The Trump Administration has declared this month National Slavery and Human Trafficking Prevention Month, calling on industry associations, law enforcement, private businesses, and others to work toward ending modern slavery and human trafficking. This proclamation follows the Administration’s efforts to combat human trafficking, which we have previously discussed here, and comes on the heels of an OMB memorandum released last fall aimed at “enhanc[ing] the effectiveness of anti-trafficking requirements in Federal acquisition while helping contractors manage and reduce the burden associated with meeting these responsibilities.”

Continue Reading Trump Administration Renews Focus on Anti-Human Trafficking Efforts

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].”


Continue Reading Department of State Releases 2017 TIP Report

Last Thursday, President Trump and his senior advisors met with representatives of organizations committed to fighting human trafficking. As reported by several news outlets (e.g., AP, NYT, and Reuters), the President stated during the meeting that he would commit the “full force and weight” of the U.S. government against what he views as an “epidemic” of human trafficking around the world.  He explained that he would “direct the Department of Justice, Department of Homeland Security, and other federal agencies that have a role in preventing human trafficking to take a hard look at the resources and personnel that they are currently devoting to this fight.”  He noted that these agencies “are devoting a lot, but we are going to be devoting more.”  The next day, President Trump appeared to reiterate his commitment on Twitter.

Continue Reading Trump’s Commitment Against Human Trafficking Brings Greater Uncertainty for Contractors

On December 7, the Office of Management and Budget, the Department of Labor, and the Office to Monitor and Combat Trafficking in Persons in the Department of State, issued a proposed memorandum titled “Anti-Trafficking Risk Management Best Practices & Mitigation Considerations.”  The document is intended, at least in part, to “promote clarity and consistency in the implementation of anti-trafficking requirements” imposed by Executive Order 13627, Title XVII of the FY 2013 National Defense Authorization Act, and the implementing regulatory provisions applicable to all federal contractors at FAR 22.17 and FAR 52.222-50.  Although the guidance document is in draft form, it is important for contractors to consider closely because it (1) outlines the government’s contemplated expectations on anti-trafficking risk mitigation, and (2) informs agencies that they may immediately take the contents of the memorandum “into consideration in applying the anti-trafficking requirements in the Federal Acquisition Regulation.”

In addition to reiterating the basic requirements of the anti-trafficking FAR rule (which we have covered in other posts), the memorandum outlines a series of “best practices and mitigation considerations” designed to inform contracting officers’ assessments of whether contractors are effectively carrying out their compliance responsibilities.  Although the guidance states that it is “not intended to augment or otherwise change existing regulatory requirements,” it does specify that, in the event the government becomes aware of a trafficking violation, a contractor’s compliance with the practices identified in the guidance are to be construed as mitigating considerations weighing in the contractor’s favor.  
Continue Reading New Guidance on Contractor Risk Management Under the Human Trafficking Rule Released

In a span of two days, two separate agencies took action against contractor policies and agreements that may discourage whistleblowers.  On March 30, 2015, the U.S. Department of State Office of Inspector General (“State OIG”) issued a report contending that certain contractor policies and agreements have a “chilling effect” on whistleblowers.  On April 1, 2015, the Securities and Exchange Commission (“SEC”) imposed a fine of $130,000 on a contractor for requiring confidentiality agreements that allegedly impede individuals from disclosing securities law violations.   Given recent scrutiny, contractors should consider reviewing policies, procedures, forms, agreements, or practices that may impede employees’ ability to report instances of fraud, waste, and abuse.

As we discussed recently, the SEC’s April 1 order was based on a violation of SEC Rule 21F-17, which prohibits “imped[ing] an individual from communicating directly with [the SEC] about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement. . . .”  The contractor that received the fine required employees to sign a confidentiality agreement after discussions in internal investigations.  Specifically, the confidentiality agreement prohibited employees from “discussing any particulars regarding this interview and the subject matter discussed during the interview, without the prior authorization of the Law Department.”  The SEC found that this provision, coupled with a statement that such impermissible disclosures may be grounds for termination, violated Rule 21F-17, even though it was not aware of any evidence that the provision had been enforced.

State OIG similarly took issue with certain contractor confidentiality agreements and policies.  State OIG, in analyzing the practices of the 30 largest State Department contractors, faulted 13 contractors for having policies that have “a chilling effect on employees who wish to report fraud, waste, or abuse. . . .”  Specifically, State OIG criticized policies instructing employees to “consult with the Legal Department” or their supervisor before answering government investigators’ questions or handing over documents, or requiring consultants receiving subpoenas or other judicial demands for contractor confidential information to provide “prompt written notice” to the contractor in order to permit the contractor from seeking a protective order.  State OIG also flagged separation and employment agreements that may have the same “chilling effect”—citing agreements prohibiting statements that could be “derogatory or detrimental to the good name or business reputation” of a contractor.


Continue Reading SEC and State OIG Allege that Contractors’ Policies, Procedures, and Agreements Suppress Whistleblowing

As federal spending for Operation Inherent Resolve surpasses the $1 billion mark, the U.S. military campaign against ISIS forces in Iraq and Syria has a new oversight team.  Late last month, the Honorable Jon T. Rymer, Inspector General for the Department of Defense (“DoD”), was designated lead inspector general (“IG”) for this overseas contingency operation.  Mr. Rymer is the first lead IG designated in response to an amendment to the Inspector General Act (“the Act”).  As required by the Act, he will oversee this mission in conjunction with the Department of State and the Agency for International Development (“AID”) Offices of Inspector General.

In the past, special IG offices have provided oversight to overseas contingency operations, such as the reconstruction efforts in Iraq and Afghanistan.  These oversight bodies can have positive implications for government contractors performing in these regions.  For instance, as we have discussed previously, a Special Inspector General for Afghanistan Reconstruction (“SIGAR”) report found that the Afghan government levied nearly a billion dollars of tax on contractors supporting the mission in Afghanistan despite bilateral agreements negotiated between the U.S. and Afghan governments that exempted the contractors from at least some of the levied taxes.
Continue Reading First Lead IG Designated Under Amended Inspector General Act

Yesterday, President Barack Obama signed into law a $1.1 trillion appropriations act that allocates approximately $5.4 billion in emergency funding to support the U.S. Government’s response to the Ebola outbreak in West Africa.  Although this funding falls short of the Administration’s initial $6.18 billion request—approximately $1.54 billion of which was to be allocated to a contingency fund similar to appropriations made in response to pandemic influenza—all emergency funding for Ebola provided by the act is available for immediate use.  The funding is split between the Department of Health and Human Services (“HHS”), the Department of Defense (“DoD”), the Department of State, and the Agency for International Development (“AID”).  Government contractors and grant recipients can expect these agencies to use their respective shares of the funding to create a number of opportunities in the coming months.

Continue Reading President Signs Act Authorizing $5.4 Billion in Emergency Funding to Combat Ebola