Acetris Health, LLC v. United States, No. 2018-2399 (Fed. Cir. Feb. 10, 2020) (“Acetris”), that would permit pharmaceutical manufacturers to source a drug’s active pharmaceutical ingredient (“API”) from India, China and other non “designated countries” and yet still offer the end product for sale to the U.S. Government.  Under the Trade Agreements Act (“TAA”), if a drug’s API was sourced from outside of the United States or a designated country, at least some Government agencies previously had taken the position that the U.S. Government could not purchase it.  In Acetris, the Federal Circuit explained that the TAA inquiry should turn not on where the API (or some other component) is sourced, but instead on where the pill (or other end product) is manufactured.  Consistent with this approach, the court held that a pill manufactured in the United States was compliant with the TAA and implementing regulations even though the pill’s API was sourced from India.

Although the full implications of the Acetris decision are not yet clear, there is no doubt that the ruling alters the TAA compliance landscape and offers broader lessons outside of the pharmaceutical manufacturing context.  Consequently, the decision warrants close attention by contractors seeking to maximize supply chain efficiency.
Continue Reading A New Path to TAA Compliance: U.S.-Made End Products in Acetris