The Department of Defense is seeking early input on implementation of the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (the “FY2023 NDAA”) in the Federal Acquisition Regulation and Defense Federal Acquisition Regulation. Although this early engagement process will not replace the formal rulemaking process, it presents a significant opportunity for government contractors, technology providers, industry associations, and other interested parties to provide their perspectives on acquisition-related provisions of this year’s NDAA. Providing early input can ensure that industry’s perspective is heard. Indeed, providing input at this stage may impact the future rulemaking process by guiding areas of focus and influencing ways the rule makers ask for input during the rulemaking process.
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NDAA
FY2023 NDAA Makes Notable Changes to FedRAMP Program
On December 23, 2022, President Biden signed the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (the “FY2023 NDAA”) into law. As described in Covington’s Client Alert, FY23 NDAA: Provisions of Interest for Almost All Government Contractors, the FY23 NDAA contains provisions of interest for almost all U.S. Government contractors. One provision likely to be of particular interest to U.S. contractors who provide or plan to provide cloud computing services to the U.S. Government is the FedRAMP Authorization Act (the “Act”), which codifies the Federal Risk and Authorization Management Program (“FedRAMP”).
Of note, the Act creates a “presumption of adequacy” that cloud providers with authorization from one agency can use that authorization with other agencies. This is an expansion compared to the current process which allows authorizations by the FedRAMP Joint Authorization Board, but not authorizations from individual agencies, to serve as the basis for an agency’s own authorization process. It also creates the Federal Secure Cloud Advisory Committee, comprised of 15 members of the public and private sector, to provide recommendations regarding FedRAMP and the acquisition of cloud services more generally.…
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July 2022 Developments under President Biden’s Cybersecurity Executive Order
Posted in Cybersecurity
This is the fifteenth in a series of Covington blogs on implementation of Executive Order 14028, “Improving the Nation’s Cybersecurity,” issued by President Biden on May 12, 2021 (the “Cyber EO”). The first blog summarized the Cyber EO’s key provisions and timelines, and the subsequent blogs described the actions taken by various Government agencies to implement the Cyber EO from June 2021 through June 2022. This blog describes key actions taken to implement the Cyber EO during July 2022.…
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New DFARS Clauses Require Defense Contractors to Disclose Work Performed in China
On August 25, 2022, the Department of Defense (“DOD”) published — with immediate effect — two new Defense Federal Acquisition Regulation Supplement (“DFARS”) clauses requiring defense prime contractors and subcontractors disclose any work in China on certain DOD contracts. Under the interim rule, the DOD is prohibited from awarding or extending certain new contracts if a contractor fails to disclose its use of workers in China in performance of a covered DOD contract. Although there is no prohibition on DOD awarding a covered contract to an entity that makes a disclosure, the Department can rely on a variety of authorities to exclude certain contractors and products that represent supply chain risks, especially if the products or services involve information technology.…
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New Final Rule Replaces “Commercial Item” Definition and Implements Definitions for “Commercial Products” and “Commercial Services”
By Scott A. Freling & Brooke Stanley on
Earlier today, the FAR Council issued a final rule revising the FAR definition of “commercial item.” The final rule effectively splits the prior definition of “commercial item” into separate definitions for “commercial product” and “commercial service,” without making substantive changes to the existing definitions. The final rule also replaces references to “commercial items” throughout the FAR with corresponding references to “commercial products,” “commercial services,” or both, as appropriate.
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New Section 889 Restrictions Included in Updated Uniform Guidance Regulations from the Office of Management and Budget
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. …
“Section 889” Prohibition on “Use” of Covered Telecommunications Equipment by Federal Contractors Released as an Interim Rule
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…
Section 889 Update: First Wave of Acquisition Prohibitions Take Effect
By Susan B. Cassidy on
Posted in Supply Chain
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.
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House and Senate Will Debate Bid Protest Policy
By Jay Carey on
Posted in Bid Protests, Defense Industry
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.
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Takeaways from DoD’s Proposed Changes to Certain Sourcing Restrictions
By Scott A. Freling on
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.
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