“INCOMPLETE, INACCURATE, AND UNVERIFIABLE”: An Evening with the OIG’s Recent Audit Report on GSA’s Administration of Contractor Team Arrangements

Partner Jonathan Aronie recently published a review of the General Services Administration’s (“GSA”) Office of the Inspector General (“OIG”) Report concerning Contractor Team Arrangements (“CTA’s”) for the Coalition for Government Procurement.  After laying out the auditor’s objectives summarizing the core principles of a CTA, Mr. Aronie discusses the risks associated with CTAs for government contractors and effective risk mitigation techniques. The article, republished with permission from the Coalition, can be read here.

Data Rights Redux – 10 Ways to Preserve Your IP

About a year ago, we published a list of the more common ways in which contractor’s compromise their ability to protect their intellectual property from the ever-extended grasp of Uncle Sam.  Somewhat tongue in cheek, that posting described what to do if you want to lose your IP.  Because this issue is always topical, we revisit it today, this time with a more proactive focus on what you should affirmatively do to preserve your IP when dealing with the Government.  Two sides of the same coin, both of which should guide those whose job it is to preserve your IP.  So, to accompany last September’s 10 “Don’ts” we offer the following 10 “Do’s” when dealing with Uncle Sam in relation to your IP.

Recent Developments in Cases Dealing with the False Claims Act’s First-to-File and Public Disclosure Bars

This blog post is a preview of a presentation Mr. Turetzky will be giving at the American Bar Association Public Contracts Law Section’s Fall Meeting in Miami, Florida on November 1, 2014.     

The False Claims Act, 31 U.S.C. §§ 3729-3733, enables whistleblowers—also known as qui tam relators— to file fraud suits on behalf of the United States against private government contractors.  With the assistance of qui tam relators, the United States government has recovered billions of dollars in False Claims Act settlements and judgments.  Allowing private persons to litigate on the government’s behalf, however, often encourages parasitic, unmeritorious lawsuits.  For this reason, Congress has limited the power of qui tam litigants in a number of ways.

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DC Circuit Ruling Confirms Reasonableness Of Resellers Relying On TAA Certifications From Suppliers

The U.S. Court of Appeals for the District of Columbia Circuit has issued a ruling bringing to an end the long-running False Claims Act (“FCA”) case filed by relator Brady Folliard and providing useful guidance to resellers servicing the Federal government through the GSA Multiple Award Schedule program.[1]  In affirming the district court’s decision to grant Govplace’s motion for summary judgment and dismiss the case, the Court of Appeals found that Govplace did not knowingly violate the FCA because it reasonably relied on Trade Agreements Act (“TAA”) certifications from its distributor.  The holding of the Court of Appeals that “a contractor like Govplace is ordinarily entitled to rely on a supplier’s certification that the product meets TAA requirements” has broader implications than just the claims asserted against Govplace: it ratifies the long-standing industry practice of small business resellers leveraging the resources of their suppliers to comply with the requirements of their GSA Schedule Contracts.

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Recent Remarks By Officials Reinforce DOJ’s Focus On Criminal Fraud Investigations And Prosecutions Of Culpable Individuals

In a trio of speeches given at separate events on September 17, 2014, Department of Justice (“DOJ”) officials announced new initiatives and points of emphasis in the Government’s ongoing efforts to hold corporations and corporate officers criminally liable in the aftermath of the 2008 financial crisis.  Among the issues addressed by Assistant Attorney General Leslie Caldwell, Principal Deputy Assistant Attorney General Marshall Miller, and Attorney General Eric Holder were increased coordination between the Civil and Criminal Divisions on qui tam False Claims Act (“FCA”) cases, an emphasis on corporations’ cooperation in prosecuting culpable individuals, and the importance of whistleblowers and cooperating witnesses in the government’s investigations.

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What’s New Out There? Highlights from the Federal Register

SBA Proposes to Increase Small Business Size Standards (79 Fed. Reg. 54145; 79 Fed. Reg. 53646)

The U.S. Small Business Administration (“SBA”) proposes to increase small business size standards for: (1) 209 industries in North American Industry Classification System (NAICS) in the manufacturing sector; and (2) industries with employee based size standards not part of manufacturing, wholesale trade, or retail trade.  These proposed rules are parts of a series of proposed rules that will review the size standards of industries.

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DOJ’s FCPA Enforcement Power Gets A Big Boost

In 2011, the Department of Justice (“DOJ”) stated that “[i]t’s not necessarily the wisest move for a company” to challenge the definition of “foreign official” under the Foreign Corrupt Practices Act (“FCPA”), and that “[q]uibbling over the percentage ownership or control of a company is not going to be particularly helpful as a defense.”[1] The DOJ’s prophecy rang true in the Eleventh Circuit’s recent decision in U.S. v. Esquenazi, 2014 U.S. App. LEXIS 9096 (11th Cir. 2014).

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Attorney-Client Privilege Protection in Internal Investigations Upheld by D.C. Circuit: Good News for Corporate Counsel

This article was originally published by Bloomberg Law.

In a much-anticipated decision, the D.C. Circuit clarified the general test for the applicability of the attorney-client privilege in internal investigations. In re Kellogg Brown & Root, Inc., 14-5505, 2014 WL 2895939 (D.C. Cir. June 27, 2014). The court unanimously rejected the district court’s holding that a communication is privileged only if it would not have been made “but for” the purpose of seeking legal advice. Although a few district courts have followed this narrow “but for” test, corporate counsel rightfully feared that other courts would follow suit and narrow the protection generally afforded to internal investigations that are often done to comply with regulatory or business requirements and to seek legal advice. In rejecting the “but for” test, the D.C. Circuit looked to the lessons learned from Upjohn Co. v. United States, 449 U.S. 383, 392 (1981) and broadly held that communications in internal investigations are privileged not only where the single primary purpose of an investigation is to provide legal advice, but also if that is “one of the significant purposes” of the investigation.

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Federal Register Round Up – June/July 2014

DOD Proposed Rules Seeking Contractor Business System Rule Self Assessments

The Department of Defense issued a proposed rule on July 15th that would revise the DFARS Business Systems Rule by requiring contractors with estimating, accounting, material management, and accounting systems that are currently subject to the existing Business Systems Rule to perform self-assessment reports on their business systems compliance.  The proposed rule would have contractors assuming responsibility for annual self-assessments of those systems and for overseeing a triennial audit of the contractor’s compliance by an independent contractor-selected Certified Public Accountant.  As drafted, the proposed rule would only apply to the contractor’s accounting, estimating, material management, and accounting systems used for DOD CAS-covered contracts. Government auditors would examine the results of the self-evaluations.  Contractors will be offered no favorable credit or “safe harbor” for disclosures made in the contractor’s report.

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