PilieroMazza PLLC. RSS Feedhttps://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10en-us12 Dec 2018firmwisehttp://blogs.law.harvard.edu/tech/rssGovCon Buy and Sell Strategies in a Hot Markethttps://www.pilieromazza.com/?t=40&an=86563&format=xml22 Jan 2019Events<h3 style="text-align: center;"><span style="color: rgb(9, 54, 122);">GovCon Buy and Sell Strategies in a Hot Market</span></h3> <h3 style="text-align: center;"><span style="color: rgb(9, 54, 122);">January 22, 2019, Tuesday 7:30 am &ndash; 9:30 am</span></h3> <h4 style="text-align: center;"><span style="color: rgb(177, 143, 80);">Breakfast and panel presentation</span></h4> <h4 style="text-align: center;"><span style="color: rgb(177, 143, 80);">Tower Club, Tysons Corner</span></h4> <div>Get the New Year started right by joining us at the Tower Club - Tysons for a private breakfast session on today&rsquo;s hot GovCon Market. Hear from an owner who just completed the sale of his SDVOSB company along with a top M&amp;A adviser, lawyer, and private banking expert skilled at GovCon transfers. Get new insider tips on:</div> <ul> <li>2019&rsquo;s market and key success factors for GovCon M&amp;A transactions</li> <li>New Financing options</li> <li>Best deal structures to grow via acquisition</li> <li>Ways of selling while retaining some equity</li> <li>Multiple paths to exit and lift off to your next goal</li> </ul> <span style="color: rgb(9, 54, 122);"><span style="font-size: larger;"><strong><br /> Speakers:</strong></span></span><strong><br /> Cy Alba</strong>, Partner, PilieroMazza, Government Contracts Law Group<br /> <strong>Sharon Heaton</strong>, CEO, sb LiftOff<br type="_moz" /> <strong>Erin Andrew</strong>, Managing Director, Live Oak Bank<br /> <br /> <strong><br /> The details:</strong><br type="_moz" /> <table width="400" border="1" cellpadding="3" cellspacing="3" align="left"> <tbody> <tr> <td><strong>&nbsp;Date:</strong></td> <td>&nbsp;Tuesday, January 22, 2019</td> </tr> <tr> <td><strong>&nbsp;Time:</strong></td> <td>&nbsp;7:30 am - 9:30 am</td> </tr> <tr> <td><strong>&nbsp;Place:</strong></td> <td> <p>&nbsp;Tower Club<br /> &nbsp;8000 Tower Crescent Dr.<br /> &nbsp;Suite 1700<br /> &nbsp;Vienna, VA 22182</p> </td> </tr> <tr> <td><strong>&nbsp;Cost:</strong></td> <td> <p>&nbsp;Free to&nbsp;Business Owners&nbsp;<br /> &nbsp;No service providers please</p> </td> </tr> </tbody> </table> <h3>&nbsp; &nbsp; &nbsp;SPONSORED BY:</h3> <div>&nbsp; &nbsp; &nbsp;<img src="https://www.pilieromazza.com/7A2372/assets/images/Logos/PMP sbLiftoff LiveOak.png" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="400" height="148" /><br /> <br /> <br /> <br /> <br /> <br /> <a href="https://www.eventbrite.com/e/govcon-buy-and-sell-strategies-in-a-hot-market-tickets-53438880129?aff=utm_source%3Deb_email%26utm_medium%3Demail%26utm_campaign%3Dnew_event_email&amp;utm_term=eventurl_text" target="_blank"><img src="https://www.pilieromazza.com/7A2372/assets/images/RegisterHere.jpg" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="146" height="41" /></a></div>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Contractor Teaming Agreements: Necessary or Not Worth it?https://www.pilieromazza.com/?t=40&an=86604&format=xml12 Dec 2018Events<h4 style="text-align: center;">In Partnership with Dixon Hughes Goodman</h4> <br /> Many companies enter into Teaming Agreements (TAs) when pursuing government contracts. Every company has its own reason to enter into an agreement to team with someone else, but there are legal, operational and management issues that sometimes lead to disputes and enforceability challenges down the road. So the question that each company should ask, is it necessary and is it worth the investment of our time and money? <br /> Please join DHG's Bill Walter and his special guest Antonio Franco of PilieroMazza as they discuss Teaming Agreements - the good, the bad and the ugly. Topics will include: <br /> <ul> <li>Potential benefits of teaming</li> <li>What a TA is - and what a it is not!</li> <li>The role of team members and obligations downstream</li> <li>Setting expectations</li> <li>Performing due diligence</li> <li>Recent judicial guidance on teaming agreements</li> </ul> Date: Wednesday, December 12, 2018<br /> Time: 11:00 am - 12:00 pm<br /> Location: Online<br /> Price: Free<br /> <br /> <a href="https://register.gotowebinar.com/register/6424885541484405251?mkt_tok=eyJpIjoiTkRSaU1ESmpNR1V3TjJJdyIsInQiOiJcL2w5bGZObWFYOTdPcWpOblpjb0RqMnZRRWlmdjQ4VDFRTG5pZ1RJOTFRSUcxM29TQTIwdjlEZFVjN1oyeStZY0JaTHM1bWlOTW5yMWp0SGROXC8wM3RhR2orSmE2QkpwUGxKbHJnaGtybXczdTYwTkJuSEJZU2UxUGxYS0poY1ZQIn0%3D" target="_blank"><img src="https://www.pilieromazza.com/7A2372/assets/images/RegisterHere.jpg" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="146" height="41" /></a><br type="_moz" /> <br type="_moz" /> <br />https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Congress Passes New Receipts Calculation for Determining the Size of Small Businesseshttps://www.pilieromazza.com/?t=40&an=86535&format=xml12 Dec 2018Blog<span style="font-size: larger;"><strong>By Emily J. Rouleau</strong></span><br /> <br /> On December 6, 2018, the Senate passed the <a href="https://www.congress.gov/bill/115th-congress/house-bill/6330/text?q=%7B%22search%22%3A%5B%22actionDate%3A%5C%22115%7C2018-10-26%5C%22+AND+%28billIsReserved%3A%5C%22N%5C%22+OR+type%3A%5C%22AMENDMENT%5C%22%29%22%5D%7D" target="_blank">Small Business Runway Extension Act (HR 6330)</a>, which amends the Small Business Act by changing the time period for determining a company&rsquo;s size based on average annual receipts. Initially, the Small Business Act required a company&rsquo;s compliance with the size standards to be prescribed on the basis of the company&rsquo;s average annual receipts from the previous three years; the Small Business Runway Extension Act extends this time to the previous five years. The House passed the bill on September 25, 2018, and on December 11, 2018, it was presented to President Trump to be signed into law.