The COVID-19 Pandemic wreaked havoc on many businesses. For others, though, it created new opportunities to sell to the federal government, including an unprecedented demand for personal protective equipment (“PPE”), COVID tests, and vaccines. Perhaps your company found itself as a first-time government contractor, or you started selling products to the government that you had never sold before. If your government contract went smoothly, congratulations! If not, you may be left wondering who will pay for unexpected increased costs of performance, or how you can defend against the government’s claims to recoup overpayments or liquidated damages. Continue Reading Don’t Leave Money on the Table from Your Pandemic-Era Healthcare Procurement Contract
Keeley A. McCarty
Keeley McCarty is an associate in the Governmental Practice in the firm's Washington, D.C. office.
A Second Chance to Win Your Government Healthcare Contract
The government buys billions of dollars in healthcare-related goods and services every year, and no government procurement is perfect. In a business where every contract award matters, healthcare contractors should be aware that they may have a second chance at winning a contract if the government agency made a material error in its procurement process. The question disappointed healthcare contractors should ask is whether the agency acted unreasonably in its evaluation and selection of the awardee. If the answer is “yes”—or even “maybe”—healthcare companies may file a bid protest at the Government Accountability Office (“GAO”) or the U.S. Court of Federal Claims (“COFC”) challenging the award. If successful, the agency will often need to reevaluate proposals and make a new award, giving protestors another opportunity to be selected.Continue Reading A Second Chance to Win Your Government Healthcare Contract
Organizational Conflicts of Interest – Part 3: The Next Target for FCA Enforcement
In the first two parts of this series, we have summarized what constitutes an Organizational Conflict of Interest (“OCI”) in government procurements, and discussed OCIs’ importance in the bid protest arena. But lest you think that, having passed the protest hurdle, you are now free from all harm caused by having an OCI, we now address potential post-award liability stemming from undisclosed and unmitigated OCIs. Contractors found to have undisclosed and unmitigated OCIs, that either existed before award or arose thereafter, can face a variety of bad outcomes—contract termination, suspension or debarment, and liability for fraud under the False Claims Act (“FCA”). Recall that OCIs come in three forms:Continue Reading Organizational Conflicts of Interest – Part 3: The Next Target for FCA Enforcement
Supreme Court Enjoins OSHA Emergency Temporary Standard; Keeps CMS Rule Alive
On January 13, 2022, the Supreme Court reinstated the nationwide injunction of the Occupational Safety and Health Administration’s (OSHA) COVID-19 Emergency Temporary Standard (ETS). (Technically, the Court overturned the Sixth Circuit’s decision dissolving the 5th Circuit’s injunction, discussed in the OSHA Emergency Temporary Standard Survival Guide.) This means the OSHA ETS is no longer in force, and businesses, regardless of size, need not comply with the OSHA ETS vaccine/test mandate.
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MSPV 2.0 Is Dead – Long Live MSPV
It’s official: the Department of Veterans Affairs (“VA”) Medical Surgical Prime Vendor (“MSPV”) 2.0 Program is no more. The VA has announced that it will not revive MSPV 2.0 following several unusually painful protests at the U.S. Court of Federal Claims (see our prior blogs here and here). Instead the VA will move on to MSPV-“Z”. Generally speaking, there seems to be little difference between “2.0” and “Z,” except that some division of geographies may change. But importantly, the VA plans to make clear in the MSPV-Z solicitation—which currently is in the works—whether and when it will transfer the contracts’ requirements to the Defense Logistics Agency (“DLA”), an issue that has drawn significant criticism to date. The VA says it is developing the business case for the transfer, and the business case analysis will determine both whether it will happen at all, and how the VA will execute the transfer. In the meantime, the VA will extend the current bridge contracts under MSPV-Next Generation (“MSPV-NG”) for a full year, running December 2021 to December 2022, while the VA (and likely the DLA) get their ducks in a row.
Continue Reading MSPV 2.0 Is Dead – Long Live MSPV
Duck Hunt – The VA Cannot Escape The Medline Protest, And Takes A Few Shots In The Process
Ignore our prior prediction—the U.S. Court of Federal Claims definitely is NOT remanding the protest by Medline Industries, Inc. (“Medline Protest’) to the agencies for corrective action. In a surprisingly scathing opinion issued June 22, 2021 by Judge David A. Tapp, the court made one thing very clear—the Department of Veterans Affairs’ (“VA”) transfer of its Medical Surgical Prime Vendor (“MSPV 2.0”) requirements to the Defense Logistics Agency (“DLA”) is dead on arrival. After issuing a brief order on June 17 denying remand to the agencies for corrective action, the court detailed its reasoning in an opinion issued in a parallel protest filed by Owens & Minor Distribution, Inc. challenging (slightly) different aspects of the shifting MSPV 2.0 procurement (“O&M Protest”). The government had moved for remand in both protests, and because the Medline Protest and O&M Protest involved the same parties and many common operative facts, the court issued a single opinion denying remand in both—and telegraphing that the outlook for the government in both cases is grim. Piling on, the court took a few shots at the government for its litigation conduct and (more generally) its lack of acquisition planning.
