PilieroMazza’s Weekly Update is an e-mail sent on Fridays that recaps legislative and regulatory issues affecting businesses of all sizes. When government agencies propose significant changes to existing regulations or Congress passes legislation of special interest to the small business community, we follow-up the Weekly Update with an analysis of the proposed change and the likely impact on small business.

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Weekly Update for Government Contractors and Commercial Businesses - May 29, 2020

If you have questions concerning the content below, please visit this link.

COVID-19 Client Resource Center: To access resources for businesses navigating the COVID-19 crisis, we invite you to visit PilieroMazza’s “COVID-19 Client Resource Center.” Please contact covid19@pilieromazza.com for immediate assistance.

LABOR & EMPLOYMENT LAW

Creating a New Normal: 5 Steps for Employers Preparing a Returning Workforce in a COVID-19 Environment, May 21, 2020, Sara Nasseri
As government authorities slowly begin the reopening process, employers are now preparing to reopen facilities and return employees to their worksites. Undoubtedly, with the COVID-19 pandemic still ongoing, a return to work certainly will not mean a return to how things used to be, and employers will need to implement new processes and procedures to adequately prepare employees and comply with state and local requirements. This brief guide outlines various considerations employers will have to make to gradually and safely bring their workforce back and create a new normal. [Read More]

EEOC Delays Collection of EEO-1 Data Due to COVID-19, May 11, 2020, Sara Nasseri
In light of the public health emergency caused by COVID-19, the Equal Employment Opportunity Commission (EEOC) announced that it will delay collection of EEO-1 Component 1 data until March 2021. Under federal law, businesses with at least 100 employees and federal contractors with at least 50 employees and a federal contract of $50,000 or more generally must file an EEO-1 form each year. This development gives government contractors a one-year extension to file their 2019 Component 1 data. [Read More]

CDC Business Guidelines Released
The Washington Post reported that the Centers for Disease Control and Prevention (CDC) laid out its road map for reopening schools, child-care facilities, restaurants, and mass transit. The CDC cautioned that some institutions should stay closed for now and said reopening should be guided by coronavirus transmission rates. Read more from the Washington Post here. The CDC’s full guidelines are available here.

State-by-State Business Reopening Guidance
To help track reopening differences across each state and provide the latest guidance and information to employers, the U.S. Chamber of Commerce launched an interactive map with guides for each state. It provides the latest guidelines, timelines, and critical information for businesses aiming to restart safely and sustainably amid the pandemic. The map can be accessed here. It is part of the Chamber’s new digital resources center, which provides tools and guidance to help employers reopen their businesses safely and sustainably. The U.S. Chamber resource center is available here.

New Form I-9 Mandatory and Use of Expired Documents
The Howard County Chamber of Commerce reported that, effective May 1, 2020, employers are required to use a revised Form I-9 and complete an employee’s Form I-9 within three days of their first day of work. The Department of Homeland Security has also issued a temporary policy to allow employers to accept expired List B documents when completing the Form I-9. This policy is intended to account for the fact that many people are unable to renew their driver’s licenses or state ID cards at this time due to stay-at-home orders. Helpful FAQ on temporary I-9 policies are available here from the U.S. Citizenship and Immigration Services.

Upcoming Labor & Employment Law Presentations

WEBINAR: Return to Work Plan: Not Business as Usual, June 2, 2020, Nichole Atallah and Sarah Nash. [Read More]

WEBINAR: Nuts and Bolts of SCA, July 14, 2020, Nichole Atallah. [Read More]

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

House Passes $3 Trillion HEROES Act
On May 15, 2020, the House of Representatives passed a new stimulus bill called the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The Professional Services Council (PSC) applauded the inclusion of a contractor-focused title in the legislation designed to help the economy in response to the coronavirus pandemic.

Specifically, PSC applauded provisions that would:

  • require that federal agencies allow contractor personnel to telework to the maximum extent practical during the coronavirus emergency;
  • support the economy for companies of all sizes by requiring paying prime contractors within 15 days of the submission of a valid invoice;
  • require government-wide, uniform guidance to clarify the coverage provided under Section 3610 of the CARES Act; and
  • ensure that contractors are not penalized by adverse performance ratings due to contract disruptions caused by the coronavirus emergency.

Small business provision summaries for the bill can be found here and here. The full text is available here, and a fact sheet on the bill is available here. Additional information on the bill is available here from PSC.