<br /> <br /> This change gives businesses a longer time period during which to qualify as a small business. The House Committee on Small Business, where the bill was initially referred, <a href="https://www.congress.gov/115/crpt/hrpt939/CRPT-115hrpt939.pdf" target="_blank">reported</a> that the modification to the size formula was designed to &ldquo;reduce the impact of rapid-growth years which result in spikes in revenue that may prematurely eject a small business out of their small size standard&rdquo; and give entry-level small businesses more time to grow and develop their competitiveness and infrastructure. However, <a href="https://www.pilieromazza.com/new-receipts-calculation-for-federal-contractors" target="_blank">as discussed</a> in further detail by my colleague, Megan Connor, the law assumes that businesses&rsquo; revenues generally grow year by year at a steady rate, which is not true for all companies. Consequently, some businesses will benefit from the change while others may no longer qualify as small.<br /> <br /> Once signed into law by President Trump, the bill will become effective. It is unclear what effect the law will have on contractors whose small business size status will be impacted or how SBA will apply the law versus the language of its current regulations. SBA may potentially implement an interim rule to effectuate the law. However, since statutes technically &ldquo;trump&rdquo; regulations, legally the five-year lookback period is effective upon signature by the President. If signed into law before January 1, this may have profound consequences for contractors who will need to update their SAM registrations in the new year. Let us know if you have any questions about how the law will impact you.<br /> <br /> <span style="font-size: small;"><em>Originally posted on December 7, 2018, this post was updated on December 12, 2018.</em><br /> </span> <br /> <span style="font-size: small;"><strong>About the Author:</strong> <em>Emily Rouleau is an associate with PilieroMazza. She may be reached at </em></span><a href="mailto:erouleau@pilieromazza.com"><span style="font-size: small;"><em>erouleau@pilieromazza.com</em></span></a><span style="font-size: small;"><em>.</em></span>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Important Changes Governing Limitations on Subcontracting Immediately Affecting All DoD Procurementshttps://www.pilieromazza.com/?t=40&an=86540&format=xml07 Dec 2018Blog<img src="https://www.pilieromazza.com/7A2372/assets/images/Attorneys/2/150x150/Flood.jpg" hspace="5" vspace="5" align="left" alt="" border="0" width="150" height="150" />In a welcome step towards regulatory conformity, on December 4, 2018, the FAR Council finally issued its <a href="https://www.federalregister.gov/documents/2018/12/04/2018-25506/federal-acquisition-regulation-revision-of-limitations-on-subcontracting" target="_blank">proposed rule</a> to bring the FAR into compliance with the statutory requirements of &sect; 1651 of the NDAA for FY 2013, which governs limitations on subcontracting. The proposed rule will conform the FAR&rsquo;s limitations on subcontracting clause, FAR 52.219-14, with how SBA performs the calculation, codified at 13 C.F.R. &sect; 125.6.<br /> <br /> The proposed rule signals an end to two years of relative uncertainty for contractors regarding whose limitation on subcontracting calculation should apply to their contracts&mdash;the FAR&rsquo;s or SBA&rsquo;s. The old formula still found in the FAR calculates compliance based on the prime contractor&rsquo;s cost of personnel; the new formulation found in SBA&rsquo;s current rule (and adopted by Congress) follows a calculation based on total contract revenues. The new SBA formulation also adopted the much-publicized concept of counting work performed by &ldquo;similarly situated&rdquo; entities towards compliance.<br /> <br /> The proposed rule also adopts consistent applications of the limitations on subcontracting and nonmanufacturer rules, as found in SBA&rsquo;s regulations. Once the proposed rule is finalized, the FAR will clarify that <u>limitations on subcontracting and the nonmanufacturer rule do not apply on small business set-aside contracts valued at or below $150,000</u>, but that they do apply to set-aside and sole source awards under the other small business programs, regardless of dollar value (i.e., all HUBZone, 8(a), SDVOSB, and WOSB set-aside or sole source awards, even those under $150,000).<br /> <br /> In an additional important development, on December 3, 2018, DoD issued a <a href="https://www.acq.osd.mil/dpap/policy/policyvault/USA003103-18-DPC.pdf" target="_blank">class deviation</a>, effective immediately, to implement SBA&rsquo;s formulation of the limitations on subcontracting and nonmanufacturer rule for all DoD contracts awarded to small businesses or under SBA socioeconomic programs. The deviation requires DoD contracting officers to use specified alternate clauses in all set-aside procurements, which follows the language included in the proposed rule. This means that for all DoD procurements, SBA&rsquo;s formulation of the limitations on subcontracting and nonmanufacturer rule now govern, at least until the proposed rule to the FAR is finalized. We&rsquo;ll see if the civilian agencies follow DoD&rsquo;s example in implementing a similar class deviation for their set-aside procurements.<br /> <br /> <span style="font-size: small;"><strong>About the Author:</strong> <em>Katie Flood is counsel with PilieroMazza in the Government Contracts Group. She may be reached at </em></span><a href="mailto:kflood@pilieromazza.com"><span style="font-size: small;"><em>kflood@pilieromazza.com</em></span></a><span style="font-size: small;"><em>.</em></span>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10SBA Proposes Significant Changes to Its Small Business Regulationshttps://www.pilieromazza.com/?t=40&an=86541&format=xml07 Dec 2018Blog<img src="https://www.pilieromazza.com/7A2372/assets/images/Attorneys/2/150x150/Finnerty.jpg" hspace="5" vspace="5" align="left" alt="" border="0" width="150" height="150" />On December 4, 2018, the U.S. Small Business Administration (&ldquo;SBA&rdquo;) issued a <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-25705.pdf" target="_blank">proposed rule</a> (&ldquo;Rule&rdquo;) to implement several provisions of the National Defense Authorization Acts (&ldquo;NDAA&rdquo;) of 2016 and 2017 and the Recovery Improvements for Small Entities After Disaster Act of 2015 (&ldquo;RISE Act&rdquo;), as well as other clarifying amendments. The Rule will likely garner a lot of attention in the coming weeks, as it proposes a number of sweeping amendments that could have a significant impact on small business government contracting. Indeed, the proposed revisions address key small business issues such as subcontracting plans, the non-manufacturer rule (&ldquo;NMR&rdquo;), Information Technology Value Added Reseller (&ldquo;ITVAR&rdquo;) procurements, limitations on subcontracting (&ldquo;LOS&rdquo;), recertification, size determinations, and the ostensible subcontractor rule. Below, we summarize some of the more notable amendments that will impact small business procurement.