Last week’s argument before the Supreme Court in Universal Health Services, Inc. v. United States ex rel. Escobar had the potential to put false claims based on an “implied certification” in the crosshairs. Instead, based on the weight of questioning by a plurality of justices, it appears that some form of implied certification theory may survive. (We previously reported on this case, here.)
The Department of Defense (“DoD”) recently proposed to make specified costs allowable that are associated with discovering and correcting counterfeit or suspect counterfeit electronic parts. DoD’s proposed rule would amend the Defense Federal Acquisition Regulation Supplement (“DFARS”) to implement the National Defense Authorization Act (“NDAA”) for Fiscal Year 2016.
Volume 4 – Key Issues in Government Contracts Due Diligence
This posting is the fourth in our ten-part series on unique issues that arise in connection with mergers and acquisitions involving government contractors and subcontractors. Parts 1 through 3 focused on the structure of the transaction and the implications of that structure on the transfer of pending contracts and proposals. This posting, Part 4, introduces some of the most important issues that potential buyers should consider and address during the due diligence and negotiation process. The posting is not intended to be a detailed “due diligence checklist,” but rather a high level overview of certain key factors that are likely to impact the “go/no go” decision and the buyer’s valuation of the target company. Continue Reading
On February 16, 2016, Secretary of Homeland Security Jeh Johnson announced interim guidelines and procedures for sharing cyber threat indicators under the Cybersecurity Information Sharing Act of 2015 (“CISA”). Because the guidelines are voluntary, the next question is, should your company share information with the Government? Continue Reading
There are some big potential changes coming to the bid protest process at the Government Accountability Office (“GAO”) in 2016. It is possible that this year will bring a formalized electronic docketing system, a fee for filing protests, and a sunset on an important part of GAO’s bid protest jurisdiction. Continue Reading
“If our country is to successfully defend our right to live the American way, it needs every one of you, and requires you in the best possible condition. Any [company] who willfully, or through neglect fails to maintain [their systems] in this condition is a ‘shirker’ who is throwing an extra burden on his comrades by requiring them to do his work as well as their own.”
It’s kind of apropos how easily you can adapt this introduction to a 1940s War Department venereal disease training film into a lesson addressing the 21st Century problems of cyberattacks and malware. After all, certain computer attacks are called “virus” for a reason, businesses often find themselves in a virtual “war” with hackers and nation states on digital shores all around the world, and, perhaps most telling, the sordid details of both are things we really don’t like to discuss in “open and polite society.” (I’ll stop there so as not to offend, but the list can go on.) So it comes as no surprise that it is the Department of Defense that is pulling back the curtain to openly address cyber-hygiene and, with the recent update and “open release” of the DoD Cybersecurity Discipline Implementation Plan, providing federal contractors and commercial companies alike with insight on the computer security prophylactics the Department is directing its units use. Continue Reading
Volume 3—What Happens to Pending Proposals?
Thus far in this ten-part series, we have discussed whether and how existing contracts with the Government can be transferred to the buyer or surviving entity when an acquisition, merger, or consolidation occurs. Today, we leave the world of existing contracts and turn to bids and proposals that are pending when the deal closes. What happens to those as-yet-unaccepted offers? Is there anything you can do to enhance the likelihood that the Government will be willing to accept such offers notwithstanding the organizational change? And, if you are in second place when the award is made to a “reorganized” offeror, are there possible protest grounds lurking in the deal that you could assert to obtain the award? Continue Reading
In a Federal Supply Schedule (“FSS”) procurement conducted under FAR Subpart 8.4, all items quoted and ordered by the agency are required to be available on the vendor’s schedule contract as a precondition to its receiving the order. This means, in the case of a task order for services, that all of the solicited labor categories must be on the successful vendor’s FSS contract. Continue Reading
The Department of Defense intends to issue a proposed rule to ensure that substantial future independent research and development (“IR&D” or “IRAD”) expenses, which can be used as a means to reduce bid prices in competitive source selections, are evaluated in a uniform way during the competitive process. 81 Fed. Reg. 6488 (February 8, 2016). However, interested parties and industry leaders can help formulate this regulation before the DoD issues the proposed rule. Continue Reading
On February 11, 2016, the Financial Industry Regulatory Authority (“FINRA”) filed a proposed rule with the Securities and Exchange Commission (“SEC”) that would require individuals who “design, develop or significantly modify algorithmic trading strategies” (or “ATS”) as well as individuals responsible for the “day-to-day supervision or direction of the development process,” to pass a qualification exam and register with FINRA as securities traders. During the comment period, FINRA clarified that the rule would not apply to every person who touches or is otherwise involved in the design of a trading system, but that it would be up to each firm to determine who is primarily responsible for the design of the ATS system. The rule defines ATS as “any program that generates and routes (or sends for routing) orders (and order-related messages, such as cancellations) in securities on an automated basis” and identifies eight typical programs that it would consider an ATS. (FINRA Reg. Notice 15-06.) The rule was prompted by FINRA’s concern that programmers be properly educated in securities regulations in order to avoid inaccurate orders, inadequate risk management controls, and other problematic conduct. Commentators criticized the proposal as having a “potential chilling effect” by “discouraging well-qualified developers from participating in the design, development or modification of algorithmic trading strategies, and even from affiliating with FINRA member firms.”