DOD Issues New CARES Act, Section 3610 Guidance, May 19, 2020, Cy Alba
Guidance from the Department of Defense (DOD) has finally been issued related to Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which allowed for payments to federal contractors to keep non-working employees at the ready to return to work when required to do so. The CARES Act allows contracting officers to pay contractors at the “minimum applicable billing rates” for any employees who cannot perform work at a government site or government-approved contractor site due to a shutdown of said site because of COVID-19. That is a statutory allowance and, as such, cannot be changed by any agency action. However, there has been confusion about specific terms in the statute and conflicting guidance coming out of various agencies. While this new guidance does not clear up the inconsistencies, it does help clarify how DOD is going to treat contractor requests for 3610 funding.[Read More]

SBA Implements WOSB / EDWOSB Certification Requirement and Revises Economic Disadvantage Criteria for 8(a) Eligibility, Including Treatment of Retirement Accounts, May 13, 2020, Meghan Leemon
Just under one year ago, we wrote about the Small Business Administration’s (SBA) proposed rule regarding implementing a certification requirement for Women-Owned Small Businesses (WOSBs) / Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) and revised economic disadvantage criteria for 8(a) eligibility. SBA’s final rule was recently published, implementing just that. The rule will impact businesses seeking to compete for government contracts under the WOSB and 8(a) Business Development programs. [Read More]

DOC Class Deviation: Accelerated Payments to Small Business Contractors and Subcontractors
Barry Berkowitz, Senior Procurement Executive and Director for Acquisition Management at the Department of Commerce (DOC), issued a class deviation to the FAR. The class deviation was issued to provide for accelerated payments to contractors that are small businesses and to small-business subcontractors by accelerating payments to their prime contractors. The class deviation is applicable to (1) all solicitations and contracts awarded on or after the issuance date of the class deviation and (2) contracts awarded prior to the issuance date of the class deviation, if new orders are placed against them. The deviation is effective immediately and remains in effect until rescinded or incorporated into the FAR. Read the full class deviation here.

GSA COVID-19 Industry Training Resource Slides
The National 8(a) Association reported that the General Services Administration (GSA) Office of the Procurement Ombudsman recently disseminated GSA COVID-19 Industry Training resource slides to major industry associations to highlight and consolidate the vast amount of coronavirus-related information and documentation available on Acquisition.Gov. The slides are accessible here.

Paycheck Protection Program Updates

SBA Issues Long-Awaited PPP Loan Forgiveness Application, May 18, 2020, Cy Alba and Kathryn Hickey
SBA recently issued its Paycheck Protection Program (PPP) Loan Forgiveness Application. The application walks borrowers through a step-by-step process to determine loan forgiveness amounts based upon the information the borrower enters. [Read More]

SBA and Treasury Issue New Guidance Concerning Good-Faith Certification on the Necessity of Their Loan Request, May 13, 2020, Jon Williams, Cy Alba, and Kathryn L. Hickey
On May 13, 2020, SBA and the Treasury Department (Treasury) released new guidance concerning good-faith certification for PPP loan requests. This new guidance clarifies that businesses seeking a PPP loan of less than $2 million will have made their request in good faith unless proven otherwise. [Read More]

House Introduces Legislation to Modify Existing PPP Regulations, May 12, 2020, Cy Alba
On May 11, 2020, Congressmen Chip Roy and Dean Phillips introduced the Paycheck Protection Flexibility Act, new legislation meant to provide additional assistance to businesses impacted the coronavirus pandemic. This bill would make major adjustments to the current PPP should it become law. [Read More]

House Introduces New Legislation Allowing Startups to Access PPP Funding, May 12, 2020, Cy Alba
On May 8, 2020, Congresswomen Anna Enshoo and Cathy McMorris introduced the Caring for Startup Employees Act of 2020, a bipartisan piece of legislation aimed at granting more economic assistance to startup companies through the PPP. Should this bill become law, it would dramatically increase the number of companies eligible for PPP loans. [Read More]

U.S. Firms Canceled at Least $18 Billion in Small-Business Loans
Bloomberg News reports that U.S. companies have canceled at least $18 billion in loans from the PPP. This number is much larger than figures previously disclosed by publicly traded companies that gave back millions of dollars after there was public backlash following reports that large companies received millions of dollars in PPP loans at the expense of small businesses. Cancellations include returned funds, duplicative loans, and loans not closed for any reason. Read more here.

Implementation of the PPP Requirements
The SBA Office of Inspector General (OIG) released a flash report titled “Small Business Administration’s Implementation of the PPP Requirements.” The OIG analyzed key provisions of Section 1102 of the CARES Act, SBA’s related interim final rules, and public guidance intended to further inform stakeholders of SBA’s implementation of the PPP. The OIG found that SBA’s interim final rules and FAQs mostly aligned with the Act. The OIG identified the following areas, however, that did not fully align with the Act’s provisions:

  • Prioritizing Underserved and Rural Markets
  • Loan Proceeds Eligible for Forgiveness
  • Guidance on Loan Deferments
  • Registration of Loans

Read the full report here.

