On August 13, 2020, the Office of Management and Budget (OMB) released new revisions to its Guidance for Grants and Agreements set forth under 2 CFR (commonly referred to as the Uniform Guidance). The Uniform Guidance governs the terms of federal funding issued by agencies, including grants, cooperative agreements, federal loans, and non-cash assistance awards.
On July 10, 2020, the interim rule implementing Section 889(a)(1)(B) of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (Pub. L. No. 115-232) was released by the U.S. Government’s Federal Acquisition Regulatory Council. Section 889 prohibits the U.S. Government from buying (as of August 2019)—or contracting with an entity that uses…
The FAR Council released an Interim Rule in August implementing part of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019. In this briefing, we highlight points where the Interim Rule provides clarity; definitional issues that remain unresolved; and new procedural requirements that government contractors should track.
The Interim Rule covers the portion of Section 889, subsection (a)(1)(A), that prohibits the federal government from acquiring certain telecommunications equipment/services from Huawei, ZTE, and other Chinese companies. Specifically: “The head of an executive agency may not … procure or obtain or extend or renew a contract to procure or obtain any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.”
Section (a)(1)(A) took effect on August 13, 2019, although a 60-day window remains open for stakeholders to submit comments to be considered in the development of a final rule. Comments on the (a)(1)(A) Interim Rule are due by October 15, 2019.
The second part of Section 889 implementation, sections (a)(1)(B) and (b)(1), go into effect on August 13, 2020. Regulations for those sections remain pending within the government, but the definitions and waiver process established by (a)(1)(A) will be instructive for those regulations as well.…
Continue Reading Section 889 Update: First Wave of Acquisition Prohibitions Take Effect
The House of Representatives passed its version of the FY2020 National Defense Authorization Act (“NDAA”) last week. The headline story was the remarkably close, party-line vote: in contrast to past years, the bill received no Republican votes, and eight Democratic Members voted against it.
Those partisan dynamics obscured the inclusion of two important amendments – one Republican and one Democratic – regarding bid protest policy that the House quietly adopted in its bill. The provisions are not yet law, since the House and Senate must still resolve differences in their respective NDAAs through the conference process. In this post, we summarize these provisions and encourage government contractors to watch them closely in the coming months.…
Continue Reading House and Senate Will Debate Bid Protest Policy
Pursuant to Sections 817 and 881(b) of the FY 2017 National Defense Authorization Act (“NDAA”), the Department of Defense (“DoD”) recently issued a proposed rule to amend certain sourcing restrictions found in DFARS subpart 225.70 and related clauses. Specifically the proposed rule would amend the DFARS to:
- extend the Berry Amendment’s domestic sourcing restrictions to the acquisition of certain athletic footwear for members of the Armed Forces, when the procurement is valued at or below the simplified acquisition threshold [Section 817], and
- recognize that Australia and the United Kingdom of Great Britain and Northern Ireland (the “UK”) are now members of the National Technology Industrial Base (“NTIB”), thereby permitting the United States to acquire certain items (that are subject to the sourcing restrictions in 10 U.S.C. 2534) if they are manufactured in the UK, Australia, Canada or the United States [Section 881(b)].
We provide our takeaways below.…
Continue Reading Takeaways from DoD’s Proposed Changes to Certain Sourcing Restrictions
[This article was originally published in Law360 and has been modified for the blog.]
Over the summer, pursuant to Section 874 of the FY 2017 National Defense Authorization Act (“NDAA”), the Department of Defense (“DoD”) issued a proposed rule to exclude the application of certain laws and regulations to the acquisition of commercial items, including commercially available off-the-shelf (“COTS”) items. Among other things, the proposed rule identifies certain DFARS and FAR clauses that should be excluded from commercial item contracts and subcontracts, and sets forth a narrower definition of “subcontract” that would carve out a category of lower-tier commercial item agreements from the reach of certain flow-down requirements. A summary of the proposed rule and our key observations/takeaways are below.…
Continue Reading Takeaways From DoD’s Proposed Changes to Commercial Item Contracting
For the first time in several years, the version of the FY 2019 National Defense Authorization Act (NDAA) that just passed the Senate does not contain any major reforms to limit bid protests. But the bill the Senate sent to the conference committee process does contain two provisions aimed at bid protests. Although they are minor, they portend and may lay the groundwork for future attempts to change the protest process. Both provisions call for further study of issues addressed in the RAND Corporation’s January 2018 bid protest report.…
Continue Reading Senate Largely Leaves Bid Protests Alone in Passed Version of FY 2019 NDAA After Threatening Major Revisions
[Updated August 13, 2018]
If an agreement qualifies as a “subcontract” under a government contract, then it may be subject to certain flow-down, compliance, and reporting requirements. These requirements are intended to protect the government’s interests, and have significant ramifications for contractors, e.g., increasing transaction costs, expanding potential areas of exposure. These compliance obligations and risks can even deter some companies from performing under government contracts, especially those companies offering commercial items.
Currently, there is no uniform definition of “subcontract” in the applicable procurement regulations or in the procurement chapters under Titles 10 and 41 of the U.S. Code. Indeed, there are more than twenty varying definitions of “subcontract” in the FAR and DFARS, with many clauses failing to specify which definition applies. Now Congress is looking to address this lack of uniformity through the FY 2019 National Defense Authorization Act (NDAA).
Last week, the RAND Corporation published a report entitled “Assessing Bid Protests of U.S. Department of Defense Procurements: Identifying Issues, Trends, And Drivers.” In it, RAND analyzed the prevalence and impact of bid protests of U.S. Department of Defense (“DoD”) acquisitions, and concluded that DoD bid protests are both “exceedingly uncommon” and, on the whole, effective in prompting DoD to take remedial actions to address issues identified in the protests. The report, which was commissioned by Congress in Section 885 of the 2017 National Defense Authorization Act (“NDAA”) Pub. L. No. 114-238, is expected to be a driver of changes to the protest process, and includes several recommendations counseling against significant changes that appear to be favorable to protesters.…
Continue Reading RAND Report Concludes That Protests of Department of Defense Procurements Are Rare, Effective
As we reported late last month, one-third of the Senate Democratic caucus doubled down on efforts to keep “Buy American” protections intact for certain defense items. Now Senate Democrats are declaring a “Buy American” victory as the FY 2018 NDAA conference report revealed that some of these protections will remain.…
Continue Reading Senate Democrats Notch a “Buy American” Victory