Rulemaking

On Monday, April 18th, the Health Resources and Services Administration (“HRSA”) and the Department of Health and Human Services (“HHS”) reopened the comment period for their proposed rule “340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation” (“Proposed Rule”).  Originally issued on June 17, 2015, the Proposed Rule sought to implement the civil monetary penalty (“CMP”) and ceiling price calculation provisions created by the 2010 amendment to Sec. 340B of the Public Health Service Act (“PHSA”) (for additional information on the Proposed Rule, please see our October 2015 webinar materials on the subject).  Comments were due August 17, 2015 and stakeholders vigorously commented on HRSA’s proposed penny policy for the ceiling price calculation, the lack of clarity regarding the new drug estimate calculation, and the liability standard for CMPs.
Continue Reading HRSA Seeks a Second Round of Comments on 340B Penny Pricing, New Drug Estimates, and Civil Monetary Penalties

On December 30th, the Department of Defense (DoD) issued a Second Interim Rule amending its “Network Penetration Reporting and Contracting for Cloud Services” Interim Rule and giving  contractors until December 31, 2017 to implement the NIST SP 800-171 security controls required by DFARS 252.204-7012.  As noted in a previous post, DoD has already issued a class deviation giving covered contractors up to nine (9) months (from the date of contract award or modification incorporating the new clause(s)) to satisfy the requirement for “multifactor authentication for local and network access” found in Section 3.5.3 of NIST SP 800-171.  This current revision appears responsive to significant concerns raised by Industry about compliance with the remaining safeguarding requirements imposed overnight on contractors on August 26, 2015.

The Second Interim Rule imposes the following changes:
Continue Reading Time Is On My Side: DoD Hears Industry Concerns – Additional Time Provided to Implement Security Controls Under New Cyber Rule

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

The FAR Council has released a proposed rule calling for significant revisions to the provisions in FAR Parts 19 and 52 addressing small business subcontracting plans.  The proposed changes, which are intended to implement regulations adopted by the Small Business Administration (SBA) in 2013, should serve as a not-so-subtle reminder of the range of small business-related obligations imposed on prime contractors, as well as the consequences of failing to satisfy those obligations.
Continue Reading FAR Council Beefs Up Small Business Subcontracting Rules

On May 28, 2015, the Federal Acquisition Regulatory (FAR) Council published proposed regulations that create additional obstacles for offerors seeking to obtain government contracts.  As we previously discussed, these regulations implement the “Fair Pay and Safe Workplaces” Executive Order 13673 that President Obama signed on July 31, 2014.  The regulations, which were accompanied by and incorporate proposed implementing guidance published by the Department of Labor (DOL), would amend the FAR to require contractors to disclose certain labor law violations when submitting bids for federal work.  The purpose of the Executive Order and proposed regulations is to advance the longstanding principle that contractors must be responsible in order to conduct business with the federal government.  The government’s goal is to promote and maintain economy, efficiency, and integrity in the procurement process by only awarding contracts to contractors who comply with labor laws. 
Continue Reading Proposed “Fair Pay and Safe Workplaces” Regulations Clarify New Responsibilities for Government Contractors

Over the past decade, Congress has focused on eliminating excessive “pass-through” charges—charges defined as overhead costs or profits passed to the Government by contractors adding negligible value over work done by lower-tier contractors.  The efforts began with the Post-Katrina Emergency Management Reform Act of 2006, which introduced limitations on tiered subcontracts after allegations that the Government grossly overpaid for goods and services provided largely by lower-tier subcontractors in the reconstruction following Hurricane Katrina.  However, until the passage of the instant rule to be implemented in FAR 15.404-1(h) effective June 8, 2015, such efforts have had little impact on agencies’ procurement processes.  This latest rule has the potential to significantly reduce the appetite for such contracts, and impact proposal and bid protest strategies.
Continue Reading Contracting Officers Must Soon Separately Justify Awards to Offerors Proposing High-Percentage or “Pass-Through” Subcontracting

President Obama recently issued two Executive Orders designed to ensure that federal contractors maintain strict compliance with various labor-related laws and regulations if they wish to remain eligible for federal contracts.  Taken together, these Executive Orders place significant new compliance burdens on federal contractors.  Please see our attached article for…
Continue Reading Executive Orders Impose New Labor Requirements on Contractors

A Federal Register notice has requested public comments on “alternative measures” for capping the reimbursement of contractor employee compensation.  This notice follows a June 24, 2014 interim rule from the Department of Defense (“DOD”), the General Services Administration, and the National Aeronautics and Space Administration that implements Section 702 of…
Continue Reading Request for Public Comments on “Alternative Measures” for Calculating Allowable Employee Compensation Costs

A Washington, D.C., federal judge has declined requests from Pharmaceutical Research and Manufacturers of America(“PhRMA”) to invalidate a new interpretive rule applicable to orphan drugs in the 340B drug discount program, saying the trade group must file a new complaint in order to proceed.

Last week, the D.C. District Court…
Continue Reading Judge Requires PhRMA To Initiate New 340B Orphan Drug Lawsuit to Challenge Interpretive Rule