New Report Says Much of Bailout Stimulus Money Remains Unspent
The COVID-19 Congressional Oversight Commission (COC) released a report finding that the Treasury had spent very little from a $500 billion fund created by the CARES Act to help businesses and local governments, even though many of these entities have asked for immediate help. Read coverage from the Washington Post here. The COC’s report is available here.

No Deduction Allowed for Business Expenses Paid with Forgiven PPP Loans
The Congressional Research Service (CRS) released a report titled “IRS Guidance Says No Deduction Is Allowed for Business Expenses Paid with Forgiven PPP Loans.” On April 30, 2020, the Internal Revenue Service (IRS) issued Notice 2020-32, which clarifies the IRS’s position that PPP loan recipients cannot claim a deduction for expenses funded from the forgiven PPP loans. IRS’s guidance could reduce the perceived economic benefit of PPP loans and require some taxpayers to alter how they compute their taxes for 2020 compared to previous years. With this said, many businesses could still find that the economic benefits of PPP loans outweigh the potential costs. Read the full CRS report here.

New PPP-Related Interim Final Rules
SBA issued several interim final rules that supplement previously posted PPP-related interim final rules with additional guidance.

1. Loan Increases, Disbursements, and 1502 Reporting

Effective since May 19, 2020, this rule answers the questions:

  • If a partnership received a PPP loan that did not include any compensation for its partners, can the loan amount be increased to include partner compensation?
  • If a seasonal employer received a PPP loan before the alternative criterion for determining the maximum loan amount for seasonal employers became available, can the loan amount be increased based on a revised calculation using the alternative criterion?
  • If a borrower's PPP loan has already been fully disbursed, can the lender make an additional disbursement for the increased loan proceeds?
  • How do lenders report disbursements on PPP loans that are increased, and does the increase in the loan delay the timeframe to report the loan on the SBA Form 1502?

Read the published version here.

2. Eligibility of Certain Electric Cooperatives

Effective since May 19, 2020, this rule answers the question:

  • Are electric cooperatives that are exempt from federal income taxation under section 501(c)(12) of the Internal Revenue Code eligible for a PPP loan?

Read the published version here.

3. Treatment of Entities With Foreign Affiliates

Effective since May 21, 2020, this rule answers the question:

  • Are employees of foreign affiliates included for purposes of determining whether a PPP borrower has more than 500 employees?

Read the published version here.

Upcoming Small Business Programs & Advisory Services Presentations

WEBINAR: Understanding and Avoiding Affiliation Under Small Business Contracting Programs, June 3, 2020, Jason Blindauer. [Read More]

WEBINAR: Past Performance: How to Use Yours, Benefit from Others’, and Defend It from Attacks, June 8, 2020, Sam Finnerty. [Read More]

WEBINAR: PPP Forgiveness—Is it Forgivable?, June 9, 2020, Cy Alba. [Read More]

LITIGATION & DISPUTE RESOLUTION

Social Engineering Fraud: 4 Steps Every Company Needs to Take Right Now, May 13, 2020, Matt Feinberg
Social engineering fraud is affecting companies of all sizes, both domestic and international, across all industries. Although social engineering fraud has been around for years—consider all the unsolicited emails you have received from so-called Nigerian princes—in 2020, we are seeing a huge rise in the number of social engineering fraud attacks perpetrated against government contractors. Even more concerning, the thieves are becoming bolder and more brazen, defrauding unsuspecting companies of hundreds of thousands of dollars or more. By the time the company realizes it is a victim of fraud and contacts the bank, the money has been withdrawn. All companies (particularly government contractors) must take immediate action to protect themselves from social engineering attacks that could result in losses in the hundreds of thousands or even millions of dollars. [Read More]

CYBERSECURITY & DATA PRIVACY

New CMMC Rules for Defense Contractors to Come in November
National Defense magazine reports that defense contractors should expect to see new Cybersecurity Maturity Model Certification (CMMC) version 1.0 requirements in requests for proposals released in November. The requirements are a reflection of the Pentagon's push to protect defense industrial base networks and controlled unclassified information from cyber attacks. The CMMC rules will require contractors to be certified by third-party auditors, which will ensure that companies are adhering to certain standards. Organizations will be required to meet different levels of security, with level one being the lowest and level five the most stringent. Read more here.

