On Monday, GAO issued its Bid Protest Annual Report to Congress for Fiscal Year 2017.  Most notably, the effectiveness rate hit 47%.  The effectiveness rate looks at all cases filed, and measures the percentage of cases in which a protester obtains some relief, whether through a sustain by GAO or voluntary corrective action by the agency.

That’s right:  Protesters obtained relief in almost half of all protests last year.  And this year’s 47% effectiveness rate is a new all-time high — continuing a steady upward march over the past several years.  When GAO began measuring the sustain rate in 2001, it was just 33%.  By 2008, it had risen to 42%.  It then held pretty steady through 2012, but has been rising since:Continue Reading GAO’s Annual Report: Protests Are Down, But Their Effectiveness Is Up

Over the last year, we have reported extensively on various government contract decisions regarding contract releases. In Sylvan B. Orr v. Department of Agriculture, CBCA 5299 (Sep. 29, 2017), the Civilian Board of Contract Appeals (“CBCA” or “Board”) published yet another notable opinion on this topic. This decision demonstrates why it is critical to reserve your rights regarding potential claims sparked by conduct that occurs before a release of claims provision is signed—even when the additional costs at issue are not incurred until after the release is executed.
Continue Reading Left Holding the Bag: Release Provision Precludes Recovery for Costs Incurred Post-Release

As we reported last month, four Senate Democrats published an article about “strengthen[ing]” the U.S. Government’s “Buy American policies” through certain proposed amendments to the FY 2018 National Defense Authorization Act (“NDAA”). Although most of the proposed “Buy American” amendments were left out of the version of the bill that was sent to conference, 16 Senate Democrats – including Senators Tammy Baldwin (WI), Debbie Stabenow (MI), Al Franken (MN), Chris Murphy (CT) and Elizabeth Warren (MA) – are now doubling down on their efforts to remove a section in the Senate-passed FY 2018 NDAA that would eliminate “Buy American” protections for certain defense items.
Continue Reading Senate Democrats Double Down on “Buy American”

Under Chevron U.S.A. v. NRDC and its progeny, courts show great deference to administrative agencies’ interpretations of statutes and regulations.  However, it does not necessarily follow that courts will provide that same deference to agencies’ interpretations of government contracts.  Last week, in a statement respecting the denial of certiorari in Scenic America, Inc. v. Dept. of Transportation, Supreme Court Justice Neil Gorsuch pointed out this distinction and raised an issue that merits further judicial attention.
Continue Reading Government Contracts and Chevron Deference: Justice Gorsuch Weighs In

Construction contractors take note: the government contractor defense is alive and well in the Fifth Circuit. In Sewell v. Sewerage and Water Board of New Orleans, the Fifth Circuit recently confirmed that construction companies can successfully assert the government contractor defense in response to tort lawsuits that arise from their performance of federal public works and infrastructure projects. This is a welcomed decision in the Fifth Circuit, which had signaled in recent years that a higher level of proof may be required to establish the first element of the defense ─ i.e., that the government meaningfully reviewed and approved reasonably precise specifications for the allegedly defective construction feature.

The Sewell case illustrates that ─ with the right litigation strategy and a skillfully crafted evidentiary record ─ construction contractors may well prove the defense in cases involving even “rudimentary or general construction features.”
Continue Reading Construction Contractors: The Government Contractor Defense is Alive and Well in the Fifth Circuit

Last year, the Supreme Court’s watershed Escobar ruling altered the landscape of False Claims Act litigation when it declared that the FCA’s materiality requirement presented a “demanding” barrier to plaintiffs alleging contractual non-compliance. In the 15 months since that time, lower courts have issued a steady stream of rulings interpreting and refining this standard. In the latest—and perhaps most consequential—of these rulings, the Fifth Circuit overturned a $663 million FCA jury award on materiality grounds in the bellwether case of U.S. ex rel. Harman v. Trinity Industries, Inc. While the outcome may not be a surprise given the trend in recent decisions addressing the FCA’s materiality requirement—not to mention an earlier Fifth Circuit ruling involving a strikingly similar issue—Trinity serves as a forceful reminder of the formidable barrier to recovery presented by the materiality requirement.
Continue Reading Trinity: Divine Fifth Circuit Ruling Gives FCA Defendants Reason for Praise

In Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the Supreme Court changed the landscape for False Claims Act litigation. The Court endorsed implied certification liability, but set a high bar for demonstrating the materiality of a violation of law, regulation, or…
Continue Reading Introducing Covington’s Escobar Tracker

On September 21, 2017, the Director of the Defense Pricing/Defense Procurement and Acquisition Policy (DPAP) issued guidance to Department of Defense (DoD) acquisition personnel in anticipation of the December 31, 2017 date for contractors to implement the security controls of NIST Special Publication (SP) 800-171.  The guidance outlines (i) ways in which a contractor may use a System Security Plan (SSP) to document implementation of NIST SP 800-171; and (ii) provides examples of how DoD organizations could leverage a contractor’s SSP and related Plan of Action and Milestones (POA&M) in the contract formation, administration, and source selection processes.
Continue Reading DoD Issues Further Guidance on Implementation of DFARS Cyber Rule

On September 14, 2017, the Department of Defense issued a new class deviation that eliminates the requirement on major contractors to engage with the Government in technical interchange meeting prior to the generation of independent research and development (IR&D) costs.  This class deviation represents a continuing reversal in position for the Pentagon, which had been moving forward with placing more guiderails for IR&D spending.

The technical interchange meeting requirement was promulgated on November 4, 2016 and required that for IR&D costs to be allowable, major contractors must engage in technical interchange meetings with operational Department of Defense personnel so that “contractor plans and goals for IR&D projects benefit from the awareness of and feedback by a DoD Government employee who is informed of related ongoing and future potential interest opportunities.”  This rule generated significant industry concern that the Government would unduly interfere in independent research and development by becoming a de facto approval process.  After publication of the final rule, on December 1, 2016, DoD issued a class deviation  eliminating the requirement that the technical interchange occur “before IR&D costs are generated.”  Further addressing industry concerns, the Undersecretary for Defense for Acquisition, Technology, and Logistics issued a memorandum clarifying that although the DFARS rule required contractors to share their IR&D plans with DoD, the technical interchange meetings did not represent a government approval process for IR&D projects.
Continue Reading Pentagon Reverses Course and Rolls Back The IR&D Technical Interchange Rule

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.]Continue Reading Senate Democrats Look to Strengthen “Buy American” Policies and Requirements