<br /> <br /> <strong>Subcontracting Plans<br /> </strong><br /> Consistent with the 2017 NDAA, the Rule states that it shall be a material breach of contract when a contractor or subcontractor fails to comply in good faith with its subcontracting plan requirements, including failing to provide reports and/or cooperate in studies or surveys to determine the extent of compliance. The Rule provides a number of examples of what constitutes a failure to make &ldquo;good faith&rdquo; efforts, including, among others, (1) failing to timely submit subcontracting reports and (2) failing to pay small business subcontractors in accordance with the terms of the contract. The Rule also provides that failure to make a good faith effort may be considered in any past performance evaluation of the contractor.<br /> <br /> With respect to subcontracting plans, the Rule also requires other than small prime contractors with commercial subcontracting plans to include indirect costs in their subcontracting goals. According to SBA, the burden imposed by this change would be <em>de minimis</em>, as approximately 95% of the firms with commercial subcontracting plans in 2017 already included indirect costs in their subcontracting goals.<br /> <br /> <strong>Small Business Contracting in Disaster Areas<br /> </strong><br /> SBA is proposing to implement certain provisions of the RISE Act to establish contracting preferences for small business concerns (&ldquo;SBC&rdquo;) located in disaster areas and to provide agencies with double credit for awards to such concerns. Under the Rule, SBA would use the existing FAR definitions to provide that an agency will receive credit for an &ldquo;emergency response contract&rdquo; awarded to a &ldquo;local firm&rdquo; that qualifies as an SBC under the applicable size standard for a &ldquo;major disaster or emergency area.&rdquo; According to the Rule, a concern is &ldquo;located in a disaster area,&rdquo; if, during the last twelve months, it had its main operating office in the area and that office generated at least half of the firm&rsquo;s gross revenues and employed at least half of the firm&rsquo;s permanent employees. The Rule provides a number of factors that SBA will consider if the firm does not meet the foregoing criteria in order to determine whether the firm resides or primarily does business in a disaster area.<br /> <br /> <strong>NMR Size Standard Does Not Apply to ITVAR Procurements<br /> </strong><br /> Since 2014, the table of size standards in SBA&rsquo;s regulations has provided that ITVAR acquisitions under NAICS 541519, footnote 18, have a 150-employee size standard <u>and</u> are subject to the NMR. This, however, has caused some confusion, as the NMR has a 500-employee size standard. And, in a recent size appeal, a firm unsuccessfully argued that the size standard for ITVAR procurements should be the 500-employee NMR standard. To clarify this confusion, the Rule amends the NMR to expressly state that a firm may qualify as an SBC to provide manufactured products or other supply items as a nonmanufacturer if, among other things, it does not exceed 500 employees &ldquo;(or 150 employees for the Information Technology Value Added Reseller exception to NAICS Code 541519, which is found at &sect;&thinsp;121.201, footnote 18)&rdquo;.<br /> <br /> <strong>Allowing a Set-Aside Within a Set-Aside<br /> </strong><br /> In what marks a significant change of policy, the Rule provides contracting officers the authority to set aside orders for a socioeconomic small business program (e.g., 8(a), HUBZone, SDVO, WOSB) under a multiple award contract (&ldquo;MAC&rdquo;) awarded as a generic small business set-aside. Notably, although SBA has considered implementing such a rule in the past, it has chosen not to, in part because it was concerned that such a rule would unfairly deprive SBCs of an opportunity to compete for orders issued under their MACs. In the Rule&rsquo;s preamble, SBA explains that other actions it has taken in recent years have alleviated these concerns. However, SBA is requesting comments on whether it would impact the ability of SBCs to compete for and receive orders.<br /> <br /> <strong>Size Recertification<br /> </strong><br /> SBA is also proposing language to clarify that recertification is required on full-and-open contracts when such contracts are awarded to SBCs. In addition, the Rule adds language to SBA&rsquo;s 8(a) regulations to require recertification under 8(a) contracts. Similar language can be found in SBA&rsquo;s SDVO, HUBZone, and WOSB/EDWOSB regulations, but had been missing from its 8(a) regulations.<br /> <br /> Moreover, the Rule provides that, if a prime contractor is relying on a similarly situated subcontractor to meet the applicable performance requirements, the similarly situated subcontractor has to recertify, and the prime cannot count the subcontractor towards its performance requirements if the subcontractor recertifies as an entity other than that which it had previously certified. Interestingly, however, the Rule does not impose recertification requirements on the subcontractor, as the duty to recertify generally applies to prime contractors only. As such, it is unclear how this requirement will be administered.