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
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.”
On August 25, 2022, the Department of Defense (“DOD”) published — with immediate effect — two new Defense Federal Acquisition Regulation Supplement (“DFARS”) clauses requiring defense prime contractors and subcontractors disclose any work in China on certain DOD contracts. Under the interim rule, the DOD is prohibited from awarding or extending certain new contracts if a contractor fails to disclose its use of workers in China in performance of a covered DOD contract. Although there is no prohibition on DOD awarding a covered contract to an entity that makes a disclosure, the Department can rely on a variety of authorities to exclude certain contractors and products that represent supply chain risks, especially if the products or services involve information technology.
Continue Reading New DFARS Clauses Require Defense Contractors to Disclose Work Performed in China
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
Earlier today, the FAR Council issued a final rule revising the FAR definition of “commercial item.” The final rule effectively splits the prior definition of “commercial item” into separate definitions for “commercial product” and “commercial service,” without making substantive changes to the existing definitions. The final rule also replaces references to “commercial items” throughout the FAR with corresponding references to “commercial products,” “commercial services,” or both, as appropriate.
Continue Reading New Final Rule Replaces “Commercial Item” Definition and Implements Definitions for “Commercial Products” and “Commercial Services”
As GSA Multiple Award Schedule contractors know all too well, Schedule contracting involves a complex web of customer-tracking, reporting, and price-adjustment requirements. Those of us who navigate these often byzantine rules understand why many in the industry have called for the adoption of an alternative approach to verifying price reasonableness.
For the last several years, GSA has been piloting just such an alternative: the Transactional Data Reporting (“TDR”) program, through which the government collects transaction-level data on products and services purchased through the Schedule to make data-driven decisions that save taxpayer dollars. GSA has been running a TDR pilot program for several years to test the potential for a new regulatory regime, though the program sometimes has been the source of criticism and controversy. Now that controversy has heightened further: GSA’s Office of Inspector General published an audit report on June 24, 2021 that is sharply critical of the program, only to see GSA’s Federal Acquisition Service (“FAS”) Commissioner publicly reject the report’s conclusions and defend TDR’s effectiveness.
Time will tell whether the TDR rule becomes the new standard for GSA Schedule contracting. But the latest round of controversy suggests that the current maze of requirements are not going away any time soon.
Federal civilian agencies will now face new restrictions on when and how they can use Lowest Price Technically Acceptable source selection procedures. A new rule in the Federal Acquisition Regulation is the latest in a series of measures aimed at regulating the use of LPTA source selection procedures. The new rule implements an October 2019 proposed rule and takes effect on February 16, 2021.
Continue Reading New FAR Rule Continues Shake-Up of LPTA Procurements
On Friday, the General Services Administration (“GSA”) announced that it had awarded three contracts to develop online shopping portals for commercially-available off-the-shelf (“COTS”) items. The awardees are Amazon Business, Fisher Scientific, and Overstock.com.
Continue Reading GSA Awards First Contracts to Develop an Online Shopping Platform, and the White House Seems to Be Paying Attention
On October 2, 2019, the Department of Defense, General Services Administration, and NASA issued a proposed rule that would amend the Federal Acquisition Regulation to establish new restrictions on when and under what circumstances civilian agencies may employ Lowest Price Technically Acceptable source selection procedures. The proposed rule would implement Section 880 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, and follows hot on the heels of DoD’s final rule making similar — but not identical — amendments to the Defense Federal Acquisition Regulation Supplement. (See our recent blog post on the new DFARS rule.)
Continue Reading Lowest Priced Technically Acceptable Procurements Are Less and Less Acceptable: Proposed FAR Rule Further Continues Shake-Up of LPTA Procurements