Suspension & Debarment Update: Five Takeaways from the ISDC’s Annual Report

The government has released its long-awaited annual report on federal suspension and debarment activities, and the data reflect a number of trends and developments that should be of keen interest to federal contractors and grantees.  The report, which is published by the Interagency Suspension and Debarment Committee (“ISDC”), shows that suspension and debarment remain potent tools that are used frequently across the executive branch, even if the total number of exclusion actions dipped slightly from the previous year.  But more importantly, the report also demonstrates that federal agencies are adopting increasingly sophisticated approaches to managing suspension and debarment actions, a trend that presents both opportunities and potential pitfalls for the contracting community.  Below we highlight the five biggest takeaways from this year’s ISDC report.

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DOJ Issues New Guidance for Treatment of Confidential Information Under Recent Supreme Court FOIA Decision

Last month, the Department of Justice Office of Information Policy issued new guidance on the definition of confidential information under Exemption 4 of the Freedom of Information Act. This new guidance addresses the meaning of “confidential” in light of the Supreme Court’s decision in Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356 (2019). While not determinative, this DOJ Guidance offers contractors critical insight into how agencies will respond in the first instance to FOIA requests for information that may be subject to Exemption 4. This exemption protects “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.” 5 U.S.C. § 552(b)(4).

As covered in this space earlier this year, in Food Marketing Institute, the Supreme Court jettisoned 40 years of established FOIA case law on how agencies defined confidential under Exemption 4. It rejected the well-established “competitive harm” test from National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974) based on the lack of support in the statutory language. In its place, it adopted a “plain language” interpretation of confidential, finding two potential definitions: (1) information “customarily kept private, or at least closely held,” by the submitting party; and (2) information disclosed when the receiving party provides “some assurance that it will remain secret.” The Supreme Court held that the first condition was mandatory but expressly left open whether confidential information could lose that status if provided to the government “without assurances that the government will keep it private.” As a result, contractors and agencies alike were left without clear guidance as to whether, or when, a government “assurance” may be required. Continue Reading

A New Normal for Foreign Military Sales? Total Sales for FY 2019 Nearly Matches FY 2018

On October 15, 2019, the Defense Security Cooperation Agency (DSCA) announced that foreign arm sales for Fiscal Year (FY) 2019 totaled $55.4 billion.

This amount nearly matches the total from FY 2018 of $55.7 billion, continuing the significant increase in foreign arm sales under the Trump Administration and potentially signaling that the enormous 33 percent jump in sales from FY 2017 to FY 2018 may have established a new normal for U.S. arms exports.

Every October, DSCA announces the total sales arms sales of the U.S.  These totals include government-to-government sales under the Foreign Military Sales program as well as sales funded through the Foreign Military Financing program and other security cooperation and assistance agreements with partner nations.  These totals do not include direct sales from U.S. companies to foreign militaries that do not rely on U.S. government assistance.

The total foreign arms sales for the past six years are:

The large spike in sales in FY 2015 was attributed in large part to ramping up efforts to combat ISIS.  That isolated spike aside, the increase in arm sales in the past four years has been dramatic, with the increase in sales attributable primarily to increased foreign government spending (as opposed to U.S. assistance funding).

DSCA prefers to rely on three-year rolling averages, as annual sales figures can be skewed by specific geo-political events (such as the fight against ISIS in FY 2015) or a few high-value transactions (such as the sale of F-15s to Qatar and F/A-18s to Kuwait during FY 2012).  With two consecutive years of sales around $55 billion, we may now be seeing a new normal for foreign arms sales.  Of course, many factors could impact foreign arms sales moving forward, including fluctuations in energy prices and increased scrutiny by Congress, but it appears for now that robust U.S. arms exports will continue.

How Much Is Enough? Federal Circuit Appeal May Decide Level of U.S. Manufacturing Required Under the TAA

A long-standing dispute over the approach to country of origin determinations under the Trade Agreements Act (“TAA”) may soon be resolved, as the Federal Circuit recently heard oral argument in one of two cases presently examining key aspects of this statute.  Among other questions presented, the court may decide the standard for determining whether a product may be considered a U.S.-made end product — a question that could have far reaching implications for product manufacturers across all industries.

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Flying in Friendly Skies: An In-Depth Look at the FAA’s Unique Bid Protest Forum

Federal contractors usually think of two bid protest forums: the Government Accountability Office and the U.S. Court of Federal Claims.  But another protest forum often flies under the radar: the Federal Aviation Administration’s Office of Dispute Resolution for Acquisition — aka the ODRA.

In a continuation of our blog post earlier this year, we take an in-depth look at the ODRA’s bid protest process in this new Briefing Paper.

Lowest Priced Technically Acceptable Procurements Are Less and Less Acceptable: Proposed FAR Rule Further Continues Shake-Up of LPTA Procurements

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.)

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GSA’s E-Commerce Portal Program Is Here: What the New Solicitation Means for Government Contractors

After nearly two years of planning, GSA has released an RFP seeking prototypes of online shopping portals that would allow federal customers to buy COTS items from their computers.

GSA’s plan implements Section 846 of the NDAA for FY 2018, which instructed the agency to create an internet marketplace exempt from many standard procurement regulations.  As we have previously discussed in this blog, GSA began planning in 2017, sought input from industry in 2018 and 2019, and the announced earlier this year that it would proceed with proofs of concept. But while the new solicitation was a long time coming, GSA clearly is ready to move quickly: contractors will have less than a month before the proposal deadline to digest the solicitation and assess how its terms might affect their business approach, data rights, and competitive standing.

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Blowing the Whistle on a Breach of Contract? D.C. Circuit Addresses Scope of FCA’s Anti-Retaliation Rules

The False Claims Act has long protected relators from retaliation for preparing a qui tam complaint.  But what if an employee “blows the whistle” on a garden-variety problem — for instance, a laboratory that she believes is falling short of standards in a federal funding agreement?

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Lowest Priced Technically Acceptable Procurements Not Always Acceptable: New DFARS Rule Continues Shake-Up of LPTA Procurements

On September 26, 2019, the Department of Defense issued a final rule amending the Defense Federal Acquisition Regulation Supplement to establish new restrictions on the use of Lowest Price Technically Acceptable source selection procedures.  Effective October 1, 2019, this new rule imposes specific limitations and prohibitions governing when and under what circumstances LPTA procedures are appropriate for a particular procurement.  The new rule has the potential to expand — and provide a more definite legal framework for — pre-award bid protests challenging the use of LPTA source selection procedures.

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CISA Information and Communications Technology Supply Chain Risk Management Task Force Issues New Interim Report

The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency’s (“CISA”) Information and Communications Technology (“ICT”) Supply Chain Risk Management Task Force (the “Task Force”) recently released an interim public report.  The report describes the Task Force’s efforts over the last year to develop recommendations for securing the Government’s supply chain, and outlines the potential focus areas of each of its working groups over the coming year.

The report is particularly relevant to contractors that either sell ICT related products or services to the Government, or that sell ICT related components to higher tier contractors, because it offers some insight into potential supply chain risk management (“SCRM”) best practices, as well as requirements that the Government may seek to impose on contractors in the future. Continue Reading

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