GOVERNMENT CONTRACTS LAW

JEDI Update: AWS Files Agency-Level Protest with Pentagon, May 12, 2020, Lauren Brier
The ongoing public feud between Microsoft and Amazon Web Services (AWS) over DOD’s Joint Enterprise Defense Infrastructure (JEDI) Cloud contract saw three major developments over the last thirty (30) days. This blog provides an update on the JEDI protest, which has potential implications for the government contracting community. [Read More]

Upcoming Government Contracts Law Presentations

WEBINAR: PCI Subcontracting Summit 2020: Subcontracting Plans, May 26, 2020, Cy Alba. [Read More]

Read More...

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Weekly Update for Government Contractors and Commercial Businesses - May 15, 2020

If you have questions concerning the content below, please visit this link.

COVID-19 Client Resource Center: To access resources for businesses navigating the COVID-19 crisis, we invite you to visit PilieroMazza’s “COVID-19 Client Resource Center.” Please contact covid19@pilieromazza.com for immediate assistance.

CLIENT ALERT: SBA, Treasury Issue New Guidance Concerning Good-Faith Certification on the Necessity of Loan Request, May 13, 2020, Cy Alba, Kathryn L. Hickey, and Jon Williams. [Read More]

CLIENT ALERT: SBA Implements WOSB / EDWOSB Certification Requirement and Revises Economic Disadvantage Criteria for 8(a) Eligibility, Including Treatment of Retirement Accounts, May 13, 2020, Meghan Leemon. [Read More]

CLIENT ALERT: Social Engineering Fraud: 4 Steps Every Company Needs to Take Right Now, May 13, 2020, Matt Feinberg. [Read More]

CLIENT ALERT: House Introduces Legislation to Modify Existing PPP Regulations, May 12, 2020, Cy Alba. [Read More]

CLIENT ALERT: House Introduces New Legislation Allowing Startups to Access PPP Funding, May 12, 2020, Cy Alba. [Read More]

PilieroMazza Adds Attorneys to List of Super Lawyers®, May 7, 2020
PilieroMazza is pleased to announce that Kathryn HickeyLauren Brier, and Sara Nasseri are now among the Firm’s 13 attorneys distinguished with a listing in the 2020 edition of Super Lawyers®. Attorneys from PilieroMazza’s four core practice areas—including Government ContractsBusiness & CorporateLabor & Employment, and Litigation & Dispute Resolution—are represented in this year’s list. [Read More]

JD Supra: PilieroMazza #1 for Government Contracts Legal Thought Leadership, May 5, 2020
PilieroMazza’s Government Contracts attorneys and their thought leadership took the #1 position in this year’s JD Supra Readers’ Choice Top Firm 2020 Award. Recognized by readers as the Firm’s leading author for content on government contracts law is Sam Finnerty, who earned the JD Supra Readers’ Choice Top Author 2020 Award as one of their top 10 authors. [Read More]

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

State-by-State Business Reopening Guidance
To help track reopening differences across each state and provide the latest guidance and information to employers, the U.S. Chamber of Commerce has launched an interactive map with guides for each state. It provides the latest guidelines, timelines, and critical information for businesses aiming to restart safely and sustainably amid the pandemic. The map can be accessed here.

Paycheck Protection Program Updates

New Senate Bill Could Make PPP Expenses Tax Deductible, May 7, 2020, Cy Alba
On May 6, 2020, members of the Senate Finance Committee introduced the Small Business Expenses Protection Act of 2020, legislation that would allow some small businesses to deduct from their taxes expenses paid with their forgiven Paycheck Protection Program (PPP) loan. Should this bill become law, it would greatly modify current regulations surrounding tax-deductible expenses for small businesses. [Read More]

CARES Act and PPP: Important Updates Regarding Loan Forgiveness Calculations and Returns, May 6, 2020, Cy Alba
On May 5, 2020, SBA and the Treasury Department (Treasury) revised their Frequently Asked Questions (FAQ) concerning the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the PPP. Of note, this new guidance clarifies PPP loan forgiveness amount calculations and extends the deadline for PPP borrowers to return loan proceeds. [Read More]

SBA Issues PPP Guidance on Laid-Off Employees Who Refuse to be Rehired
SBA and the Treasury published an FAQ and corresponding answer regarding whether a borrower’s PPP loan forgiveness amount would be reduced if the borrower laid off an employee, offered to rehire the same employee, and the employee declined the offer. SBA and the Treasury indicated that the PPP loan forgiveness amount would not be reduced, but to qualify for this exemption on the limits of loan forgiveness, the borrower must have made a good-faith, written offer of rehire, and the employee’s rejection of that offer must be documented by the borrower. SBA and the Treasury further noted that employees and employers should be aware that employees who reject offers of re-employment may forfeit eligibility for continued unemployment compensation. The FAQ can be found here, and you can read the Journal of Accountancy’s coverage of this FAQ here.