<br /> <br /> <strong>Limitations on Subcontracting<br /> </strong><br /> The Rule proposes a number of revisions pertaining to LOS compliance. First, the Rule clarifies when an independent contractor can be counted as an employee for size and LOS purposes. According to SBA, it would not be equitable to consider an individual an employee for one purpose but not for the other. In this regard, SBA acknowledged that the current LOS regulation has created some confusion as to how to properly treat independent contractors. As it stands, the LOS regulation provides that &ldquo;[w]ork performed by an independent contractor shall be considered a subcontract, and may count toward meeting the applicable LOS where the independent contractor qualifies as a similarly situated entity.&rdquo; However, for size purposes, an individual contractor paid through a 1099 may be properly treated as an employee. As such, in order to clarify its intent, the Rule revises SBA&rsquo;s LOS regulation to provide that (1), where a contract is assigned a NAICS code with an employee-based size standard, an independent contractor <u>may</u> be deemed an employee of the firm under the terms of the Size Policy Statement and (2), where a contract is assigned a NAICS code with a receipts-based size standard, an independent contractor <u>could not</u> be considered an employee but, rather, would always be deemed a subcontractor. Thus, for a contract that is assigned a NAICS code having an employee-based size standard, if an individual were considered an employee for size purposes, he/she would also be considered an employee for LOS purposes.<br /> <br /> SBA is also proposing to add language to the LOS regulation to clarify that contracting officers may request information from contractors regarding LOS compliance and that LOS compliance is not required for every contract. In addition, SBA is requesting comments on whether all small business prime contractors performing set-aside or sole source contracts should be required to demonstrate compliance with the LOS to the contracting officer, and if so, how it should be demonstrated.<br /> <br /> Lastly, in a welcome development, SBA is proposing to create several exclusions from calculating LOS compliance where there are no small business providers, such as spending on media buys, transportation/disposal for environmental remediation firms, and cloud computing. With respect to cloud computing, SBA is asking for comments on whether it should be treated as a supply under the NMR, such that waivers could be obtained. SBA is also requesting comments on whether the foregoing types of costs should be excluded from the calculation for purposes of measuring LOS compliance. Indeed, SBA does not want these exceptions to be abused. For example, it does not want agencies taking small business credit where the principal purpose of the acquisition is to obtain services from an other than SBC&mdash;i.e., a situation where perhaps the contract should not be set aside.<br /> <br /> <strong>Ostensible Subcontractor<br /> </strong><br /> SBA is proposing to amend its regulations to allow an unsuccessful offeror, SBA, or a contracting officer to protest a socioeconomic set-aside or sole source award to a prime contractor that is unduly reliant on a small, but not similarly situated subcontractor (i.e., ostensible subcontractor affiliation). By way of background, the ostensible subcontractor rule applies when a small business is unduly reliant on an other than small subcontractor or when the other than small subcontractor will perform primary and vital parts of the contract. In such cases, assuming that an exception to joint venture affiliation does not apply, SBA will treat the small business prime contractor and its subcontractor as joint venturers and, therefore, affiliates. And, if the &ldquo;joint venture&rdquo; is other than small, the prime contractor is ineligible for award due to this affiliation.<br /> <br /> Yet, under SBA&rsquo;s new joint venture regulations, a joint venture receives an exception from affiliation if both venturers are small under the applicable NAICs code. This means, for example, that if a contract is awarded to an 8(a) set aside, even if there is a concern that the contract will be primarily performed by a non-8(a) small business subcontractor, there is currently no way to protest the awardee on the basis of ostensible subcontractor affiliation because the alleged &ldquo;joint venture&rdquo; awardee is excepted from a finding of affiliation under the new joint venture regulations.<br /> <br /> Accordingly, to address this issue, SBA will now evaluate these contractor relationships under the ostensible subcontractor rule. And, if SBA finds that the subcontractor is an ostensible subcontractor, it will treat the arrangement between the contractors as a joint venture, and it will analyze whether the concern meets the strict requirements of SBA&rsquo;s new joint venture regulations, including those pertaining to the content of joint venture agreements. This is a significant change, as it creates a basis for protest where one did not previously exist.<br /> <br /> <strong>Kit Assemblers<br /> </strong><br /> SBA is also proposing to remove the kit assembler exception to the NMR. Instead, SBA will apply the multiple item rule to kit assembler acquisitions. Under this rule, if the majority of the items in a kit are made by a small business, no waiver of the NMR is required, but if the majority of the items are not made by a small business, a waiver of the NMR must be obtained.<br /> <br /> <strong>Size Determinations<br /> </strong><br /> SBA is also proposing to amend 13 C.F.R. &sect;&thinsp;121.404(a) to make it clear that size is generally determined at the time of initial offer or response including price&mdash;and not when other formal responses are received after the initial offer, such as final proposal revisions. SBA is also proposing to add a paragraph to the foregoing regulation to articulate an exception to this general rule. Namely, when an agency awards a MAC that does not require offers for the contract to include price, size will be determined on the date of initial offer for the contract, which may not include price.<br /> <br /> <strong>Other Changes<br /> </strong><br /> The Rule also addresses a few other topics such as posting notice of substantial bundling, subcontracting compliance reviews, procurement center representative reviews, and set-asides where one offer is received.