On December 21, 2020, the Department of Defense (“DoD”) published a final rule in the Federal Register that codifies the National Industrial Security Program Operating Manual (“NISPOM”) in the Code of Federal Regulations (“CFR”) at 32 CFR part 117. The rule will become effective on February 24, 2021, giving contractors six months from the effective date to comply with the changes. Comments on the proposed change are due by February 19, 2021.[1]
Continue Reading The NISPOM is Becoming a Regulation & Contractors Have Six Months to Comply

This month’s Federal Register Updates include four important changes that will impact the day-to-day activities of Government Contractors and Agencies alike.  The first, a final DFARS rule on Performance-Based Payments, provides detailed guidance and instructions on the use of the Performance-Based Payment analysis tool, which is required to be used by all Contracting Officers contemplating use of performance-based payments on new fixed-price type contract awards.  The second is a proposed rule that would extend personal conflicts of interest to a newly expanded group of “covered employees” who perform functions closely associated with inherently governmental functions (not simply acquisition functions, as is currently the case under the present rule) and contracts for personal services.  The third change does not impose requirements on contractors, but does establish DoD procedures relating to the reported foreign ownership, control, or influence (FOCI) information that DoD is tasked with evaluating, mitigating, or negating. And the fourth important change, the President’s Memorandum and Executive Order on Compensation Data Issued on National Equal Pay Day, continues the President’s push for greater pay equality between women and minorities.
Continue Reading What’s New Out There? Highlights from the April 2014 Federal Register

By Marko W. Kipa

We all now realize that, contrary to the pronouncements of certain pundits, the world is not economically flat.  But it is undeniable that its citizens and businesses are more economically connected than ever before. One manifestation of this interconnectedness is the increasing number of cross-border acquisitions of business enterprises. In most cases these transactions do not become the subject of public discussion or detailed government scrutiny.  But when foreign entities seek to purchase U.S. government contractors who perform classified national security work and therefore hold facility security clearances (“FCLs”), the U.S. Government is anxious to know, among other things, the extent to which the company is the subject of foreign ownership, control or influence (“FOCI”).  Being under FOCI can sound the death knell for a company’s ability to perform classified work, with consequent loss of business that may be critical to the company’s continued status as a going concern. But that outcome can often be avoided by development and submission of a FOCI mitigation plan which, if accepted either as submitted or modified, can enable the company to continue performance of national security work.
 


Continue Reading Evaluating FOCI In The Context Of An M&A Transaction