New Paycheck Protection Program-Related Interim Final Rules
SBA issued several interim final rules that supplement previously posted PPP-related interim final rules with additional guidance.

1. Business Loan Program Temporary Changes, Nondiscrimination, and Additional Eligibility Criteria
Effective since May 8, 2020, this rule answers the questions:

  • Are loan recipients entitled to exemptions on the grounds provided in federal nondiscrimination laws for sex-specific admissions practices, sex-specific domestic violence shelters, coreligionist housing, or Indian tribal preferences in connection with adoption or foster care practices?
  • Do student workers count when determining the number of employees for loan eligibility?

Read the published version here.

2. Disbursements
Effective since May 4, 2020, this interim final rule applies to applications submitted under the PPP through June 30, 2020, or until funds made available for this purpose are exhausted. It answers the questions:

  • Can a borrower take multiple draws from a PPP loan and thereby delay the start of the eight-week covered period?
  • By when must a lender electronically submit an SBA Form 1502 indicating that PPP loan funds have been disbursed?

Read the published version here.

3. Corporate Groups and Non-Bank and Non-Insured Depository Institution Lenders
Effective since May 4, 2020, this interim final rule applies to applications submitted under the PPP through June 30, 2020, or until funds made available for this purpose are exhausted. It answers the questions:

  • Can a single corporate group receive unlimited PPP loans?
  • Can a non-bank lender or non-insured depository institution be approved to be a lender in the PPP if it has originated, maintained, or serviced—but not performed all three of these functions for—more than $50 million in business loans or other commercial financial receivables during a 12-month period in the past 36 months?
  • Can a non-bank lender that does not meet the $50 million threshold in the first interim final rule for originating, maintaining, and servicing loans or receivables apply to be a lender in the PPP?

Read the published version here.

Upcoming Small Business Programs & Advisory Services Presentations

WEBINAR: Understanding and Avoiding Affiliation Under Small Business Contracting Programs, June 3, 2020, Jason Blindauer. [Read More]

CYBERSECURITY & DATA PRIVACY

DOD CMMC FAQ Update
The Department of Defense (DOD) updated its Cybersecurity Maturity Model Certification (CMMC) FAQ, so question 19 states, companies that solely produce Commercial-Off-The-Shelf (COTS) products do not require a CMMC certification.” This is a change from previous statements that all defense contractors, regardless of their size or what they sell, will need the new certification to do business with DOD. The FAQ can be found here.

GOVERNMENT CONTRACTS LAW

FAR Council Rulemaking Error Requires GSA Contractors to Qualify As Small at Time of Award for Certain Orders, May 6, 2020, Sam Finnerty
As we recently wrote, the FAR Council published a final rule on February 27, 2020, that amends the Federal Acquisition Regulation (FAR) to capture regulatory changes made by SBA in 2013, including those pertaining to size representation / certification. However, in drafting the rule, the FAR Council made a critical change that not only deviates from SBA regulations, but also runs counter to everything we know about when the size status of a contractor is determined. All small business concerns should be aware of this rule change and should consult counsel regarding their small business representation duties. [Read More]

DOD Memo: Procurement Integrated Enterprise Environment Capabilities
DOD Acting Principal Director of Defense Pricing and Contracting Kim Herrington released a memorandum on Procurement Integrated Enterprise Environment (PIEE) capabilities. The memorandum highlighted two capabilities recently added to PIEE that enable exchanges of information with industry in a secure, traceable environment.

  • Solicitation Module: The solicitation module enables posting of solicitations to a widespread or restricted audience. A vendor registration guide for contractors on how to set up accounts in the system is available here. Further training for the solicitation module is available here.
  • Contracting Communication Module: The communication module in PIEE enables secure transmission of messages and files among the parties involved in administering a contract. Training for the contracting communication module is available here.

Read the full memo here.

DOD Memo: Update to Standard Procurement System Sunset Date
DOD Acting Principal Director of Defense Pricing and Contracting Kim Herrington released a memorandum to update the Standard Procurement System (SPS) sunset date established in an April 28, 2020, memorandum. DOD’s updated goal is that no contracts, agreements, orders, or solicitations be awarded through SPS after September 30, 2023. Use of SPS for changes to documents issued prior to September 30, 2023, is expected to continue until September 30, 2026. The full memo and April 28, 2020, memo are available here.

