Government Contracts Blog : Government Contracts Lawyer & Attorney : Sheppard Mullin Law Firm : Bids, Licenses, Awards, Conflict of Interest.

On November 4, 2008, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Rothe Development Corporation v. Department of Defense, No. 2008-1017, 2008 WL 4779586, holding that:

• Congress lacked a "strong basis in evidence" of discrimination by the Department of Defense ("DOD") against socially and economically disadvantaged individuals and businesses (referred to collectively as "socially disadvantaged businesses" or "SDBs");
• Lacking a "strong basis in evidence," the race-conscious remedial measures at 10 U.S.C. § 2323 (setting a goal to award at least 5% of annual contracting dollars to small disadvantaged businesses and authorizing certain set-asides for SDBs) were unconstitutional, violating the Fifth and Fourteenth Amendments to the U.S. Constitution guaranteeing equal protection to all citizens under the law; and
• The District Court hearing the case should enter an order declaring that the current 10 U.S.C. § 2323 is facially unconstitutional, and that its further application should be enjoined.

Since federal procurement includes a hodgepodge of "preferences" for small businesses, minority-owned businesses, women-owned business, veteran-owned businesses, service-disabled-veteran-owned businesses, historically underutilized business zone ("HUBZone") businesses, and other small disadvantaged business concerns, the Rothe decision has the potential for a significant ripple effect. Already the "splash" of the Rothe decision is obvious, with news of the recent decision being picked up by bloggers and newspapers alike. However, its ultimate impact remains to be seen and may be overstated by some recent analyses.

• Email This
• Print
• Comments

With the enactment of the Federal Acquisition Streamlining Act (FASA) in 1994, Multiple Award task and delivery order contracts were given a significant boost.  As part of that legislation came an almost ironclad bar to bid protests against the award of individual task or delivery orders.  Disappointed offerors were prohibited from protesting the award of task or delivery orders except if such orders increased the scope, period, or maximum value of the underlying contract.  Several exceptions subsequently were carved-out from the general prohibition, including protests of “down-selections” as well as task and delivery orders awarded under the GSA FSS program.  Otherwise, however, disappointed offerors could either air their grievances with the agency ombudsman (an individual who possesses no binding authority) or could take the road seldom traveled and file a CDA claim with the contracting officer alleging a breach of the "fair opportunity to compete" required by FASA, implementing regulations, and contract clauses.  Only recently was there any indication that damages could be awarded under the latter approach and, as expected, the standard for recovery is a difficult one for any contractor to meet.  The circumscribed recourse available to disappointed task or delivery order offerors did not occur by happenstance – it was the result of deliberate efforts by reformers to streamline the acquisition process and to avoid the delays and increased costs they attributed to the numerous, routine and purportedly needless protests encumbering the procurement system.
 

• Email This
• Print
• Comments

On October 3, 2008, the U.S. Department of Commerce, Bureau of Industry and Security ("BIS") published new interim rules, effective immediately, rewriting and altering the export regulations on encryption items (specifically, the encryption restrictions at EAR 742.15 and the ENC license exception at EAR 740.17).  73 Federal Register 54795.  BIS hopes that the new rules will streamline the existing encryption review process, expand the availability of the ENC license exception, and more fully harmonize the encryption restrictions with the rest of the Export Administration Regulations ("EAR").

• Email This
• Print
• Comments

On October 1, 2008, the U.S. Department of Commerce, Bureau of Industry and Security ("BIS") published a new interim rule, effective immediately, modifying the provisions by which companies calculate the de minimis value of U.S. components, materials, or technologies incorporated in foreign-manufactured products.  73 Federal Register 56964.  While the new rules do not substantively modify current export policy, they do effect some changes that could benefit foreign companies in determining whether their foreign-manufactured products are beyond the scope of the Export Administration Regulations ("EAR") (15 CFR Parts 730-772).

• Email This
• Print
• Comments

The Foreign Corrupt Practices Act (FCPA) is a federal law which prohibits companies from obtaining or directing business through the payment of bribes to foreign governmental officials and political figures. The renewed focus on corporate accountability in recent years has led to a dramatic increase in the number of FCPA enforcement actions -- from 5 in 2004 to 38 in 2007. The attached presentation, utilized in connection with a recent in-house presentation, summarizes the FCPA and why it is imperative that every company doing business in the global marketplace be aware of its provisions and serious penalties, including civil penalties, criminal fines, and imprisonment, in the event of a violation.

Click here to view the presentation.

Presented by:

Bethany Hengsbach

(213) 617-4125

bhengsbach@sheppardmullin.com

• Email This
• Print
• Comments