Category Archives: Government Contracts Law

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Can DoD Be “The Biggest Loser”? Gates Unveils DoD’s New Fiscal Diet Plan

After a decade of increasing appetite for defense dollars, the Pentagon appears to have stepped on a scale and decided to make some changes. Following-on from the Department of Defense’s June 2010 announcement regarding changing its procurement business models, Defense Secretary Robert Gates and Under Secretary of Defense for Acquisition, Technology and Logistics, Ashton Carter, recently … Continue Reading

Precision Pine & Timber, Inc. v. United States: An Unexpected Test For Determining Breach Of The Implied Duty To Cooperate And Not To Hinder Contract Performance

In Precision Pine & Timber, Inc. v. United States, 2010 WL 569733 (C.A. Fed. 2010), the United States Court of Appeals for the Federal Circuit articulated an unexpected test for determining when a party to a contract has breached the implied duty of good faith and fair dealing.[1] The court in Precision Pine found that the … Continue Reading

Administration Actively Solicits Higher Costs From Bidders – Is Its “High Road Procurement Policy” Headed Off a Cliff?

The Obama Administration is now planning yet another spending plan, this time in the form of a policy that actively encourages federal contractors either to increase the pay and benefits extended to their workforces, or to face an evaluative disadvantage in competing for federal contracts. This so-called "High Road Procurement Policy" includes an evaluative reward for … Continue Reading

The Fourth Amendment Trumps Unbridled Government Searches Of Electronic Data(And What Companies Should Know To Protect Their Interests)

There are few things worse for a business than starting the day with FBI agents at the door demanding to search the files and computers with a search warrant in hand. Matters have not improved for businesses in the last ten years.  Courts have struggled with balancing the government’s interest in discovering evidence of a crime … Continue Reading

Six Questions To Ask In Figuring Out Whether The Recovery Act Buy American Requirement Applies To You

Nearly one year ago on February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), more commonly known as the Stimulus Act, the Recovery Act, or ARRA. One of the key features of the Act included a "Buy American" requirement, requiring domestically manufactured "iron, steel, or … Continue Reading

Novations: A Simple Checklist For A Not So Simple Requirement

As though the risks inherent in a merger or acquisition were not enough to turn any business person prematurely gray, when one or both of the entities in play are federal contractors, the risks become even greater. One of the primary sources of these additional risks is the federal Government’s novation rules. Anyone looking to buy or … Continue Reading

New 2010 Updates to Buy American and Trade Agreements Dollar Thresholds; Buy American Requirements Remain Elusive and Complicated

Effective January 1, 2010, the U.S. Trade Representative (USTR), Ronald Kirk, published new dollar thresholds determining the applicability of the Buy American Act (BAA), the Trade Agreements Act (TAA), and (potentially) other "Buy American" preferences to the United States’ various international free trade agreements. See 74 Federal Register 68907 (December 29, 2009). The changes to the dollar … Continue Reading

The “Franken Amendment”: A Blow to Arbitration and Increased Litigation and Compliance For Government Contractors

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 … Continue Reading

Federal Circuit Affirms, Requires Showing of Benefit to the Government for Allocability of Development Costs

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 … Continue Reading

Trust, but E-Verify: A Cheat Sheet for Mandatory Employment Eligibility Verification by Federal Contractors

The final rule mandating E-Verify for federal contractors became effective on September 8, 2009. The lawsuit that stayed implementation of E-Verify since January ended with the district court’s granting of the Government’s motion for summary judgment. As long as Congress continues to fund E-Verify, it should remain a permanent fixture of federal procurement.  … Continue Reading

Trimming the Fat in Government Subcontracts — Recognizing What Really Needs to Be Flowed Down by the Prime

Even experienced contractors can find themselves in unfamiliar waters when delving for the first time in the world of government contracts. In many cases, the first step for a commercial company may be acting as a subcontractor (the "Subcontractor") for another company (the "Prime") that is contracting directly with the Government. Even though the Subcontractor’s contract is … Continue Reading

New FCA Materiality Definition Enters Time Warp, Influences Interpretation of 1986 Statute