FAR Rule Updates
DOD, the General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) issued a summary presentation of Federal Acquisition Regulation (FAR) rules agreed to by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council in the Federal Acquisition Circular for May 6, 2020.

1. Revocation of Executive Order on Non-Displacement of Qualified Workers
This final rule removes subpart 22.12, entitled “Nondisplacement of Qualified Workers Under Service Contracts”, and a related contract clause, from the FAR. The final rule applies to service contracts that succeed a contract for performance by service employees of the same or similar work at the same location. Read the published version here.

2. Applicability of Inflation Adjustments of Acquisition-Related Thresholds
This final rule makes inflation adjustments of statutory acquisition-related thresholds under 41 U.S.C. 1908 applicable to existing contracts and subcontracts in effect on the date of the adjustment. Read the published version here.

3. Tax on Certain Foreign Procurements
This final rule withholds a two percent tax on contract payments made by the U.S. government to foreign persons pursuant to certain contracts. This rule applies to federal government contracts for goods or services that are awarded to foreign persons. Read the published version here.

A companion small entity compliance guide to the rules is available here.

CIO-SP4 for Government Contractors with Cy Alba, May 7, 2020
Cy Alba recently connected with ProposalHelper CEO Reena Bhatia for a town hall Q&A session on CIO-SP4, the multi-billion dollar contract vehicle that is sending ripples through the government contracting community. [Read More]

VIDEO: Past Performance: How to Use Yours, Benefit from Others’, and Defend It from Attacks, May 13, 2020, Sam Finnerty. [Watch Here]

Upcoming Government Contracts Law Presentations

WEBINAR: COVID-19 Legislation: What Federal Contractors Need to Know, May 20, 2020, Cy Alba. [Read More]

WEBINAR: PCI Subcontracting Summit 2020: Subcontracting Plans, May 26, 2020, Cy Alba. [Read More]

LABOR & EMPLOYMENT LAW

VIDEO: SCA Compliance Challenges in a COVID 19 Environment, May 5, 2020, Nichole Atallah and Sarah Nash. [Watch Here]

Read More...

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Weekly Update for Government Contractors and Commercial Businesses - April 24, 2020

If you have questions concerning the content below, please visit this link.

COVID-19 Client Resource Center: To access resources for businesses navigating the COVID-19 crisis, we invite you to visit PilieroMazza’s “COVID-19 Client Resource Center.” Please contact covid19@pilieromazza.com for immediate assistance.

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

$484 Billion Relief Bill Signed Into Law, $310 Billion Allocated to Paycheck Protection Program, April 24, 2020, Dave Shafer
H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, was signed into law today. Appropriating $484 billion in relief for the COVID-19 outbreak, it provides additional funding for small business loans, healthcare providers, and COVID-19 testing. The Small Business Administration (SBA) has been unable to accept new applications for the Paycheck Protection Program or the COVID-19 related Economic Injury Disaster Loan (EIDL) assistance program (including EIDL Advances) because Coronavirus Aid, Relief, and Economic Security (CARES) Act funding was exhausted. The Paycheck Protection Program and Health Care Enhancement Act provides that much-needed funding. [Read More]

Do You Meet the Unique Eligibility Requirements for a Paycheck Protection Program Loan?, April 20, 2020, Jon Williams
If you missed the first batch of loans under the Paycheck Protection Program and want to determine if you are eligible for the next wave of funding, this is what you need to know. [Read More]

President Trump Issues Memorandum Allowing VA to Change Contracts
President Trump issued a memorandum authorizing the Secretary of the Department of Veterans Affairs (VA) to exercise authority under Public Law 85-804, 50 U.S.C. § 1431 et seq., as amended. Under this statute, the President may authorize government agencies, which exercise functions related to national defense, to enter into contracts, amendments, or modifications and to make advance payments thereon whenever the President deems that such action would facilitate the national defense. President Trump’s memorandum gives the VA the authority to act under this statute with respect to contracts performed in support of efforts by the VA to combat the virus. However, the VA may only use this authority with regard to transactions directly responsive to the COVID-19 national emergency. The full memorandum can be found here.

CRS Examines Legislation Affecting Small Business Management and Technical Assistance Training Programs
The Congressional Research Service (CRS) released a report titled, “Small Business Management and Technical Assistance Training Programs.” This report discusses recent legislation affecting federal small business management and technical assistance training programs, including:

  • P.L. 114-88, the Recovery Improvements for Small Entities After Disaster Act of 2015;
  • P.L. 115-141, the Consolidated Appropriations Act of 2018; and
  • The CARES Act, which appropriated $265 million for SBA’s entrepreneurial development programs.