Continue Reading Duck Hunt – The VA Cannot Escape The Medline Protest, And Takes A Few Shots In The Process
Ducks (Not) in a Row – VA Agrees to Take Corrective Action in Transitioning MSPV 2.0 Requirements to DLA
The U.S. Department of Veterans Affairs (“VA”) Medical Surgical Prime Vendor (“MSPV”) 2.0 Program (discussed previously here and here) has yet to make it off the ground, but in March 2021 the VA announced plans to eliminate the program by September 2023 and instead purchase from the Defense Logistics Agency’s (“DLA”) separate MSPV catalog. The VA and DLA MSPV programs are how the VA and DLA (separately) purchase most of their medical, surgical, and laboratory equipment for care centers across the country (and abroad, in the case of DLA). The VA and DLA have been exploring the possibility of consolidation since at least January 2019, but many vendors relied on the VA’s representations that it would not make any decisions on potential consolidation until at least 2025. So when the VA informed stakeholders of its new September 2023 target, Medline Industries, Inc. (“Medline”), one of the prime vendor awardees under the VA’s MSPV 2.0 Program, responded by filing a bid protest at the U.S. Court of Federal Claims. On May 28, 2021, the VA and DLA decided to take corrective action, asking the Court for six months to re-evaluate the issues raised by the protest. It seems that the government did not have all of its ducks in a row prior to announcing the targeted transition.
Continue Reading Ducks (Not) in a Row – VA Agrees to Take Corrective Action in Transitioning MSPV 2.0 Requirements to DLA
“Buy American” Update: Essential Medicines May Continue to Come From Abroad (For Now)
The Biden Administration has taken (at least temporarily) the teeth out of a Trump-era Executive Order that directed the government to “Buy American” for essential drugs and medical devices. President…
Continue Reading “Buy American” Update: Essential Medicines May Continue to Come From Abroad (For Now)
Authorized Government Contractors Now Covered Persons Under the PREP Act
The Secretary of the U.S. Department of Health and Human Services recently added government contractors to the list of entities eligible for immunity from liability under the Secretary’s March 17, 2020, Public Readiness and Emergency Preparedness Act (“PREP Act”) declaration. The PREP Act protects individuals and companies from liability for death or other tort-like harm in connection with the pandemic response, except for cases involving “willful misconduct.” Under the recent amendment, government contractors acting with authorization from an executive department or agency—or who could be so authorized—are protected from liability when they prescribe, administer, deliver, distribute, or dispense Covered Countermeasures, as long as they meet the other requirements of the Act. Covered Countermeasures could include the COVID-19 vaccine or personal protective equipment like respirators. We wrote previously about the evolving list of masks and respirators qualifying as Covered Countermeasures here, here, and here.
Continue Reading Authorized Government Contractors Now Covered Persons Under the PREP Act
“Would You Rather…” – Escobar’s Demanding Materiality Standard or Actual Causation?
According to a recent decision in United States ex rel. Scollick v. Narula, Case No. 14-cv-1339 (D.D.C. Nov. 6, 2020), the fraudulent inducement theory of False Claims Act (“FCA”) liability does not require plaintiffs to satisfy the “demanding” materiality standard set forth in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016). Though that may sound like good news for plaintiffs, it is not. The fraudulent inducement theory holds that fraud in a contractor’s proposal can taint every claim for payment it submits under the resulting contract, making them all “false claims” under the FCA. This bears hefty consequences if proven: the defendant could be liable for civil penalties on every single claim for payment submitted over the life of the contract, in addition to treble damages the government may have suffered as a result of the fraud. Perhaps in recognition of these severe consequences, the U.S. District Court for District of Columbia held that a plaintiff must plead and prove an even higher standard than Escobar materiality to establish fraudulent inducement liability—actual causation. Rather than alleging that misrepresentation by the defendant merely was material to the government’s decision to award the contract to defendant, the Scollick decision concludes that “a misrepresentation in the defendant’s bid must have caused the government to award the defendant the contract.” If the FCA materiality standard is “demanding,” then the actual causation standard is formidable.
Continue Reading “Would You Rather…” – Escobar’s Demanding Materiality Standard or Actual Causation?
“Buy American” Update: FDA Issues List Of Essential Medicines Required By Executive Order
On October 30, 2020 the FDA published a list of essential medicines, medical countermeasures, and critical inputs as required by President Trump’s August 2020 Executive Order on Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States (Executive Order 13944), which required the U.S. government to purchase “essential” medicines and medical supplies produced domestically, rather than abroad. We previously wrote about this Executive Order in August (available here), expecting that once the list was issued, government agencies would begin implementing the “Buy American” priorities for these products and materials. The FDA has identified around 227 drugs and 96 devices, along with their respective critical inputs or active ingredients, that the FDA believes “are medically necessary to have available at all times” for the public health. Agencies across the federal government should now begin making non-competitive awards “to the maximum extent permitted by law,” for drugs and medical supplies on this list that are produced in the United States. We have yet to see how agencies will implement these requirements in regulations or class deviations, but publication of this list is an important first step in implementing the rest of the “Buy American” priorities in the Executive Order.
Continue Reading “Buy American” Update: FDA Issues List Of Essential Medicines Required By Executive Order