<br /> <br /> Consistent with the procedures outlined in the Administrative Procedure Act, SBA has invited and will be accepting comments to the Rule, provided they are received on of before February 4, 2019. Instructions on where and how to submit comments can be found <a href="https://www.federalregister.gov/documents/2018/12/04/2018-25705/national-defense-authorization-acts-of-2016-and-2017-recovery-improvements-for-small-entities-after" target="_blank">here</a>.<br /> <br /> If you would like to know more about the Rule and its potential impact on your company or industry, please contact PilieroMazza, and one of our government contracts attorneys will be happy to assist you.<br /> <br /> <span style="font-size: small;"><strong>About the Author:</strong> <em>Sam Finnerty is an associate with PilieroMazza in the Government Contracts Group. He may be reached at </em></span><em><a href="mailto:sfinnerty@pilieromazza.com"><span style="font-size: small;">sfinnerty@pilieromazza.com</span></a></em><span style="font-size: small;"><em>.</em></span>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Limitations on LPTA Coming to DFARShttps://www.pilieromazza.com/?t=40&an=86526&format=xml07 Dec 2018Blog<img src="https://www.pilieromazza.com/7A2372/assets/images/Attorneys/2/150x150/Connor.jpg" hspace="5" vspace="5" align="left" alt="" border="0" width="150" height="150" />On December 4, 2018, DOD issued a <a href="https://www.govinfo.gov/content/pkg/FR-2018-12-04/pdf/2018-26306.pdf" target="_blank">proposed rule</a> amending the DFARS to impose limits on the use of the lowest price technically acceptable (&ldquo;LPTA&rdquo;) source selection process. These changes are driven by the National Defense Authorization Acts (&ldquo;NDAA&rdquo;) for Fiscal Years 2017 and 2018. Notably, the 2018 NDAA directed similar changes to the FAR, but there is no proposed change to the FAR yet.<br /> <br /> DOD proposes adding a new DFARS section, 215.101-2-70, to address the limitations and prohibitions on the use of the LPTA source selection process. The new DFARS section includes the following limitations on the use of LPTA, such that it may only be used when all of the following factors are met:<br /> <br /> <ul> <li>Minimum requirements can be described clearly and comprehensively and expressed in terms of performance objectives, measures, and standards that will be used to determine the acceptability of offers;</li> <li>No, or minimal, value will be realized from a proposal that exceeds the minimum technical or performance requirements;</li> <li>The proposed technical approaches will require no, or minimal, subjective judgment by the source selection authority as to the desirability of one offeror&rsquo;s proposal versus a competing proposal;</li> <li>The source selection authority has a high degree of confidence that reviewing the technical proposals of all offerors would not result in the identification of characteristics that could provide value or benefit;</li> <li>No, or minimal, additional innovation or future technological advantage will be realized by using a different source selection process;</li> <li>Goods to be procured are predominantly expendable in nature, are nontechnical, or have a short life expectancy or short shelf life;</li> <li>The contract file contains a determination that the lowest price reflects full life-cycle costs (as defined at FAR 7.101) of the product(s) or service(s) being acquired; and</li> <li>The contracting officer documents the contract file describing the circumstances justifying the use of the LPTA source selection process.</li> </ul> <br /> Further, the new DFARS section provides that contracting officers shall avoid, to the maximum extent practicable, using LPTA in the case of a procurement that is predominately for the acquisition of:<br /> <br /> <ul> <li> <div>Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, or other knowledge-based professional services;</div> </li> <li> <div>Items designated by the requiring activity as personal protective equipment (except that if the level of quality or failure of the equipment could result in combat casualties, then the requiring activity is prohibited from using LPTA); or</div> </li> <li> <div>Services designated by the requiring activity as knowledge-based training or logistics services in contingency operations or other operations outside the United States, including in Afghanistan or Iraq.</div> </li> </ul> <div style="margin-left: 40px;">&nbsp;</div> <div>Lastly, LPTA will be prohibited in the following circumstances:<br /> &nbsp;</div> <ul> <li>To procure items designated by the requiring activity as personal protective equipment or an aviation critical safety item, when the requiring activity advises the contracting officer that the level of quality or failure of the equipment or item could result in combat casualties;</li> <li>To acquire engineering and manufacturing development for a major defense acquisition program for which budgetary authority is requested beginning in fiscal year 2019; or</li> <li>For an auditing contract (in which case award decisions shall be based on best value factors and criteria).</li> </ul> <br /> Comments to the proposed rule are due February 4, 2019, so contractors should anticipate this change to the DFARS soon thereafter.<br /> <br /> <strong><span style="font-size: small;">About the Author:</span></strong><span style="font-size: small;"> </span><em><span style="font-size: small;">Megan Connor, a partner with PilieroMazza, focuses her practice in the areas of government contracts, Small Business Administration programs, business and corporate law, and litigation. She may be reached at <a href="mailto:mconnor@pilieromazza.com">mconnor@pilieromazza.com</a>.