Read the full report here.

NDIA Releases CARES Act Tracker & Small Business Resources by Agency
The National Defense Industrial Association (NDIA) released a tracking sheet that cites pertinent provisions of the CARES Act and offers impact analysis on small business and Department of Defense (DOD) policy. The CARES Act tracker is available here as an Excel download. The NDIA also released a reference guide of agency programs and updates relevant to COVID-19. The chart highlights key takeaways and provides web links to resources categorized by cash flow and contracting assistance. The small business resources chart is available here.

For additional resources on navigating the COVID-19 crisis visit PilieroMazza’s “COVID-19 Client Resource Center.”

GOVERNMENT CONTRACTS LAW

DOD Expects Three-Month Delays in Acquisition Programs
The Federal News Network reported that the Pentagon expects a three-month delay across the board for major acquisition programs, putting a kink in systems like the Ford Class Aircraft Carrier, the Columbia Class Ballistics Missile Submarine, and the Next Generation Operational Control System. “Particularly, we see a slowdown in the shipyards,” Ellen Lord, defense undersecretary for acquisition and sustainment, told reporters at the Pentagon. “Aviation is the most highly impacted sector that we have. Right now there isn’t any specific COVID penalty that we see for a specific program; however, we do anticipate a three-month slowdown in terms of execution.” Federal News Network reporting is available here.

Defense Production Act Orders for COVID-19 Related Medical Equipment, April 7, 2020, Jonathan Pomerance
The outbreak of COVID-19 has rapidly increased demand for medical supplies and equipment such as N95 respirators, isolation gowns, isolation masks, surgical masks, eye protection, intensive care unit equipment, and diagnostic testing supplies. To address the resulting shortage, President Trump issued Executive Order 13909 on March 18, 2020, under the Defense Production Act of 1950 (DPA), authorizing the Department of Health and Human Services to prioritize orders for “health and medical resources needed to respond to the spread of COVID-19, including personal protective equipment and ventilators.”

The DPA allows the government to issue “rated orders” which take priority over a contractor’s pre-existing government and commercial contracts. If you are a contractor providing medical equipment and you receive a rated order for the equipment identified above, it could disrupt pre-existing contracts and operations. Accordingly, it is critical to know your rights and obligations under the DPA. [Read More]

OMB Releases Guidance to Clarify CARES Act Contracting Provisions
Government Executive reported that the Office of Management and Budget (OMB) published a memo to supplement Section 3610 of the $2.2 trillion CARES Act, which allows federal agencies to use their funds to give contractors sick or paid leave during the pandemic if they are not able to access their worksites or telework. Although the administration advised agencies to “maximize telework” for contractors, that is not possible for many contractor jobs, including some involving sensitive or classified work. Government Executive reporting is available here. Read the full memorandum here.

DOD Will Allow Payments to Contractors Who Can’t Work Due to COVID-19
The DOD issued a class deviation and implementation guidance to Section 3610 of the CARES Act that will let agencies reimburse contractors for payment to employees who cannot work because of COVID-19 facility closures or other restrictions. Section 3610 allows agencies to reimburse, at the minimum applicable contract billing rates (not to exceed an average of 40 hours per week), any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of government and contractor personnel, during the public health emergency for COVID-19 through September 30, 2020. The NDIA published an article about the class deviation here.

GSA Class Deviation—Accelerated Payments to Small Business Contractors and Subcontractors
The General Services Administration (GSA) released a class deviation to provide for accelerated payments to contractors that are small businesses and to small business subcontractors by accelerating payments to their prime contractors. The full class deviation is available here.

DOD Accelerates Payments to Small Business Contractors and Subcontractors
The DOD issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to accelerate payments to small business contractors and subcontractors. DOD proposed the rule on May 31, 2019, to implement Section 852 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019. Section 852 provides for accelerated payments to DOD contractors that are small businesses and to small business subcontractors by accelerating payments to their prime contractors. Read the published version here.

DOD Addresses Use of Performance-Based Payments
The DOD issued a final rule amending the DFARS to address the use of performance-based payments. Performance-based payments are tied to the achievement of specific, measurable events or accomplishments that are defined and valued in advance by the parties to the contract. DOD proposed the rule in the Federal Register at 84 FR 18221 on April 30, 2019, to implement Section 831 of the NDAA for FY 2017, which amends 10 U.S.C. § 2307 to address the use of performance-based payments. Read the published version here.

