There is more than $2 trillion on the line and the multi-trillion-dollar question is: Who’s minding the store?  On March 27, 2020, in response to the financial set-back created by the novel COVID-19 pandemic, President Trump signed into law the more than $2 trillion Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) – by far the largest economic relief package in U.S. history.[1]  The CARES Act’s purpose is to keep the U.S. economy afloat and provide relief to struggling Americans, large corporate sectors, and small businesses while the nation battles this pandemic.  With $500 billion allocated for big corporations, $377 billion for small businesses, and another $153.5 billion for healthcare, these relief moneys (like with most government funds) are sure to come with strings attached in the form of complex regulations and substantial oversight, with enforcement not far behind.
Continue Reading The CARES Act – Who’s Minding the Store?

1. Final Rules Regarding the Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors

On September 24, 2013, the Department of Labor Office of Federal Contract Compliance Programs (OFCCP) published a final rule revising the implementing regulations of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, as amended by the Jobs for Veterans Act of 2002, (VEVRAA). OFCCP is responsible for enforcement of VEVRAA, which prohibits employment discrimination against protected veterans by covered Federal contractors and subcontractors. VEVRAA also requires each covered federal contractor and subcontractor to take affirmative action to employ and advance the employment of these veterans. The final rule strengthens several provisions that are intended to aid in recruitment and hiring efforts, such as clarifying the mandatory job listing requirements, requiring data collection pertaining to protected veteran applicants and hires, and establishing hiring benchmarks to assist in measuring the effectiveness of the affirmative action efforts. 78 Fed. Reg. 58614 (Sept. 23, 2013).


Continue Reading Government Procurement: September and October 2013 Federal Register Update

1. Repeal of Sunset Dates for Protest Authority Over Certain Task Orders

Effective September 3, 2013, FAR 16.505 was amended to eliminate the sunset dates for protests against the issuance of an order under a task-order or delivery-order contract in excess of $10 million by the DoD, NASA and the Coast Guard. Previously, the FAR stated that the authority to bring such a protest would expire on September 30, 2016 and made no distinctions as to which agency the rule applied. The new rule now expressly states that there is no such expiration date for protests against the placement of an order by or on behalf of the DoD, NASA and Coast Guard. However, for the time being, the September 2016 sunset date remains for other agencies. (FAR Case 2013-11).


Continue Reading Details: Highlights from the August & September 2013 Federal Register

Over the first half of the year there has been a lot of activity surrounding government efforts to confront growing concern over “Cybersecurity.” This flurry of activity comes in the wake of two years during which lawmakers have been unable to define legislatively what, exactly, “cybersecurity” is, what it means, and how it should be mandated and implemented. But Congress’ failures have not halted the piecemeal charge that is pushing unabated into the cybersecurity realm. For example, the Pentagon is seeking roughly $23 billion to fund computer network defense and computer network attack initiatives through FY 2018, beginning with a $4.65 billion bump for such efforts in FY 2014. It is clear that the government is in the midst of a “cyber-gold rush” and savvy and innovative contractors practicing in this realm are poised to benefit. However, the increased attention cybersecurity is getting will also pose significant hurdles to businesses throughout the country.
Continue Reading New Laws and Firewalls – Summer 2013 Cyber Security Round-up

By John W. Chierichella

On September 8, 2008, we posted a commentary on a newly promulgated interim rule relating to “Export-Controlled Items,” that was finalized in 2010 and is now set forth at DFARS Subpart 204.73 and implemented in principal part by the clause set forth at 52.204-7008. Click here. That rule was relatively straightforward, basically reminding DOD contractors (1) that they were obligated to “comply with all applicable laws and regulations regarding export-controlled items” and (2) that those compliance obligations existed independent of the new DFARS rule and its implementing clause. In reality, while the clause had the capacity to transform an export violation into a breach of contract, with all of the attendant liabilities and risks that attend such breaches, it imposed no new substantive obligations on DOD contractors.