</span></em>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Weekly Report for December 7, 2018https://www.pilieromazza.com/7A2372/assets/files/News/Weekly Report for December 7 2018.pdf07 Dec 2018Weekly Update Newsletter<h3><u><em>RULES AND REGULATIONS</em></u></h3> <h4>Proposed Rules</h4> The Small Business Administration (SBA) published a proposed rule amending its regulations and implementing provisions of the NDAAs of 2016 and 2017 as well as the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act). The proposed rule would (1) clarify that contracting officers have the authority to request information in connection with a contractor's compliance with applicable limitations on subcontracting clauses; (2) provide exclusions for purposes of compliance with the limitations on subcontracting for certain types of contracts (i.e. environmental remediation contracts, information technology service acquisitions that require substantial cloud computing, and contracts performed outside of the United States); (3) require a prime contractor with a commercial subcontracting plan to include indirect costs in its subcontracting goals; (4) establish that failure to provide timely subcontracting reports may constitute a material breach of the contract; (5) clarify the requirements for size and status recertification; and (6) limit the scope of Procurement Center Representative reviews of DoD acquisitions performed outside of the United States and its territories. The proposed rule would also authorize agencies to receive double credit for small business &ldquo;goaling&rdquo; achievements and remove the kit assembler exception to the non-manufacturer rule. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-25705.pdf" target="_blank">83 Fed. Reg. 233, 62516</a>.<br /> <br /> The General Services Administration (GSA), National Aeronautics and Space Administration (NASA), and DoD published a proposed rule amending the Federal Acquisition Regulations (FAR) to implement the final rule published by the SBA implementing section 1651 of the NDAA for fiscal year 2013, which revised and standardized the limitations on subcontracting, including the non-manufacturer rule, that apply to small business concerns under FAR part 19 procurements. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-25506.pdf" target="_blank">83 Fed. Reg. 233, 62540</a>.<br /> <br /> The DoD issued a class deviation implementing revisions made by the SBA to its regulations regarding the limitations on subcontracting. Contracting officers must immediately follow the procedures in the <a href="https://www.acq.osd.mil/dpap/policy/policyvault/USA003103-18-DPC.pdf" target="_blank">class deviation</a> when issuing solicitations and awarding contracts or task or delivery orders to small business concerns, 8(a) Program participants, historically underutilized small business concerns, service-disabled veteran-owned small business concerns, economically-disadvantaged women-owned small business concerns, and women-owned small business concerns. The revisions changed and standardized the limitations on subcontracting and the non-manufacturer rule with which small businesses must comply under government contracts awarded pursuant to the set-aside or sole source authorities of the Small Business Act.<br /> <br /> The DoD published a proposed rule amending the DFARS to implement the NDAAs for fiscal years 2017 and 2018, which establish limitations and prohibitions on the use of the lowest priced technically acceptable source selection process. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-26306.pdf" target="_blank">83 Fed. Reg. 233, 62550</a>.<br /> <br /> The DoD published a proposed rule amending the DFARS to implement a section of the NDAA for fiscal year 2019 regarding set-asides for architect-engineer and construction design contracts. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-26308.pdf" target="_blank">83 Fed. Reg. 233, 62554</a>. <br /> <h4>Final Rules</h4> The Department of Defense (DoD) issued a final rule amending the Defense Federal Acquisition Regulations System (DFARS) to revise a clause to reflect current terminology and industry practices, pursuant to action taken by the DoD Regulatory Reform Task Force. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-26307.pdf" target="_blank">83 Fed. Reg. 233, 62502</a>. <br /> <br /> The DoD issued a final rule amending the DFARS to implement a section of the National Defense Authorization Act (NDAA) for fiscal year 2019 that removes the requirement to make a best procurement approach determination to use an interagency acquisition. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-26309.pdf" target="_blank">83 Fed. Reg. 233, 62501</a>.<br /> <br /> The DoD issued a final rule amending the DFARS to implement a section of the NDAA for fiscal year 2018 that repeals the fiscal year 2015 restrictions on the source of photovoltaic devices in contracts awarded by DoD that result in DoD ownership of photovoltaic devices by means other than DoD purchase of the photovoltaic devices as end products. <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-12-04/pdf/2018-26305.pdf" target="_blank">83 Fed. Reg. 233, 62498</a>.<br /> <h3><u><em>LABOR AND EMPLOYMENT</em></u></h3> In a <a href="https://www.dol.gov/newsroom/releases/ofccp/ofccp20181130" target="_blank">News Release</a>, the U.S. Department of Labor&rsquo;s Office of Federal Contract Compliance Programs (OFCCP) announced three directives establishing (1) an opinion letter process and enhancing OFCCP&rsquo;s Help Desk, (2) a process to resolve compliance evaluations at the earliest stage possible with corporate-wide compliance, and (3) clarifying the Agency&rsquo;s compliance review procedures. More information can be found here. <br /> <br /> According to an article on Bloomberg Government, the EEOC may lose its quorum if the Senate does not end a logjam on nominations for three EEOC seats before the end of the year, which could leave the agency without the authority to green light new policy decisions, handle certain big-ticket lawsuits, and approve significant spending. The EEOC has increased harassment enforcement and training efforts over the past year as well. <br /> <br /> Companies&rsquo; use of mandatory arbitration pacts, particularly for employee claims of harassment and assault, is getting more scrutiny from the Labor Department, according to an article on Bloomberg Government. The article asserts that this issue is also on the nation&rsquo;s radar, particularly in light of the #MeToo movement. Google and Facebook recently announced they would make some mandatory arbitration policies optional for employees making claims of harassment and assault, and Airbnb also ended forced arbitration for employee harassment and workplace discrimination claims.