Proposed Rule

On January 20, 2016, the FAR Council published a proposed rule calling for changes to FAR Parts 19 and 52 that address payments to small business subcontractors.  The proposed changes, which are intended to implement regulations adopted by the Small Business Administration (SBA) in 2013, will expand the range of small business-related obligations imposed on prime contractors.

The proposed rule stems from the Small Business Jobs Act of 2010, which, as noted in a previous post, called for regulations governing prime contractors’ compliance with their small business subcontracting plans.  Among the Act’s requirements was that prime contractors notify their contracting officer if they pay a “reduced price” or make an “untimely payment” to a small business subcontractor.  Although the SBA adopted regulations implementing this statutory directive in July 2013, the Far Council is taking on the task for the first time.Continue Reading FAR Council Adds New Layer to Small Business Subcontracting Rules

Last week, the Department of Defense (“DoD”) quietly withdrew its ill-received proposed rule on the evaluation of price reasonableness in commercial items acquisitions.  Issued on August 3, 2015, the Proposed Rule purported to provide guidance for evaluating the reasonableness of prices using data other than certified cost or pricing data.  As we previously reported, it fell short of this goal and, instead, increased confusion in the determination of price reasonableness for commercial goods that have been “offered for sale” but not sold.  It also adopted open-ended data provisions that arguably permit the agency to request almost unlimited information to substantiate the reasonableness of prices.
Continue Reading DoD Retreats on Evaluation of Price Reasonableness

On November 6, 2015, the Department of Veterans Affairs (“VA”) issued a proposed rule (the “Proposed Rule”) to clarify the byzantine verification process for veteran-owned small businesses (“VOSB”) and veteran-owned service-disabled veteran-owned small businesses (“SDVOSB”)1 who want to participate in the VA’s Veterans First Contracting Program.  VA Veteran-Owned Small Business Verification Guidelines, Proposed Rule, 80 Fed. Reg. 68,795 (to be codified at 38 C.F.R. Part 74). The Proposed Rule revises a 2013 advanced notice of proposed rulemaking and considers 39 public comments received in response to the prior notice.  Comments on the latest proposed rule are due on or before January 5, 2016.

Under the Veterans First Contracting Program, the VA offers set-asides and sole source opportunities to certified VOSB and SDVOSB firms.  Unfortunately, the program has struggled to gain a foothold in the government procurement landscape because its VA-administered regulations are confusing and the set-aside opportunities are limited to VA procurements.  At the same time, the Government Accountability Office and the VA’s Office of the Inspector General have targeted the program for pervasive fraud, and stakeholders have criticized the verification program as unnecessarily rigorous when compared against other socio-economic programs administered by the Small Business Administration (“SBA”).

As a result, through its Proposed Rule, the VA “seeks to find an appropriate balance between preventing fraud . . . and providing a process that would make it easier for more VOSBs to become verified.”  The VA attempts to strike this balance by significantly amending the VOSB ownership regulations to make them easier to understand, and bringing many of the requirements in line with SBA interpretations of similar requirements under similar programs.Continue Reading VA Proposes to Make VOSB Verification Easier Under the Veterans First Contracting Program

The Department of Defense published a long awaited proposed rule on August 3, 2015, amending the DFARS to provide guidance for evaluating the reasonableness of prices using data other than certified cost or pricing data.  The proposed rule falls short of its goal, instead increasing confusion in the determination of…
Continue Reading A Closer Look At DOD’s Proposed Price Reasonableness Rule

Pursuant to Executive Order 13,556 and as forecasted in the draft of the National Institute for Standards and Technology’s (“NIST”) Special Publication (“SP”) 800-171, the National Archives and Record Administration (“NARA”) released on May 8, 2015 a proposed rule addressing the government-wide designation and safeguarding of Controlled Unclassified Information[1] (“CUI”) (“the Proposed CUI Rule” or “the Rule”).  On June 18, 2015, NIST released the final version of SP 800-171, which provides guidance for protecting the confidentiality of CUI residing in nonfederal information systems.

SP 800-171 also includes interpretations of and best practices for compliance with the Proposed CUI Rule.  As a result, reading SP 800-171 in conjunction with the Proposed CUI Rule suggests that contractors may soon face significant additional burdens for safeguarding government information on their systems.Continue Reading New Proposed Rule and Accompanying Guidance May Impose Additional Cybersecurity Burdens on Contractors Handling CUI

On June 17, 2015, the Health Resources and Services Administration (HRSA) published a proposed rule to clarify how manufacturers should calculate the ceiling price for covered outpatient drugs under the 340B program, and to provide for civil monetary penalties (CMPs) on manufacturers that “knowingly and intentionally” overcharge 340B covered entities.[1]  The ceiling price provisions are not expected to significantly change manufacturers’ current practices; however, the possibility of CMPs is a new aspect of the 340B program.  Although HRSA speculates that the use of CMPs will “probably be rare,” the proposed rule does not provide significant guidance regarding what constitutes a knowing and intentional violation.  The rule would also subject manufacturers to liability for failure to ensure that covered entities receive 340B pricing from wholesalers or other distributors, raising questions about manufacturers’ obligations to oversee these entities.
Continue Reading HRSA Proposes Calculation of 340B Ceiling Prices, Implementation of Manufacturer Civil Monetary Penalties

If comments at a recent public meeting are any indication, the General Service Administration’s proposed Transactional Data Reporting rule may be in danger of stalling before it even gets started. The proposed rule, announced to great fanfare last month, has been trumpeted by GSA as a “new vision for Federal purchasing.” During an all-day public meeting held at GSA headquarters, however, the proposal was the subject of pointed criticism from industry and government stakeholders alike. Some complaints were perhaps not unexpected given the dramatic changes envisioned by the rule, but the objections from both public and private sources could force GSA to rethink its proposed approach before moving forward with a final rule.
Continue Reading Doubts Raised About GSA’s New Vision for Federal Contracting

The FAR Council recently announced two new rulemaking actions aimed at further tightening restrictions on the award of federal contracts to companies that have relocated overseas in inversion transactions.  The two rules — one interim, one proposed — would reinforce the existing ban on contracting with so-called “inverted domestic corporations” (IDCs), while also imposing new, more onerous reporting obligations on government contractors.  The FAR Council’s announcement represents only the latest development in a recent surge of inversion-related measures.  As discussed further below, the shifting rules and requirements envisioned by these myriad proposals carries the potential to trip up even sophisticated contractors.
Continue Reading FAR Council Proposes New Rules on Inverted Corporations; Congress Voices Support

The DoD, GSA, and NASA have issued a proposed rule that, if adopted, would greatly increase visibility into affiliate relationships among entities that hold federal contracts.  Under the proposed rule, the Federal Awardee Performance and Integrity Information System (“FAPIIS”) would be required to include information identifying any immediate owner or subsidiary of an offeror, as well as all predecessors of an offeror that within the last three years held a federal contract or grant. 
Continue Reading Proposed Rule Would Publicize Contractor Affiliate Relationships