5 Key Ways a Contractor Can Be Subject to a Government Claim
The performance of any government contract by a contractor has the potential to bring certain monetary risks of a government claim against the contractor. Below, we discuss 5 key ways a government contractor can be subject to a government claim and best practices to reduce your risks. 1. Overpayment A common type of government claim is based upon what the government considers to be an overpayment on its part. For example, an agency might have paid an invoice where the . . . Read More
Small Business Set Asides Now Allowed Outside the U.S.: What You Need to Know
Effective May 26, 2022, the Federal Acquisition Regulation (FAR) gives contracting officers the discretion to apply the Small Business Act (Act)—implemented by FAR Part 19—outside the United States and its outlying areas. This final rule (Rule) could create significant business opportunities for small business government contractors capable of competing for overseas procurements. By way of background, the Small Business Administration (SBA) has consistently taken the position that the Act is not geographically limited and, as a result, FAR Part 19, should . . . Read More
New Virginia Law Prohibits “Pay-When-Paid” and “Pay-If-Paid” Provisions in Construction Contracts
Construction contracts routinely set payment terms as “pay-when-paid” or “pay-if-paid.” These terms protect the prime contractor from bearing all the risk of nonpayment by the owner. In Virginia, however, that will not be true for much longer. Last month, Virginia lawmakers passed Senate Bill 550, which makes “pay-when-paid” and “pay-if-paid” clauses unenforceable in most circumstances. Specifically, the new law applies to both public construction contracts and certain private construction contracts that involve at least one general contractor and one subcontractor. . . . Read More
DOD Issues Guidance on Effect of Inflation on Government Contractors
On May 25, 2022, the Department of Defense (DOD) issued Guidance on Inflation and Economic Price Adjustment (Guidance Memorandum). It was long overdue. Inflation is steadily rising and, as a result, contractors with fixed-price contracts are forced to shoulder skyrocketing supply costs since fixed-price contractors bear the risk of increased costs. As these cost increases erode profit margins and continue to drive contracts into loss positions, contractors are seeking some type of relief. PilieroMazza recently hosted a webinar, Supply Chain Pain: How Contractors Can Get Relief from a Supply Chain-Related Claim , detailing relief options and best practices when a . . . Read More
USDA Proposes Resuscitating Rule to Blacklist Government Contractors for Labor Law Violations
On February 17, 2022, the United States Department of Agriculture (USDA) proposed a rule to update its Agriculture Acquisition Regulation (AGAR), which has not had a major revision since 1996. One component of the proposed rule requires USDA contractors to maintain compliance with a broad range of labor and employment laws and regulations in order to do business with the USDA. These requirements are strikingly similar to the Obama-era Fair Pay and Safe Workplaces Executive Order (nicknamed “the blacklist rule”). Contractors . . . Read More
DOL Updates Language on Service Contract Act Wage Determinations AGAIN!
An executive order increasing the minimum wage for non-exempt employees working on specified types of federal contracts took effect January 30, 2022. However, recent wage determinations issued by the Department of Labor (DOL) fail to appreciate that contracting officers are supposed to modify contracts to include the applicable Federal Acquisition Regulation (FAR) before the new minimum wage provisions are effective. Raising wages prior to proper incorporation of the applicable FAR provision risks a government contractor’s eligibility for a contract price . . . Read More
OFCCP’s Growing Activism Portends Stricter Enforcement
The Department of Labor (DOL) Office of Federal Contract Compliance Programs (OFCCP) has taken several actions during the past six months that signal it will adopt a more forceful posture in ensuring that federal contractors meet their affirmative action and non-discrimination obligations toward their workforce. To prepare themselves for heightened scrutiny and tighter deadlines, government contractors should take steps now to set up their records for quick retrieval during OFCCP audits and rectify any unjustified pay disparities among their employees. . . . Read More
Fraud Allegations Could Bedevil Borrowers in SBA COVID-19 Relief Programs for Many Years
As everyone who has been tracking the COVID-19 relief programs since 2020 knows, at the outset there was massive confusion about the programs’ requirements as well as fear that funding could run out before businesses with uncertain futures could secure assistance. Now, two years later, we have heard from numerous clients who have received notice that the Small Business Administration (SBA) intends to audit the Paycheck Protection Program (PPP) Loan or Economic Injury Disaster Loan (EIDL) applications, and even of . . . Read More
GSA Seeks Feedback on Potential Changes to Polaris Joint Ventures
On May 13, 2022, the General Services Administration (GSA) published draft proposed changes to the Polaris Government-Wide Acquisition Contract (GWAC). Specifically, the agency is proposing to revise Section L.5.1.3.1 of the request for proposals (RFP), dealing with joint ventures, after reviewing industry feedback and engaging with the Small Business Administration (SBA). GSA emphasized that the language is in draft form and is subject to change. Most importantly, members of the small business information technology community are encouraged to provide feedback to Polaris@gsa.gov by . . . Read More
Federal Circuit Clarifies the Scope of Incorporation by Reference
A recent Federal Circuit decision supplies helpful direction to contractors wishing to incorporate their standard commercial terms and conditions into their government contracts. The federal government often claims that it wants to make its contracting process more like the commercial marketplace, but the government does not make it easy for commercial companies to do business with it. CSI Aviation, Inc. v. Dep’t of Homeland Security highlights the potential confusion surrounding the terms and conditions governing government contracts for commercial products or services. There, the contractor succeeded after several . . . Read More