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This is the last issue of PilieroMazza’s Weekly Update for 2020. We will resume the publication in the second week of January 2021. Please visit this link to view a holiday message from us to you.
Key Provisions in the 2021 NDAA for Government Contractors, December 11, 2020, Jon Williams
‘Tis the season for holiday cheer and the National Defense Authorization Act (NDAA). The NDAA, commonly referred to as “must pass” legislation, is a key legislative vehicle that Congress uses each year to address a wide variety of issues, from defense spending to small business contracting matters. And this year is no different. Based on the recent Conference Report, the 2021 NDAA heading to the President will contain numerous provisions that will impact contractors doing business with the federal government. There is still some intrigue as to whether the President will sign the bill or if there may be further changes, which we will continue to monitor. While we continue to monitor those developments, this blog highlights several key provisions in the current version of the 2021 NDAA that are likely to impact government contractors and small businesses in 2021 and beyond. Read more here.
Unsure Whether You’ll Lose Tax Deductions for a Forgiven PPP Loan? Wait Until 2021 to File for Forgiveness, December 9, 2020, Cy Alba, Nichole Atallah, Kathryn Hickey, Matt Feinberg
As it hashes out the details of the next COVID-19 relief package, Congress is facing pressure from business groups to allow businesses to write off expenses covered by forgiven Paycheck Protection Program (PPP) loans. The groups explain that, without write offs, “millions of small businesses . . . will face a surprising, and, in many cases, insurmountable tax bill next year.” We have received questions about the quagmire of regulations covering tax treatment for businesses when PPP loan balances are forgiven. Our advice? If you have not filed a forgiveness application, consider waiting until next year. Read more here.
GAO Clarifies Scope of Its Task Order Protest Jurisdiction, December 9, 2020, Sam Finnerty
On November 17, 2020, the Government Accountability Office (GAO) dismissed the post-award task order protest of U.S. Information Technologies Corporation (USIT) for lack of jurisdiction.1 Task order protests related to Department of Defense (DoD) procurements can only be filed with GAO if (1) the order at issue increases the scope, period, or maximum value of the contract under which it is issued or, as it relates to the subject case, (2) the order is valued in excess of $25 million (for civilian agencies, the threshold, with certain exceptions, is $10 million). In USIT, the Defense Logistics Agency (DLA) awarded a task order valued at $24,993,820 for the base period and all option periods. In an attempt to establish jurisdiction, USIT argued that the true value of the order at issue was higher than $25 million. In its decision, GAO clarified the scope of its task order protest jurisdiction and identified a number of arguments that cannot be used to circumvent the rule. Read more here.
PSC Publishes 2020 Acquisition Policy Survey
The Professional Services Council published its 2020 Acquisition Policy Survey. The survey covers trends and policies in government contracting. Read more here.
SBA Export Loans Help Bring Jobs Back Home
The Small Business Administration (SBA) reported that a growing number of businesses are bringing production and jobs back to the U.S. from overseas. SBA export loans are being used to help finance this “reshoring.” The demand for “Made in America” goods and services is increasing worldwide, and U.S. businesses are becoming conscious of the value of compact, efficient supply chains and locally controlled operations. Read more here.
Defense Department Wants to Expand Acquisition Framework
National Defense Magazine reported that the Department of Defense (DOD) is continuing to roll out new policies to streamline acquisition processes. During 2020, the DOD pushed to branch out from the standard acquisition lifecycle and implement different pathways for acquiring products such as software. Ellen Lord, Undersecretary of Defense for Acquisition and Sustainment, commented that the DoD has been doing so by expanding its adaptive acquisition framework, which has six different options for obtaining new products. Read more here.
DOD Issued Guidance Related to Recording Transactions Involving NIA Codes and Emergency Acquisition Authorities
The Department of Defense (DOD) published a memorandum directing Heads of Contracting Activities to issue component-level Government-wide Commercial Purchase Card guidance for recording information when National Interest Action (NIA) Codes are issued for contingency operations, declared emergency or major disasters, defense or recovery from certain events, humanitarian or peacekeeping operations, or international disaster assistance. Read more here.
DOD Published Version 2.2 of the Product Service Code
The Department of Defense (DOD) published a memorandum announcing the publication of version 2.2 of the Product Service Code to the Office of Management and Budget Object Class Code crosswalk. The crosswalk improves alignment between execution and budget data by allowing visibility into the relationship between acquisition and financial commitments, obligations, and expenditures. Read more here.