Continue Reading DOE Proposes Highly Burdensome Reporting Obligations With Respect To Export Compliance

By David Gallacher 

Last month we wrote about a provision in the proposed 2013 National Defense Authorization Act (“NDAA”) that would have given the Defense Contract Audit Agency (“DCAA”) statutory authority to demand a company’s internal audit reports in order to audit the efficacy of a company’s internal business systems. Surprisingly, the authorization, as originally proposed, was modified in the final legislation. While Congress directed DCAA to issue new guidance regarding auditor access to internal audit reports, Congress stopped short of giving DCAA actual authority to demand such reports. As such, contractors will remain at loggerheads with DCAA auditors who try to exceed their statutory authority.


Continue Reading Smash & Grab Redux – Congress Seems to Give DCAA Permission But Forgets to Give It Authority

By David Gallacher 

The Defense Contract Audit Agency (“DCAA”) has long sought access to contractors’ internal audit reports in connection with the routine audit of contractors’ business systems. Contractors have, in most cases, successfully resisted requests for such access on the grounds that DCAA has no statutory authority to request such documents. But that may soon change. Section 843 of the Senate version of the 2013 National Defense Authorization Act (S. 3254) would grant DCAA broad access to contractor internal audit information.


Continue Reading Smash & Grab – DCAA Poised to Gain Access to Contractor Internal Audit Reports

By John W. Chierichella and Alexander W. Major 

Sequestration is slated to start January 2, 2013. Under the terms of the Budget Control Act of 2011, OMB must trim $1.2 trillion evenly from the budgets of civilian agencies and the Department of Defense from 2013 through 2021, an annual reduction of $109 billion. In a report issued on September 14th, OMB started that process, providing initial estimates of what, exactly, would be sequestered from discretionary programs (i.e. non-entitlements) in the 2013 budget, including approximately $54 billion spread across the civilian agencies and $54 billion from the DoD budget, which includes a cut in funds for “overseas contingency operations,” i.e. war spending. The same requirement will continue for the next nine years. However, after 2013, the Appropriations Committees will be allowed to determine how it will apply the cuts to live within the Budget Control Act’s mandatory reduced spending caps.


Continue Reading Sequestration: Funding Shortfalls and Unrequited Patriotism

By David S. Gallacher and Kerry O’Neill

Last April, we wrote about proposed changes to Department of Defense ("DoD") reporting requirements for independent research and development ("IR&D"), raising concerns about how the proposed change would tie recoverability of IR&D costs to new reporting and disclosure requirements. Recently, Defense Federal Acquisition Regulation Supplement ("DFARS") 231.205-18(c) was finalized, with changes. See 77 Fed. Reg. 4632 (Jan. 30, 2012). This final rule is a mixed bag that got some things right, but also leaves some of the most serious issues unresolved.


Continue Reading Final Rule for IR&D Reports Fails to Address Most Serious Questions

By: David S. Gallacher

2011 was a banner year for U.S. export control laws. The Obama administration has vowed to streamline and reform the bloated U.S. export control system – promising to build "higher walls" around a narrower universe of goods and technologies requiring export licenses. Following is a summary of ten of the key reforms to U.S. export laws that took place (or were proposed) in 2011. 
 


Continue Reading 2011 Year In Review: Export Controls and Promised Reforms

By: David S. Gallacher

Just in time for the end-of-year push to fund the Government and to "create more jobs," members of Congress and President Obama had a rare moment of consensus when they unanimously(!) repealed an extremely unpopular withholding requirement that has been haunting recipients of federal funds since 2005. The "3% Withholding Repeal and Job Creation Act" was signed into law on November 21, 2011 (Pub. L. No. 112-56, Title I), eliminating a requirement to withhold 3% on most payments to contractors and grant recipients. While there are many in Government and industry alike who are ecstatic at the passage of the Act, the Ghost of Christmas Future warns that this specter of "withholding" may not have yet fled the scene. Like poor, chained Jacob Marley from Dickens’ A Christmas Carol, industry may yet find itself captive, bound, and double-ironed by future Congressional plots to confiscate funds from government contractors. Miserly grasping for every penny, one can almost hear the federal Government grumbling, "Bah! Humbug!"


Continue Reading “Bah! Humbug!” – 3% Withholding and the Ghost of Christmas Future