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

On Thursday, January, 22, 2009, Sheppard Mullin co-sponsored a Bisnow event that discussed opportunities for government contractors, particularly those in the Federal IT industry, under the new Administration. Panelists included several government and industry leaders, including: DoD Deputy CIO David Wennergren, Karen Evans (former Administrator of the Office of e-Government and Information Technology at OMB), Navy CIO Robert Carey, ATS Corporation CEO Dr. Edward Bersoff, and SRA International CEO Dr. Stanton Sloane.

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On December 19, 2008 DCAA issued new guidance for audit of and reporting on internal controls that -- in two short pages of sometimes cryptic text -- (a) redefines the agency's approach to the critical concepts of "significant deficiency" and "material weakness" in internal controls and (b) establishes new criteria for auditor reports of deficiencies in large contractor internal control systems, and recommendations as to the adequacy of the contractor systems, including recommendations that the Contracting Officer pursue suspension of progress payments on reimbursement of costs. 

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As noted in an email alert to the Coalition for Government Procurement members, mandatory implementation of the E-Verify use by Government contractors has been postponed to February 20, 2009.  The Coalition has kindly authorized us to republish the text of its alert as a courtesy to our subscribers.

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Effective December 22, 2008, the U.S. Department of the Treasury (“Treasury”) issued new rules relating to the procedures that the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) will use in reviewing foreign investments in U.S. companies.  See 73 Fed. Reg. 70702.  The revised, final rules continue to focus on the potential impact that a particular transaction may have on U.S. national security and retain many of the features of the proposed rules, which we have previously discussed here and here.

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On October 3, 2008, the U.S. Department of Commerce, Bureau of Industry and Security ("BIS") published a proposed rule on a new export license exception authorizing intra-company transfers ("ICT") of products, software and technology restricted under the Export Administration Regulations ("EAR") (15 CFR Parts 730-772).  73 Federal Register 57554.  The proposed rule is similar, in effect, to the current policy permitting special comprehensive licenses (15 C.F.R. Part 752); BIS hopes, however, that the new proposed rule will be better able to streamline the export licensing process for internal company exchanges of hardware and technology.  If adopted, the proposed ICT rule would significantly reduce existing barriers to the unlicensed, world-wide, intra-company transfer of large categories of controlled products and technology.  The freedom that would accompany the rule, however, comes with a heavy administrative burden.

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In its 2008 report on the Government’s financial consolidated statements released on December 15, the Government Accountability Office criticized “serious financial management problems at the Department of Defense, the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and the federal government’s ineffective process for preparing the consolidated financial statements.”  GAO further reported that the Government did not comply “with significant laws and regulations.”  Ironically, this report issued just days after the Government forced all federal contractors to implement their own internal control systems under penalty of suspension or debarment.

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Beginning on January 15, 2009, certain federal contractors will be required to utilize the E-Verify system to assure that employees assigned to work on federal procurement contracts and all new employees are authorized to work in the United States.  E-Verify is an Internet-based employment verification system administered by the Department of Homeland Security (“DHS”) designed to ensure the legal employment status of employees working in the United States.

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Introduction

By John W. Chierichella (B.A., Cornell University, 1969)

From time to time in this blog, we have reported on developments relating to federal restrictions on the direct or indirect acquisition of offshore resources, with the ever evolving restrictions on the acquisition of specialty metals being a particular bête noire of our contributors.  This month we are pleased to provide a guest contribution on a related topic -- state prohibitions and/or restrictions on offshore procurement.  It is one thing for the federal government to impose limits on foreign commerce.  It is altogether different -- and a question of Constitutional dimension -- for states to do so.  This month's contribution, provided to us by Michael A. Zuckerman with the permission of The Cornell Law Review, examines this question in detail. Our thanks to both for their willingness to provide their analysis of this issue to our subscribers.  To read Mr. Zuckerman's Note, entitled "The Offshoring of American Government," click here.

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On September 17, 2008, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued interim rules providing for enhanced competition for task and delivery order contracts.  The interim rules essentially mirrored Section 843 of the National Defense Authorization Act of 2008 (the Act), which went into effect on May 27, 2008, and revised three provisions of the Federal Acquisition Regulation (FAR 16.503 – 16.505) to incorporate the Act’s enhanced competition requirements.  See 73 Fed. Reg. 54008 (Sept. 17, 2008).  As was discussed in an earlier blog article with respect to the interim rules when they were initially proposed, the rules targeted three primary areas:

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Determining whether to challenge the award of a contract to a competitor can be a daunting decision for a federal government contractor.  This article seeks to make that decision more manageable by providing an overview of the bid protest process and by suggesting several factors a contractor should consider in determining whether to protest an award.[i]

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