<br /> <br /> Twenty Eight Years after its passage, President George H.W. Bush&rsquo;s Americans with Disabilities Act (ADA) is still developing. According to an article by Robert Iafolla on Bloomberg Government, Congress amended the ADA in 2008 in response to U.S. Supreme Court rulings that had narrowed the definition of &ldquo;disability&rdquo; under the law. Chai Feldblum, a commissioner at the Equal Employment Opportunity Commission commented that, prior to these amendments, cases were often disposed of early in litigation on the question of whether a plaintiff was disabled, and, consequently, the ADA is not as developed as one would expect. The article asserts that unsettled legal issues in the law&mdash;such as long-term leave to accommodate employees with disabilities, competition between disabled and non-disabled candidates, and whether attendance is an essential function of a job&mdash;will ultimately need to be resolved by the U.S. Supreme Court. Until then, the lack of clarity in these areas could land employers in court, which can be costly even if an employer prevails.<br /> <br /> Though companies like Google have stopped requiring arbitration for employee sexual harassment and assault claims, most employee wage-and-hour claims and discrimination claims continue to have arbitration agreements in place. According to an article in Bloomberg, the Economic Policy Institute reported that 56 percent of nonunion private-sector employees are subject to mandatory individual arbitration procedures, roughly 60 million American workers. Of those, 30 percent have signed agreements that include class-action waivers.&nbsp;<br /> <h3><u><em>CAPITOL HILL</em></u></h3> <h4>Congress Passes Small Business Size Standards Legislation, Providing Five Year &ldquo;Runway&rdquo;</h4> <br /> On December 6, 2018, Senator Ben Cardin, the ranking member on the Senate Committee on Small Business &amp; Entrepreneurship, <a href="https://www.sbc.senate.gov/public/index.cfm/pressreleases?ID=DB7A77F4-A383-43E1-9E45-AA3B1D4064FF" target="_blank">announced</a> that the Senate passed legislation amending the Small Business Act to ensure that small business size standards are calculated using average annual receipts from the previous five years; currently, size standards are calculated using average annual receipts from the previous three years. The bill, <a href="https://www.congress.gov/bill/115th-congress/house-bill/6330/text" target="_blank">the Small Business Runway Extension Act of 2018 (HR 6330)</a>, passed in the House of Representatives in September and will now go to President Trump for signature.<br /> <h3><u><em>PILIEROMAZZA BLOGS</em></u></h3> <h4>Limitations on LPTA Coming to DFARS</h4> By Megan C. Connor<br /> <br /> On December 4, 2018, DOD issued a proposed rule amending the DFARS to impose limits on the use of the lowest price technically acceptable (&quot;LPTA&quot;) source selection process. These changes are driven by the National Defense Authorization Acts (&quot;NDAA&quot;) for Fiscal Years 2017 and 2018. Notably, the 2018 NDAA directed similar changes to the FAR, but there is no proposed change to the FAR yet.<br /> [<a href="https://www.pilieromazza.com/?t=40&amp;an=86526&amp;anc=801&amp;format=xml" target="_blank">Read More</a>]<br /> <h4>Congress Passes New Receipts Calculation for Determining the Size of Small Businesses</h4> By Emily Rouleau<br /> <br /> On December 6, 2018, the Senate passed the Small Business Runway Extension Act (HR 6330), which amends the Small Business Act by changing the time period for determining a company's size based on average annual receipts. Initially, the Small Business Act required size standards to be prescribed on the basis of a company's average annual receipts from the previous three years; the Small Business Runway Extension Act extends this time to the previous five years. The House passed the bill on September 25, 2018, and the legislation will now go to President Trump for his signature.<br /> [<a href="https://www.pilieromazza.com/?t=40&amp;an=86535&amp;anc=801&amp;format=xml" target="_blank">Read More</a>]<br /> <br /> <h4>Title VII's Protections Don't Extend That Far&mdash;4th Circuit Says Review and Copying of Confidential Files Not Protected Activity</h4> By Paul W. Mengel III<br /> <br /> Catherine Netter, a 19-year employee of the Guilford County, N.C., Sheriff's Office, believed a disciplinary sanction she received in 2014, which impeded her ability to be promoted, was motivated by discrimination. Netter, who is African-American and Muslim, felt that other similarly situated officers who were neither African-American nor Muslim had not been disciplined in a similar manner, so she filed complaints with the Equal Opportunity Employment Commission (&quot;EEOC&quot;) and the Guilford County Human Resources Department.<br /> [<a href="https://www.pilieromazza.com/?t=40&amp;an=86453&amp;anc=801&amp;format=xml" target="_blank">Read More</a>]<br /> <br /> <br type="_moz" />https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Megan Connor06 Dec 2018Featured Attorneyhttps://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10PilieroMazza and M&T Bank Present a New and Growing Company Seminar Serieshttps://www.pilieromazza.com/?t=40&an=80855&format=xml04 Dec 2018Events<h3 style="text-align: center;"><span style="color: rgb(0, 0, 0);">PilieroMazza and M&amp;T Bank Present a New and Growing Company Seminar Series!</span></h3> <h3 style="text-align: center;"><span style="color: rgb(0, 0, 0);"><br /> </span>&nbsp;<span style="color: rgb(0, 102, 204);">Part Two: Red Pill or Blue Pill - How to Finance Your New or Growing Company</span></h3> In this second session of the two part series for new and emerging businesses, join advisors from PilieroMazza and M&amp;T Bank as they discuss the ins and outs of 7(a) loans, non-traditional financing opportunities, and what it takes to get traditional financing in today&rsquo;s market, including the best ways to present a loan package for financing and what banks are looking for. They will also explore what preparations should be made when seeking financing, what terms to expect, and what protections private investors may seek.