The Government’s Playbook – Your Guide to Uncle Sam’s Negotiating Techniques

If you follow professional football, you are familiar with the message generally given to an aspiring player just before he is cut – “Coach wants to see you.  Bring your playbook.”  The playbook, that step-by-step guide to on-the-field success, is something that teams guard zealously.

Not all teams, however, maintain the secrecy of their playbooks, and the U.S. Government is a case in point.  The Government actually publishes its playbook of bargaining techniques recommended for its contract negotiators.  Like the Commandments Moses brought down from Mount Sinai, the Government playbook consists of 10 Rules.  These Rules can be found in Chapter 6 of Volume 5 of the DoD’s Contract Pricing Reference Guides.  The Rules are all reasonable and, in many ways, predictable. Because “Forewarned is forearmed,” here they are – Continue Reading

“Internet of Things” Guidance to be Added to Cybersecurity Requirements for Agencies and Federal Contractors

In 2019, cybersecurity has become top-of-mind for most federal government contractors and agencies that share sensitive information.  In addition to updated Department of Defense guidance and procedures for evaluating contractors’ compliance with cybersecurity requirements, as well as an increase in Department of Defense cybersecurity audits, the Federal Acquisition Regulation (FAR) council also has promised a new FAR clause that will require compliance with NIST SP 800-171 security controls for civilian agency contractors that receive or create Controlled Unclassified Information (CUI). Continue Reading

SEC Issues Risk Alert on Customer Privacy Safeguards

Earlier this month, the Securities and Exchange Commission (“SEC”) took a break from its recent focus on digital assets and the Best Interest fiduciary standard to publish a Risk Alert encouraging investment advisers and broker-dealers to revisit their policies and procedures relating to Regulation S-P (“Reg S-P”) (17 C.F.R. Part 248, Subpart A), which sets out requirements designed to protect customer information and records. The Alert highlights several key compliance issues identified by the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) during exams completed in the past two years. Continue Reading

Resurrecting the Spare Parts Bogeyman – A Refresher on Why the Government Gets It Wrong

The April issue of National Defense Magazine brought a well-written article by Susan Cassidy and her colleagues at Covington & Burling LLP on a recent DOD IG report analyzing (and criticizing) spare aviation parts pricing, even though the report concluded that the contractor in question had complied with the Truthful Cost or Pricing Data Act. The article addresses the IG’s concept of a fair profit – which is abjectly divorced from reality – and it notes that the GAO has been conducting a study of spare parts purchasing with a promise of recommendations to improve transparency in this area. I commend the article to anyone who operates in the spares market and wants to know where the Government is heading in relation to spares pricing.

With the IG and the GAO injecting themselves – yet again – into the spare parts market and decrying the rapacious contractors who dare to sell at prices that the Government regards as outrageous (after all, why in the world would anyone think that a profit rate in excess of 15% on a firm fixed price contract was reasonable?) it seems like a good time to revisit the reasons why the Government’s periodic complaints about spare parts pricing are generally myopic and wrong. And so, because no criticism of Government contractors ever goes away forever, I offer for your consumption a refresher: the re-publication of a posting that I authored in November 2014, entitled “How Dare You Charge That for a Spare Part!” – The Untold Story of the X27 Interface Assembly” – Continue Reading

VA Vendors Beware: Mind the Company You Keep; It’s Time for a Compliance Checkup

Department of Veterans Affairs (VA) acquisitions are about to get a lot more attention – from the VA Office of Inspector General (OIG), the U.S. Department of Justice (DOJ), and possibly Congress, as well. The U.S. Government Accountability Office (GAO) recently published a report (GAO-19-157SP) updating its “High Risk List,” which lists 35 government agencies and programs that may be particularly vulnerable to fraud, waste, abuse, and mismanagement, adding “VA Acquisition Management” to the list of the usual suspects. If, as Aesop opined, “a man is known by the company he keeps,” then the VA has now joined a notorious group. VA vendors should be aware of this development, because any attempt by the VA to “get well” will likely come with heightened compliance obligations for VA vendors. Continue Reading

OH SNAP! Supreme Court to Take on Meaning of Key FOIA Exemption

On January 11, 2019, the Supreme Court granted a petition for writ of certiorari over an Eighth Circuit decision involving Exemption 4 of the Freedom of Information Act (“FOIA”), which protects from public disclosure “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” This marks the first time the Supreme Court has agreed to hear a case involving this important exemption. Continue Reading

“Nanny” Government Rebuffed in Prosecution of Former Barclays Trader

Once again, the Department of Justice’s (DOJ) efforts to hold a trader accountable for misrepresentations made during negotiations met with stiff resistance from the courts. On March 4, 2019, Judge Charles Breyer of the Northern District of California granted Robert Bogucki’s motion to dismiss the indictment in the middle of his criminal trial, ruling that the Government failed to prove that Bogucki’s statements could not possibly amount to fraud because there is no expectation of truth in the discussions between Bogucki and his customer. Judge Breyer’s ruling parallels the Second Circuit’s highly publicized 2018 repudiation of the DOJ’s attempts to prosecute Jessie Litvak, a former bond trader, for similar misrepresentations made in connection with trading residential mortgage-backed securities. Continue Reading

“Buy American” Updates: Trump’s Executive Orders, Government Reports, and Other Updates

Few phrases sum up the Trump administration’s policy goals better than “Buy American.” We hear it in advertising; we hear it in the State of the Union; and we find it littered throughout government buying priorities. Here is a short primer on some recent developments out of the White House regarding the oft-invoked (and often misunderstood) requirement to “Buy American,” including a new Executive Order issued just last month. Continue Reading

More Opportunities On the Horizon for Small Businesses Seeking to Sell Cloud Computing to the Government

Each year, the Government purchases more and more cloud computing from contractors.  But while many small businesses can provide cloud computing, the current rules associated with small business set-aside contracts prevent agencies from awarding prime contracts with a large cloud computing component to small businesses. Continue Reading

Where is the Love? Exchanges Sue SEC Over Market Access Fee Pilot Program

Three prominent trading exchanges did not exactly show their government overseer the love this Valentine’s week.  On February 14, 2019, the New York Stock Exchange (“NYSE”) filed a petition for review to the U.S. Court of Appeals for the District of Columbia Circuit against the Securities Exchange Commission (“SEC”), seeking review of a controversial transaction fee pilot program, slated to take effect in April.  The Cboe and Nasdaq literally followed suit a day later, with nearly identical petitions.  The petitions seek a ruling that the pilot program is unlawful under the Securities Exchange Act of 1934 and the Administrative Procedure Act and a permanent injunction barring the SEC from implementing the pilot program.  Continue Reading

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