Buyer Beware: Outsourcing Labor Puts You at Risk of Prevailing Wage Violations

March 11, 2019
By Nichole D. Atallah
Recently, a Department of Labor (DOL) investigation found that four federal contractors were responsible for paying 53 current and former employees a total of $255,474 for violating the Davis-Bacon and Related Acts (DBRA). DOL determined the contractors failed to pay the correct prevailing wages and fringe benefits. In this case, the prime contractor subcontracted with a temporary staffing company that failed to pay cleaning service crews in accordance with DBRA requirements. The temporary employees were misclassified and not paid the required prevailing wage rates. Another subcontractor also failed to pay the correct fringe benefits. Due to the repeated and willful nature of these violations, one of the contractors and its owner have been declared ineligible to bid on federal DBRA contracts for a period of 3 years.

Is Cyber Insurance Worthless in the Age of Quasi-State-Sponsored Hacking?

March 8, 2019
By Isaias Alba IV
I'm sure everyone has heard it before: commentators, pundits, and even members of the 809 Panel have stated that "we are at war!" Most of these claims revolve less around ground combat or air battles than the fact that more countries are investing in and deploying cyber assets to destroy not just the defense networks of other countries, but their economic systems as well. Thus, it stands to reason that some of the cyber threats seen in the wild are not just from random hackers in basements or dark apartments, but from state actors or quasi-state actors operating directly or indirectly at the behest of governments. Further, there are even more hackers working for terrorist organizations criminal enterprises financially connected to terror organizations, or "lone wolf" actors whose motives some would contend to be "terrorist" in nature. This fact runs headlong into a provision contained in many cyber insurance contracts that state the insurer does not have to pay for incidents caused by an "act of war" or "act of terror." It is this very exclusion that is at play in recent a multi-million dollar lawsuit. Specifically, if the insurance company defendant prevails and more insurers attempt to use this exception to avoid paying for damages caused by malware suspected of being tied to state actors or terrorist organizations, cyber insurance could become virtually worthless.

Small Business Subcontractor Recertifications

February 27, 2019
By Megan C. Connor
I spoke at the TRI-Association Small Business Advisory Panel (TRIAD) Winter Meeting a couple weeks ago in Nashville, and a number of attendees asked me questions about how often a large prime contractor must require its small business subcontractors to recertify size/status during the term of a subcontract. SBA's regulations and the FAR indicate that a subcontractor's status for a particular subcontract is established at the time the subcontractor submits its offer for the subcontract, and a prime contractor may rely on that representation for the life of the subcontract.

PilieroMazza Litigation Team Wins Long-Odds Appeal of New York Stock Exchange Delisting Decision

February 22, 2019
By Pamela J. Mazza
Recently, PilieroMazza had the privilege of representing India Globalization Capital, Inc. (NYSE: IGC) on its appeal of a decision by the New York Stock Exchange ("NYSE American" or "the Exchange") to delist IGC's common stock from trading on the Exchange. Victories in NYSE appeals are rare and extremely difficult to come by, particularly when the Exchange's delisting decision is based on subjective and discretionary criteria. In these types of proceedings, the odds are always stacked against the company. But ultimately, even against those odds, truth wins out; the Exchange's delisting procedures allow for a meaningful presentation of evidence to rebut the decision, and under the right circumstances, a company can be vindicated.

TINA Traps: Defective Pricing in Competitively Awarded IDIQ Contracts

February 13, 2019
By Isaias Alba IV
While there has been extensive coverage of the fact that Truth in Negotiations Act ("TINA") thresholds for DoD were increased from $750,000 to $2M and certain civilian agencies have adopted the thresholds either via a FAR deviation or on an ad hoc basis, we have seen an increase in clients falling into insidious TINA traps—task orders on competitively awarded IDIQ contracts that require new labor categories or requirements not contemplated under the initial RFP.
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