GSA Updates IT Product Service Codes
The General Services Administration (GSA) announced the release of an updated Product Service Code Manual. The manual includes 40 new codes for Information Technology (IT) and utilizes a new structure which provides data on technologies like cloud-based services. Read more here.
GAO Identifies Areas of Improvement for Category Management
The Government Accountability Office (GAO) published a report examining the Office of Management and Budget’s (OMB) Category Management initiative. The initiative aims to create savings by improving how agencies buy commonly purchased products and services. The report analyzes the extent to which OMB has focused on agencies’ requirements definition, the extent to which agencies face challenges analyzing data, and the extent to which agencies purchased common products and services from small businesses through Category Management. GAO found that OMB has primarily focused on the contracting aspects of category management in its guidance, placing less emphasis on how agencies define requirements, which could result in billions of more dollars being saved. Agencies reported that data challenges–including issues collecting, analyzing, and sharing data on their spending and prices paid—have affected their category management implementation. GAO suggested that OMB take a leadership role in addressing government-wide data challenges. Read more here.
DISA Publishes Three-Year Strategic Plan
Federal Computer Week reported that the Defense Information Systems Agency (DISA) refreshed its three-year strategic plan, which emphasizes cyber defense, the role of cloud, and enterprise services. The strategic plan, which was released on November 30, is designed to provide a framework for how DISA will acquire products and services in the coming years.
CBO Cost Estimate for the 2021 National Defense Authorization Act
The Congressional Budget Office released their cost estimate for the 2021 National Defense Authorization Act. Read more here.
Upcoming Government Contracts Presentations
Hiring? Recent Amendments to Equal Pay for Equal Work Act Impose New Limits on Employers, December 7, 2020, Matt Feinberg
Almost thirty years ago, Maryland’s General Assembly passed the Equal Pay for Equal Work Act (Act), imposing an obligation on Maryland employers to pay employees equal amounts for the same work, regardless of the employee’s sex. Effective October 1, 2020, the General Assembly amended the Act, imposing new restrictions on employers both during and after the hiring process. Companies employing workers in Maryland should review and adjust their interviewing and hiring policies to comply with the new law and avoid potential regulatory penalties and costly litigation. Read more here.
DOL Publishes Rule to Implement Legal Requirements for Religious Exemption
The Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) released its “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption” Final Rule. The rule is meant to encourage the full and equal participation of religious organizations as federal contractors. Religious organizations, many of which are small nonprofits, provide essential services as feeding the hungry, supporting refugees, and educating our nation’s students. Read more here.
GAO Reports that Service Worker Wage Protection Needs to Improve
The Government Accountability Office (GAO) released a report analyzing enforcement of the Service Contract Act (SCA). The report found that after 5,000 compliance investigations over five years, from 2014 through 2019, there was a SCA violation in 68 percent of cases. Of the 5,000 cases, there were sixty cases that resulted in debarment. As a result of these findings, there was about $224 million paid in back wages. The Department of Labor (DOL) has encountered difficulties enforcing the SCA, including difficulty communicating with contracting agencies. GAO completed this review to examine (1) what available data reveals about past SCA cases, (2) what challenges DOL reports facing in enforcing the SCA, and (3) how contracting agencies implement the SCA. Read more here.
DOL Issues Two Wage and Hour Opinion Letters
The Department of Labor (DOL) announced two opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA).
- FLSA2020-17: Addresses whether the regular rate of pay of an employee who is paid on a piece-rate basis may be calculated by dividing total earnings by the number of productive and nonproductive hours worked during the workweek in the absence of a specific agreement with the employee to use such calculation.
- FLSA2020-18: Addresses whether insect farming qualifies as “agriculture” under Section 3(f) of the FLSA and whether certain workers employed by an insect farming operation may be exempt from overtime pay requirements under Section 13(b)(12).
Read more here.
Class Deviation: Implementation of Requirements in Executive Order 13950, Combatting Race and Sex Stereotyping
The Department of Energy published a class deviation to the FAR to implement requirements contained in Executive Order 13950, Combatting Race and Sex Stereotyping. Read more here.
DOL Issues Final Rule on Proxy Voting and Shareholder Rights by Employee Benefit Plans
The Department of Labor announced a final rule establishing a regulatory framework for private employee benefit plans’ fiduciaries to follow when they exercise shareholder rights, including proxy voting, and select and monitor proxy advisory firms. Read more here.