The civil False Claims Act (FCA) prohibits using false statements related to a false claim. (Other types of FCA liability include presenting a false claim, concealing an obligation to pay money to the government, and conspiring to violate the FCA.) In the recent FCA amendments, Congress explicitly added materiality as an element of FCA false statement liability. … Continue Reading

Federal Court Limits Retroactive Application of FCA Amendments

Congress recently expanded contractors’ liability under the civil False Claims Act (FCA). The substantive changes include eliminating the presentment requirement, adding liability for claims seeking non-United States funds, expanding the scope of reverse false claims and conspiracy liability, and eliminating the intent requirement for conspiring to violate the FCA and for using false statements material to … Continue Reading

New FCA Rules Put Lenders and Brokers Directly in Their Gun Sights

I.  INTRODUCTION Without a doubt, the False Claims Act ("FCA") has been dramatically changed in the last few months. As will be discussed in more detail herein, it certainly appears that the FCA has been retooled so that the playing field is now stacked in favor of the government and qui tam plaintiffs. There is also every … Continue Reading

The Allocability of IR&D — A Fork in the Road?

With the elimination of the IR&D and B&P ceiling a decade or so ago and the recognition of “dual use” technologies as appropriate subjects of IR&D, contractors have tended to place questions relating to the allocability of IR&D on the back burner. True, the old concurrency issue remained, but allocability seemed to be relatively non-controversial. Based upon … Continue Reading

Working Like a Highway Road Crew — Government Finally Amends SF 1443 to Eliminate References to “Paid Cost Rule,” a Mere Seven Years After the Fact

In November 2002, the FAR Councils eliminated the so-called "paid cost" rule from the FAR, which had previously prevented federal prime contractors other than small businesses from recognizing incurred subcontractor costs for purposes of progress billing until "payment by cash, check, or other form of actual payment" had actually been made. See 67 Federal Register 70520 … Continue Reading

Country of Origin –
“Made In Taiwan” Will Soon Be TAA Compliant
China Continues to Dawdle
Costa Rica, Peru, and Oman also Recognized

On June 16, 2009, Taiwan (aka Chinese Taipei) took the penultimate step in acceding to the World Trade Organization’s Government Procurement Agreement (WTO GPA), which will eventually grant Taiwan "free trade partner" status under the Federal Acquisition Regulation (FAR) and allow companies selling to the U.S. Government to deliver products that are manufactured in Taiwan. The … Continue Reading

Federal Circuit Casts Cloud on Future Recovery of Settlement Costs in Non-Fraud-Related Cases

On May 19, 2009, the Federal Circuit in Secretary of the Army v. Tecom upheld the contracting officer’s disallowance of a contractor’s legal costs and settlement expenses in a sexual harassment and retaliation action brought under Title VII. The opinion is sweeping, and appears to extend the holding in Boeing North American, Inc. v. Roche, 298 F.3d … Continue Reading

Federal Circuit Grounds The “Flying Dorito”

In McDonnell Douglas Corp. v. United States, Civil Action No. 2007-5111-5113 (Fed. Cir. June 2, 2009), the Federal Circuit, after more than a decade of A-12 litigation, upheld a termination for default, finding that the Government was justifiably insecure about the contract’s timely completion. The Court’s opinion articulates the sustainable rationale for a default termination when … Continue Reading

“There You Go Again” – Does the Fourth Estate Even Try to Get it Right When it Comes to Government Contracts?

The influential inside-the-Beltway newspaper and website Politico "reports" in its May 26th edition that, as the Administration is "following through" on its campaign pledge to cut wasteful Pentagon spending, it is finding that "the price is high." Politico, May 26, 2009 at 14. Well, OK, as a well worn bumper sticker says “Choices have consequences,” … Continue Reading

Government Contractors Are Spared E-Verify (For Now) But Face Debarment for Hiring Illegal Immigrants

For the third time, the Government has agreed to delay the mandatory implementation of E-Verify for government contractors. They will not have to comply with E-Verify until June 30, 2009, when contracting officers can begin inserting FAR clause 52.222-54. Employment Eligibility Verification, into solicitations and contracts. 74 Fed. Reg. 17793. E-Verify has been pushed back once already … Continue Reading
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