In the 10th edition of the “OIG Shorts” series, Sheppard Mullin’s Organizational Integrity Group continued its exploration of a number of complex compliance matters with a discussion on Setting the Table for Good Decision-Making: And Making Sure the Chief Legal Officer Has a Seat at It. This post discusses why it’s important that Chief Legal Officers and Chief Ethics & Compliance Officers have meaningful, real-time involvement in the key legal, organizational, reputational, and business discussions/decisions of their companies, as well as direct access to the Chief Executive Officer and the Board.…

Continue Reading Organizational Integrity Shorts: A Seat at the Table

It’s starting to feel like summer in Washington, DC and like most Washingtonians, the GSA and SBA are thinking about pools. So throw on some flip flops, grab a cold beverage, and let’s dive in to the 8(a) Multiple Award Schedule (“MAS”) Pool Initiative (and, obviously, prepare yourself for many, many more pool-themed puns).…

Continue Reading Let’s Go Swimming: Small Disadvantaged Business Growth Targeted by SBA and GSA 8(a) MAS Pool Initiative

Summer is here and we’re back with another edition of the Cost Corner, where we provide practical insight into the complex cost and pricing requirements that apply to Government contractors. We just completed a two-part series on the Truthful Cost or Pricing Data Statute, commonly known as the Truth in Negotiations Act (TINA).[1] We will return to TINA in a few months to address the Defense Contract Audit Agency’s (DCAA) playbook for defective pricing audits. But first, we embark on a two-part series regarding DCAA audits generally. Part 1 (this article) provides an overview of DCAA’s mission, organization, audit guidance, and audit rights. We also address the types of audits DCAA conducts and recent DCAA audit statistics. Part 2 (our next article) will focus on DCAA’s audit guidance, audit procedures, and best practices for contractors dealing with DCAA audits.…

Continue Reading The Cost Corner: Government Contracts Cost and Pricing – DCAA Audits

A few months ago we wrote about Congress utilizing the Inflation Reduction Act of 2022 to offer bonus tax credits[1] to certain energy facilities for meeting specified “domestic content” requirements.[2] Relying heavily on the Government’s prior experience with domestic content authorities, including the Federal Transit Authority’s (“FTA”) “Buy America” regulations, we discussed how the regulations, as written, left the renewable energy industry with more questions than answers on the applicability of the domestic content bonus tax credit to their current and future projects. Though we walked through our then-understanding of the regulations, including providing our own step-by-step analysis of how to comply with, and therefore receive, this domestic content bonus credit, we recognized that Treasury was in the process of issuing guidance that (we hoped) would shed more light on compliance obligations. After months of waiting, on May 12, 2023, Treasury, along with the Internal Revenue Service (“IRS”), released its long awaited Guidance (Notice 2023-38). In all fairness to Treasury, the Guidance does provide answers to many lingering questions. But, at the same time, the Guidance provides analysis that differs both from industry’s expectations and the FTA’s Buy America regulations in several significant respects – potentially opening a new can of compliance questions and concerns.…

Continue Reading Treasury Issues New Proposed Guidance on Domestic Content Requirements of the Inflation Reduction Act – Updated Qualification Analysis and (Still) Lingering Questions

It has been another busy year for the Department of Justice’s Procurement Collusion Strike Force (PCSF). Formed in 2019, the Department of Justice created the PCSF, a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government – federal, state and local. The PCSF is a constellation of partnerships among the Antitrust Division of the U.S. Department of Justice, multiple U.S. Attorneys’ Offices around the country, the Federal Bureau of Investigation (FBI), and the Inspectors General for multiple federal agencies working together to crack down on unlawful anticompetitive activities in the public procurement process.…

Continue Reading Government Contracting Companies Beware: DOJ’s Procurement Collusion Strike Force is Global, Growing, and Going Strong

On June 9, 2023, OMB released additional guidance on the implementation of OMB Memorandum M-22-18, Enhancing the Security of the Software Supply Chain through Secure Software Development Practice, which requires that federal agencies only use third-party software that is provided by software producers that attest compliance with the secure software development guidance issued by the National Institute of Standards and Technology (NIST). Agencies must obtain a self-attestation from the software producer before using any software that “affects” government information or will be used on government information systems. The requirements are discussed in more detail here.…

Continue Reading White House Provides New Guidance & Extends Deadline for Secure Software Attestations

On June 1, 2023, the Supreme Court issued a unanimous decision holding that the scienter element of the False Claims Act (“FCA”) is met if a defendant subjectively knew his or her claims were false and submitted them anyway. See United States ex rel. Schutte v. SuperValu Inc. and United States ex rel. Proctor v. Safeway. The Court’s ruling was narrow and avoided the more challenging—and common—issues raised during oral argument (which we blogged about previously).…

Continue Reading Supreme Court Clarifies that Subjective (Not Objective) Knowledge of Falsity of Claim Dictates False Claims Act Liability

The Department of Homeland Security (“DHS”) announced on May 4, 2023 a planned end to the COVID-19 remote I-9 flexibility. The flexibility ends on July 31 and prior pandemic I-9s must be remediated by Aug 30, 2023. Therefore, employers should act quickly to review and remediate I-9s that were verified remotely in the past three years.…

Continue Reading ICE Announces July and August Deadlines for Employers: Preparing for the DHS Planned Sunset of the COVID Pandemic Remote I-9 Verification Accommodations

Over the last several years, the Securities and Exchange Commission (the “SEC”) and the Commodities Futures Trading Commission (“CFTC”) have been laser-focused on the use of so called “off-channel communications” in the financial services industry. On the theory that employees’ use of personal devices to communicate about business matters violates the “books and records” rules as these communications are not saved in company systems, regulators have conducted intrusive and extensive investigations requiring employees to turn over their personal devices for review. SEC Chairperson Gary Gensler recently stated that “bookkeeping sweeps are ongoing,” having resulted in well over $1 billion in fines so far. While the first round of investigations focused on the large banks, this “sweep” has since spread to hedge funds, credit rating agencies, online banking platforms, and now, to regional banks.…

Continue Reading SEC Off-Channel Communications Sweep

The National Institute of Standards and Technology (NIST) has released an initial public draft of NIST SP 800-171, Revision 3, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. Compliance with the security controls in NIST SP 800-171 is required for Department of Defense contractors and is expected to be incorporated into a new Federal Acquisition Regulation (FAR) clause and required for all federal contractors that process, store, or transmit Controlled Unclassified Information (CUI). …

Continue Reading NIST Releases Initial Public Draft of NIST SP 800-171, Revision 3 for Protection of Sensitive Government Information