If the whispering campaign is true and the Obama Administration has in fact embarked on a “war against contractors,” then Brett Lambert may well have been designated to “take the point.”
Contractors engaged in procurements under the Foreign Military Sales ("FMS") program can breathe a little easier after a Government Accountability Office ("GAO") ruling on November 5, 2009, in which the GAO denied the U.S. Army Material Command's ("Army's") assertion that a contractor is not entitled to reimbursement for its protest costs associated with an FMS procurement protest. In Alsalam Aircraft Company, B-401298.3, the GAO found that FMS trust funds have the "character of appropriated funds" and that the Arms Export Control Act, which authorizes the FMS program, allows for use of appropriated funds in an FMS procurement and provides for recovery of protest costs from the FMS customer.
In October, the United States Senate, by a 68-30 vote, approved an amendment to the Department of Defense (“DoD”) appropriations bill for fiscal year 2010 which prohibits the use of appropriated funds, if such funds are to be paid to any contractor or subcontractor, at any tier, which requires its employees or independent contractors to resolve certain claims through arbitration. The amendment, which passed despite DoD objections, was introduced by Sen. Al Franken (D-MN) (the “Franken Amendment”).
In Teknowledge Corp. v. U.S., Fed. Cir., No. 2009-5053, 11/03/09, the U.S. Court of Appeals for the Federal Circuit affirmed a decision by the Court of Federal Claims (COFC) that software development costs were not allocable to the Government because the Government did not receive a benefit from the costs. Earlier this year we wrote about the potential implications of the COFC's decision.
Under the terms of a proposed FAR rule issued November 13, contractors that perform systems engineering and technical assistance ("SETA") type work for Government agencies soon will face enhanced obligations to prevent personal conflicts of interest on the part of their employees. The proposed rule applies to all contractors with covered employees who perform acquisition functions "closely associated with inherently Government functions" such as planning acquisitions, evaluating contract proposals, and awarding Government contracts.
With its recent decision in Cell Therapeutics Inc. v. Lash Group Inc., 9th Cir., No. 08-35619, Nov. 18, 2009, the United States Court of Appeals for the Ninth Circuit took a dramatic step towards preserving the rights of False Claims Act (FCA) defendants. The court's ruling permits FCA qui tam defendants to seek recovery against third parties vis-à-vis contractual indemnity and independent claims after settling an FCA action with the government and an employee whistleblower (known as a "relator").
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