Cyber-Breach & NISPOM Conforming Change 2 – It’s What’s on the Inside That Counts

Most companies are worried about external threats – things that are coming at their people, their group, their company, their government, all from an outside actor.  Like government’s with an eye on counter-intelligence, however, savvy businesses also realize that their employees can also pose a very real, internal threat.  While an insider breach is not necessarily a common event, when it does happen, it tends to happen on a large scale.  Last year, the FBI reported that when a malicious insider breach surfaced, it cost industry $412,000 per incident, on average.  Over ten years, the average loss per industry is $15 million.  And, unless you’ve been hiding under a rock, you know that the Government is not immune to insider breaches and the reputational impact to federal contractors resulting therefrom.  Exacerbating, or perhaps facilitating, this threat is the manner in which companies (and governments) store, transfer, and maintain vital company records and data.  With the right password and a $16 thumb drive, an intern can steal the corporate keys to the kingdom, and still be home in time for lunch.  Simply put, all employers face the risk of insider threats which are more perilous than ever in the computer age.  Recognizing that internal threats are real, the issue, then, is how to stop these threats from manifesting.  Learning from recent high-profile mistakes, the Government is trying to make sure its contractors stay ahead of the risk of an internal breach.

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“How Dare You Charge That for a Spare Part!” – The Untold Story of the X27 Interface Assembly

The pricing of spare parts has been a subject of Government criticism for decades.  Pick up any DCAA or IG audit report relating to spare parts or any intra-agency memorandum on the topic and you will sense the dudgeon with which the Government reacts to the prices of those parts.

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Shopping for the Cloud Made Easy – GSA’s Special Item Number Project for Cloud Computing and Request for Comments

On November 18, 2014, the General Services Administration (“GSA”) hosted an Industry Day seeking feedback on its proposal to add a Cloud Computing Special Item Number (“SIN”) on  its IT Multiple Award Schedule 70 (“MAS IT-70”).  A SIN is GSA’s categorization method that groups similar products, services, and solutions together to make the acquisition process easier.  This move is not surprising in light of the Government’s “Cloud First” policy (announced in 2011), which requires agencies to evaluate cloud computing options “whenever a secure, reliable, and cost-effective option exists.”  Further, GSA’s latest proposal noted that a cloud SIN “would … enabl[e] agencies to take full advantage of cloud computing benefits to maximize capacity utilization, improve IT flexibility and responsiveness, and minimize cost.”  In the end, by offering a cloud-specific SIN, GSA hopes to drive more value into the schedules program by providing cloud-based options more rapidly and easily than before.  This article will give you a brief overview of the new, proposed SIN.

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Protests Up & Sustains Down – A Brief Review of GAO’s FY 2014 Bid Protest Stats

On November 18, 2014, the U.S. Government Accountability Office (“GAO”) published its Annual Report to Congress (B-158766, November 18, 2014), which contains the statistics for bid protests filed at GAO in FY 2014.  Frankly, it’s a mixed bag – protests are up, sustained protests are down, but the overall “effectiveness rate” (where the agency grants some type of remedy or corrective action for a protestor) remains flat.  Because there are many who think that the bid protest process is broken, it might be worth a closer look at some of the statistics to see if bid protests are being abused (as some in Government might claim) or if the process is working.

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“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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