Senate Democrats Look to Strengthen “Buy American” Policies and Requirements

Last week a group of four Senate Democrats – led by Minority Leader Chuck Schumer (D-NY) – jointly published an article about “strengthen[ing]” the U.S. Government’s “Buy American policies.” While the senators acknowledged President Trump’s recent efforts to “re-examine the use of . . . Buy American waivers” (see our blog post regarding the “Buy American” Executive Order), they also expressed concern that these efforts would “not fundamentally change . . . Buy American policies.” In other words, both sides of the aisle are targeting “Buy American” reforms.

[A more in-depth version of this blog post was published in Law360.]

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The FCA’s First-to-File Bar and The Enduring Importance of Textualism

Two years ago, in Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, the Supreme Court interpreted the “first-to-file” bar of the False Claims Act (“FCA”) in a manner that seemingly authorizes relators to pursue qui tam suits based upon the same allegations made in previously dismissed FCA actions.  On remand from the Supreme Court, the Fourth Circuit recently issued an opinion in Carter in which it took a similarly text-based approach, but reached a different conclusion, holding that the FCA’s first-to-file bar should be interpreted in a manner that promotes finality and prevents copycat lawsuits.  These opinions demonstrate the importance of carefully assessing the FCA’s statutory text in litigation.

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Border Wall Protest Dismissed After Protester Fails to Timely Submit Comments

The Department of Homeland Security’s procurement for border wall prototypes is a complex, controversial procurement by any measure.  But one protest of that procurement has recently been dismissed for a simple reason: the protester failed to timely submit comments on the agency report.

Bid protests at the Government Accountability Office are notorious for their fast and rigid deadlines.  One such deadline requires that protester comments on the agency report be filed within ten calendar days of receiving the agency report — barring an extension from GAO, which must be granted before the deadline passes.  A protester cannot opt to skip comments and rest on its initial protest.  If it fails to timely submit comments, GAO will dismiss its protest.

PennaGroup, LLC protested its exclusion from the second of two phases of the border wall–prototype procurement.  The solicitations required “offerors to acknowledge any issued amendment by signing the accompanying Standard Form 30 (SF-30), and to submit the SF-30 with each offeror’s proposal.”  PennaGroup’s proposals were eliminated from the competition for both the solid concrete prototype and the other-than-solid-concrete prototype because it failed to include SF-30s acknowledging the first six of seven RFP amendments.

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CIA Torture Case Is A Cautionary Tale for Contractors on The Battlefield

By Alex L. Sarria and Marianne F. Kies

The recent settlement of a noteworthy “contractor-on-the-battlefield” case should serve as a cautionary tale to government contractors that perform high-risk work in support of military operations. In Suleiman Abdullah Salim v. James E. Mitchell and John Jessen, No. CV-15-0286, three foreign plaintiffs filed Alien Tort Statute (“ATS”) claims against American contractors who allegedly “designed, implemented, and personally administered” the CIA’s post-9/11 “enhanced interrogation” program.

The district court recently issued an opinion denying the defendants’ motion for summary judgment on the basis of the Political Question Doctrine and Derivative Sovereign Immunity. Less than two weeks later, the contractors agreed to settle the case for an undisclosed amount. The Salim case illustrates why government contractors must proactively assess and mitigate potential tort liabilities before entering into high-risk federal contracts, such as contracts for military logistics support, private security, and intelligence-support services.

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NIST Releases Fifth Revision of Special Publication 800-53

The National Institute of Standards and Technology (“NIST”) released on August 15, 2017 its proposed update to Special Publication (“SP”) 800-53. NIST SP 800-53, which was last revised in 2014, provides information security standards and guidelines, including baseline control requirements, for implementation on federal information systems under the Federal Information Systems Management Act of 2002 (“FISMA”). The revised version will still apply only to federal systems when finalized, but one of the stated objectives of the revised version is to make the cybersecurity and privacy standards and guidelines accessible to non-federal and private sector organizations for voluntary use on their systems.  Continue Reading

A Summary of the Recently Introduced “Internet of Things (IoT) Cybersecurity Improvement Act of 2017”

On August 1, 2017, a bipartisan group of Senators introduced legislation (fact sheet) that would establish minimum cybersecurity standards for Internet of Things (“IoT”) devices sold to the U.S. Government. As Internet-connected devices become increasingly ubiquitous and susceptible to evolving and complex cyber threats, the proposed bill attempts to safeguard the security of executive agencies’ IoT devices by directing executive agencies to include specified clauses in contracts for the acquisition of Internet-connected devices.

The bill’s provisions leverage federal purchasing power to improve the security of IoT devices by requiring, among other things, IoT device, software, and firmware providers to certify compliance with specified security controls and requirements relating to vulnerability patching and notification, unless such contractors otherwise satisfy one of three waiver requirements.

