This blog continues Covington’s review of important deadlines and milestones in implementing the Executive Order on Improving the Nations’ Cybersecurity (E.O. 14028, or the “Cyber EO”) issued by President Biden on May 12, 2021.  Previous blogs have discussed developments under the Cyber EO in June 2021 and July 2021.  This blog focuses on developments affecting the EO that occurred during August 2021.

The Cyber EO requires federal agencies to meet several important deadlines in August 2021.  These deadlines are in the areas of enhancing critical software supply chain security, improving the federal government’s investigative and remediation capabilities, and modernizing federal agency approaches to cybersecurity.  In addition, the National Institute of Standards and Technology (“NIST”) took several significant actions related to supply chain security in August 2021, not all of which were driven by deadlines in the Cyber EO.  This blog examines the actions taken by federal agencies to meet the EO’s August deadlines as well as the NIST actions referred to above.Continue Reading August 2021 Developments Under President Biden’s Cybersecurity Executive Order

The world has been almost singularly focused on the 2019 coronavirus for more than 18 months now, but the fact remains that we still face an array of other known pathogens with pandemic potential and any number of unknown pathogens that could pose a similar risk.  These threats have periodically been an area of congressional focus since the 2009 H1N1 influenza pandemic, and most recently a bill for the Disease X Act would renew this focus and direct it at new, currently unknown viral threats.  The bill is poised to be a key piece of legislation in ongoing and future biodefense initiatives and pandemic preparedness.
Continue Reading The Next Pandemic: New Bill Looks Ahead to Counteract Novel Threats

The FAR explains that the Government must accept or reject work as “promptly as practicable after delivery.”  FAR 52.246-2(j).  But what if the contractor knows its work is not compliant, but has asked the agency for a deviation from the contract’s terms?  A recent decision from the ASBCA provides guidance on this tough but not uncommon issue.
Continue Reading Accepting What You Can’t Change: ASBCA Holds that an Agency Must Accept Non-Conforming Goods After Waiting to Consider a Deviation

The government is moving forward with further changes to Buy American Act (“BAA”) regulations.  But based on yesterday’s public meeting to discuss the July 30 notice of proposed rulemaking (“NPRM”) to revise existing BAA regulations, it remains to be seen exactly where those changes are headed.

As discussed in our prior client alert, the NPRM implements Executive Order 14005 (“Ensuring the Future Is Made in All of America by All of America’s Workers”) by proposing three major changes to existing BAA regulations: (1) higher domestic content thresholds; (2) enhanced price preferences for “critical” items and components; and (3) new domestic content reporting requirements for “critical” items and components.  The agenda for the public meeting covered each of these changes, as well as other questions raised in the NPRM related to BAA waivers and exceptions.Continue Reading Buy American Act Update: FAR Council Holds Public Meeting on New Proposed Rule

The employee non-competition agreement landscape continues to evolve rapidly, with several states enacting new limits on the use of non-competition agreements between employers and employees.  Once a valuable tool for employers to protect their businesses from unfair competition, loss of customers, or misuse of company confidential information, many states have increasingly limited the enforceability of such agreements.

The federal government is now weighing in on the appropriate use of non-competition agreements between employers and employees.  President Biden’s July 9, 2021 Executive Order asks the Federal Trade Commission (“FTC”) to limit such agreements—signaling a potential expansion of federal regulation of agreements between employers and workers.  And a pending Senate bill would ban most non-competition agreements.  Given these developments, government contractors and other employers should assess whether their use of these agreements with employees is consistent with recent state developments and aligned with the broader trend toward limiting the enforceability of these agreements.Continue Reading Recent Federal and State Laws Restrict Use of Employee Non-Competition Agreements by Government Contractors and Other Employers

On May 12, 2021, the Biden Administration issued an Executive Order on Improving the Nation’s Cybersecurity (the “EO”).  The EO sets out a list of deliverables due from a number of governmental entities in June 2021 and successive months.  Our overall summary of the EO and its deliverables can be found here, and our discussion of the EO deliverables that were due in June 2021 can be found here.  This blog addresses the EO deliverables in July 2021.
Continue Reading July 2021 Developments Under the Executive Order on Improving the Nation’s Cybersecurity

Government contractors should take note of the Fifth Circuit’s June 30, 2021 decision in Taylor Energy Co. v. Luttrell, which reaffirmed that contractors can enjoy a broad immunity from third-party liabilities—known as “derivative sovereign immunity,” or “Yearsley immunity.” Yearsley immunity emanates from Yearsley v. W.A. Ross Const. Co., an 80-year-old Supreme Court decision, which established that a contractor is immune when (i) it performed acts pursuant to a valid authorization of Congress and (ii) the contractor did not exceed the scope of that authority.

In Taylor Energy, the court dismissed claims arising out of an oil spill containment project in the Gulf of Mexico. The basic claim in the suit was that the contractor failed to effectively remediate and contain the oil. The Fifth Circuit found that the government: (i) provided direction to the contractor through the statement of work, in the form of “goals” and specific contract deliverables and deadlines; and (ii) periodically met with the contractor and reviewed and approved the work during performance. Based on these core facts, the court held the contractor was immune. The court held that it was irrelevant that the statement of work was “barebones,” and that the contractor—rather than the government—designed certain elements of the remediation effort. Following the Fourth Circuit’s 2018 decision in Cunningham v. GDIT, the Taylor Energy decision is another appellate court victory for contractors in the wake of the Supreme Court reaffirming Yearsley’s core principles in Campbell-Ewald Co. v. Gomez.Continue Reading Fifth Circuit Reaffirms Breadth of Yearsley Immunity For Government Contractors

Last month, the Biden administration released its report on the results of its 100-day review of U.S. supply chains for critical products:  “Building Resilient Supply Chains, Revitalizing American Manufacturing, and Fostering Broad-Based Growth” (the “Report”).  Alongside the Report’s slate of policy recommendations, the Biden administration also announced immediate actions to strengthen supply chains and stimulate domestic competitiveness.

The Report is the result of President Biden’s February 24 “Executive Order on America’s Supply Chains” (the “Order”), which directed federal departments and agencies to conduct a review of supply chain risks in four critical product areas,[1] including pharmaceuticals and active pharmaceutical ingredients (“APIs”).  The Report and its recommendations further the Biden administration’s broader goal of rebuilding the U.S. industrial base, reducing reliance on foreign competitors, and bolstering national and economic security.

The U.S. Department of Health and Human Services (“HHS”) led the review of the supply chain for pharmaceuticals and APIs, which focused primarily on drugs, in particular small-molecule drugs and therapeutic biological products.  The Report makes a number of recommendations discussed herein that have the potential to impact pharmaceutical companies’ business plans and generate significant opportunities, though many such recommendations are long-term and will require dedicated funding so the actual impact of the Report’s suggestions remains to be seen.
Continue Reading Biden Administration 100-Day Supply Chain Assessment: Insights for Pharmaceutical Manufacturers

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.Continue Reading The End of CSP and PRC Requirements? — GSA’s TDR Pilot Program Faces Further Internal Criticism

On May 12, 2021 the Biden Administration issued an “Executive Order on Improving the Nation’s Cybersecurity” (EO).  Among other things, the EO sets out a list of deliverables from a variety of government entities.  A number of these deliverables were due in June, including a definition of “critical software,” the minimum requirements for a software bill of materials, and certain internal actions imposed on various federal agencies.
Continue Reading June 2021 Developments Under the Executive Order on Improving the Nation’s Cybersecurity