<br /> <br /> <strong>Details</strong><br /> <br /> <strong>Date:</strong> Tuesday, December 4, 2018<br /> <strong>Time:</strong> 1:00-3:00 PM EST<br /> <strong>Location:</strong> 1350 I Street NW, Suite 500, Washington, DC 20005<br /> <strong>Cost:</strong> Free<br /> <br /> <a href="https://www.eventbrite.com/e/new-and-growing-company-series-tickets-51218961292" target="_blank"><img src="https://www.pilieromazza.com/7A2372/assets/images/RegisterHere.jpg" hspace="0" vspace="0" align="absmiddle" alt="" border="0" width="146" height="41" /></a><br /> <br /> <h3>Part One: So You Are New, But You Weren't Born Yesterday was held on November 6, 2018</h3> <p>&nbsp;</p> <br /> <br type="_moz" />https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10Title VII's Protections Don't Extend That Far—4th Circuit Says Review and Copying of Confidential Files Not Protected Activityhttps://www.pilieromazza.com/?t=40&an=86453&format=xml04 Dec 2018Blog<img src="https://www.pilieromazza.com/7A2372/assets/images/Attorneys/2/150x150/Mengel_1.jpg" hspace="5" vspace="5" align="left" alt="" border="0" width="150" height="150" />Catherine Netter, a 19-year employee of the Guilford County, N.C., Sheriff&rsquo;s Office, believed a disciplinary sanction she received in 2014, which impeded her ability to be promoted, was motivated by discrimination. Netter, who is African-American and Muslim, felt that other similarly situated officers who were neither African-American nor Muslim had not been disciplined in a similar manner, so she filed complaints with the Equal Opportunity Employment Commission (&ldquo;EEOC&rdquo;) and the Guilford County Human Resources Department.<br /> <br /> So far, so good. But, in response to an investigator&rsquo;s inquiry about any evidence she might have in support of her claims, Netter made a fateful misstep: without seeking authorization to do so, she copied some confidential personnel files of two of her subordinates to which she had access and requested and obtained three other confidential personnel files from a co-worker in another office. These files were provided to the investigator and, once her EEOC claim was denied and she filed suit in U. S. District Court against the Guilford County Sheriff&rsquo;s Office and Sheriff BJ Barnes, they were also provided to her attorney. The files eventually found their way to Barnes&rsquo; counsel through discovery, and Netter acknowledged in her deposition that she copied the confidential files without permission. The copying of the files not only violated Sheriff&rsquo;s office policy, but constituted a class-3 misdemeanor under state law, and Barnes fired Netter as a result.<br /> <br /> After being fired, Netter amended her lawsuit to add a claim of retaliation under Title VII of the Civil Rights Act of 1964 (the &ldquo;Act&rdquo;). Section 704(a) of the Act prohibits an employer from retaliating against an employee because she &ldquo;has opposed any practice made an unlawful employment practice by this subchapter,&rdquo; or because she &ldquo;has made a charge, testified, assisted or participated in any manner in an investigation, proceeding, or hearing under this subchapter.&rdquo; Thus, two types of activity are protected under &sect; 704(a): <em>participation</em> in investigations and proceedings and <em>opposition</em> to unlawful employment practices. Netter advanced both arguments at the District Court level, that is, that her conduct constituted protected participation activity under the antiretaliation provisions of the Act and that her review and disclosure of the confidential files constituted protected opposition activity. She lost both arguments at summary judgment and, after her case was dismissed, appealed to the 4th Circuit.<br /> <br /> In <em>Netter v. Sheriff BJ Barnes and Guilford County Sheriff's Office</em>, No. 18-1039 (4th Cir., Nov. 15, 2018), the 4th Circuit agreed with the trial court and affirmed the lower court&rsquo;s judgment. In disposing of Netter&rsquo;s &ldquo;opposition&rdquo; argument, it echoed the ruling in <em>Laughlin v. Metro. Wash. Airports Auth.</em>, 149 F.3d 253 (4th Cir. 1998), which noted that, under the opposition clause, unauthorized disclosure of confidential information to third parties is generally unreasonable, as the employer&rsquo;s substantial and legitimate interest in maintaining their confidentiality trumps the employee&rsquo;s interest in their use to advance a discrimination case. The Court noted it was &ldquo;loath to provide employees an incentive to rifle through confidential files looking for evidence.&rdquo;<br /> <br /> With regard to Netter&rsquo;s &ldquo;participation&rdquo; argument, the Court observed that the participation clause affords more substantial protections for conduct than does the opposition clause, and it expressed a reluctance to &ldquo;read the participation clause so narrowly as to improperly limit an employee&rsquo;s ability to gather evidence for a bona fide Title VII claim.&rdquo; Nevertheless, it concluded that Netter&rsquo;s unauthorized inspection of the confidential files did not constitute protected participation activity because in so doing she &ldquo;violated a valid, generally-applicable state law.&rdquo; The Court noted that, if the state law at issue contradicted Title VII&rsquo;s provisions or impeded a litigant&rsquo;s ability to pursue a claim under the Act, then Netter&rsquo;s actions in violating it might have been protected under the Supremacy Clause&mdash;such was not the case here. The Court found that Netter could not, under these circumstances, satisfy the &ldquo;but-for&rdquo; causation requirement for participation claims; that is, she could not establish that the unlawful retaliation would not have occurred in the absence of the alleged wrongful action of the employer because Barnes based Netter&rsquo;s termination on her violation of a legitimate state law. In sum, because &sect; 704(a) of the Act does not protect a violation of a valid state law, Netter could not meet her burden of proving she was terminated because she engaged in protected activity.<br /> <br /> <span style="font-size: small;"><strong>About the Author:</strong> <em>Paul Mengel is counsel and heads the Litigation Group. He may be reached at </em></span><a href="mailto:pmengel@pilieromazza.com"><span style="font-size: small;"><em>pmengel@pilieromazza.com</em></span></a><span style="font-size: small;"><em>.</em></span>https://www.pilieromazza.com/?t=39&format=xml&directive=0&stylesheet=rss&records=10