The bill also directs the Department of Homeland Security (“DHS”) to issue vulnerability disclosure guidance for government contractors; to amend federal statutes, specifically the Computer Fraud and Abuse Act (“CFAA”) and Digital Millennium Copyright Act (“DMCA”), to exempt certain “good faith” activities by cybersecurity researchers; and require all executive branch agencies to maintain an inventory of IoT devices active on their networks.

In addition, the statute would require the Director of the Office of Management and Budget (“OMB”) to issue guidelines to federal agencies consistent with the bill within 180 days of enactment.

The bill is summarized below. Continue Reading

Protecting Intellectual Property as Government R&D Funding Rises

The U.S. Government’s research and development (“R&D”) spending is on the rise.  For instance, the U.S. Government spent $139 billion in on R&D in FY 2015 and approximately $148 billion in FY 2016.  It is slated to spend as much as $154 billion on R&D in FY 2017.  With this funding comes great opportunities for commercial companies, government contractors, and grant recipients to receive funding to support cutting-edge research.  That said, before entering a contract, grant, cooperative agreement, or other type of funding agreement, entities should consider carefully the risks associated with using government funds to support research.  The most recent issue of Landslide (a publication of the American Bar Association’s Section of Intellectual Property Law) details these risks and provides an overview of measures that entities may take to benefit from government funding, while securing the greatest rights possible in any resulting data or inventions.  As discussed in the article, entities should take measures to segregate government-funded research, carefully vet requests for proposals to assess intellectual property clauses, and properly mark deliverables.  Additionally, entities should implement appropriate procedures to ensure inventions are timely disclosed to the government and title to such inventions is elected.  Entities considering accepting government funding and those already engaged in government-funded research would be well advised to consider these and the other topics discussed in the article.  The article can be found here.

Six Takeaways from President Trump’s Executive Order on Assessing Manufacturing and the Defense Industrial Base

[This article was originally published in Law360.]

On July 21, 2017 – and during “Made in America Week” – President Trump issued Executive Order 13806 on “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States” (the “Manufacturing EO”).  The Manufacturing EO sets forth a policy stressing the importance of having a “healthy” domestic “manufacturing and defense industrial base and resilient supply chains” to meet “national security” needs.  This policy comes on the heels of President Trump’s April 2017 “Buy American and Hire American” Executive Order (the “Buy American EO”), which announced a policy and action plan to increase U.S. manufacturing capabilities by “maximiz[ing]” the Federal Government’s procurement of “goods, products, and materials produced in the United States.”

The Manufacturing EO calls for a sweeping review and assessment of the strengths and weaknesses of the defense industrial base (“DIB”) and supply chains, and cites the need for the United States “to surge in response to an emergency.”  This review stems from the Administration’s stated conclusion that the “manufacturing capacity and defense industrial base of the United States have been weakened by the loss of factories and manufacturing jobs.”  Although a report on this review is not due until April 2018, the Manufacturing EO’s underlying policies and reporting requirements offer contractors an important glimpse into the Trump Administration “America First” vision and potential impacts on federal procurement.

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Senate Committee Directs DoD to Reduce Drug Prices

In its Report on the National Defense Authorization Act for Fiscal Year 2018, the Senate Armed Services Committee (the “Committee”) included an “Item of Special Interest” directing the DoD to exercise its rights under the Bayh-Dole Act “to authorize third parties to use inventions that benefited from DOD funding whenever the price of a drug, vaccine, or other medical technology is higher in the United States” as compared to prices in foreign countries.  This directive does not have the force of law, and was included as an item of special interest after an amendment to incorporate the clause into the NDAA failed.  However, it represents an example of efforts to use the Bayh-Dole Act to influence drug product pricing.  Continue Reading

Department of State Releases 2017 TIP Report

The Department of State has released its 2017 Trafficking in Persons (“TIP”) Report.  As with prior versions of the annual report, the State Department reviewed efforts made by more than 180 countries to address the minimum Prosecutorial, Protective, and Preventative standards necessary for effective anti-trafficking measures, as these standards are outlined in the United States’ Trafficking Victims Protection Act (“TVPA”).

The release of the report is notable because it can directly impact contractors’ diligence obligations for supply chain review under the Federal Acquisition Regulation (“FAR”) Human Trafficking Rule (located at FAR § 52.222-50).  As we have highlighted in previous articles, for those contractors required to submit compliance plans to the government, such plans should be appropriately shaped to the “nature and scope of activities to be performed for the Government . . .  and the risk that the contract or subcontract will involve services or supplies susceptible to trafficking in persons.”  See FAR § 52.222-50(h)(2)(ii).  Additionally, as set forth in a recent proposed memorandum, which remains the clearest articulation of the government’s views on supply chain diligence obligations to date (covered in a prior post), contractors are expected to take steps to “identify high-risk portions of [their] supply chain[s].”

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