BUSINESS & CORPORATE LAW

Delaware Allows Public Companies to Hold Remote Shareholder Meetings, April 9, 2020, Melissa Rodriguez
On April 6, 2020, Governor John Carney of the State of Delaware issued the Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat. The initial declaration was issued on March 12, 2020. Among other matters relevant as a result of the COVID-19 pandemic, the Declaration touches on a change in shareholder meetings related to publicly traded companies organized in the State of Delaware. [Read More]

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Weekly Update for Government Contractors and Commercial Businesses - April 10, 2020

If you have questions concerning the content below, please visit this link.

COVID-19 Client Resource Center: To access resources for businesses navigating the COVID-19 crisis, we invite you to visit PilieroMazza’s “COVID-19 Client Resource Center.” Please contact covid19@pilieromazza.com for immediate assistance. 

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

CARES Act Guide for Small Business Owners
The U.S Senate Committee on Small Business and Entrepreneurship released a guide for major programs and initiatives under the Coronavirus Aid, Relief, and Economic Security (CARES) Act that will be available from the Small Business Administration (SBA) and additional tax provisions that are outside the scope of SBA. The guide can be found here.

COVID-19 Relief and Assistance Resources for Small Businesses
The Congressional Research Service (CRS) released an insight on “Small Businesses and COVID-19: Relief and Assistance Resources.” It presents selected websites and CRS products relevant to small businesses affected by COVID-19. The insight can be found here.

CRS Examines COVID-19 Stimulus Assistance to Small Businesses
CRS released a report titled, “COVID-19 Stimulus Assistance to Small Businesses: Issues and Policy Options.” The report provides a brief description of SBA's programs and discusses legislation to assist small businesses adversely affected by the COVID-19 pandemic. Read the full report here.

For all CRS products related to COVID-19, see the CRS COVID-19 Resources page here.

Guide to the Economic Injury Disaster Loan Program
The U.S. Chamber of Commerce created a guide to SBA’s Economic Injury Disaster Loan (EIDL) program, which was expanded by the CARES Act. Generally, small businesses and private non-profit organizations are eligible for EIDLs. The Chamber created the guide to help businesses check loan eligibility, understand loan parameters, and find out how to access $10,000 emergency grants. Read more here.

SBA Opens Express Bridge Loan Program to Small Businesses Impacted by COVID-19
SBA announced changes to the Express Bridge Loan Pilot Program (Express Bridge Pilot). A notice from SBA expanded program eligibility to include small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration issued on March 13, 2020. Further, SBA revised requirements to allow Express Bridge Pilot loans made under the COVID-19 Emergency Declaration to be approved through March 13, 2021. Finally, SBA extended the term of the Express Bridge Pilot from September 30, 2020, to March 13, 2021. The extension will assist small businesses that may experience delayed effects resulting from the COVID-19 emergency, permit those small businesses to benefit from the Express Bridge Pilot, and allow SBA to continue to evaluate the program. Read more here.

Paycheck Protection Program

SBA Launches Paycheck Protection Program
SBA Administrator Jovita Carranza launched the Paycheck Protection Program, a $349 billion emergency loan program created by the CARES Act. The program provides forgivable loans up to $10 million to small businesses left financially distressed by COVID-19. The loans, which will be administered at the local level by a national network of banks and credit unions, are designed to maintain the viability of millions of small businesses struggling to meet payroll and day-to-day operating expenses. A list of approved SBA lenders is available here. Read more here.

Guide for Obtaining Small Business Loans Under Paycheck Protection Program
The Washington Post released an article with details on how small-business owners can access the new federal Paycheck Protection Program. The article will continue to be updated as new information is made available. Read more here.

Interim Final Rule on Paycheck Protection Program Loan Implementation
An interim final rule from SBA was published with guidance on SBA’s implementation of the Paycheck Protection Program and related loan forgiveness. The interim final rule was published on the Department of the Treasury website in conjunction with additional information concerning the Paycheck Protection Program, including an updated borrower application form. Read the interim final rule here.

For additional resources on navigating the COVID-19 crisis visit PilieroMazza’s “COVID-19 Client Resource Center.”

GOVERNMENT CONTRACTS LAW

Small Business Best Practices Package for Defense Industrial Base
Several mission-essential businesses have encountered conflicts with local authorities enforcing COVID-19 travel restrictions. The Department of Defense (DOD) has issued a “Best Practices Package,” which includes a safe passage memo template for small businesses to adapt for local use. The memo template outlines the mission-essential nature of business-related movements. Also included in the package is the March 20, 2020, DOD memorandum titled, “Defense Industrial Base Essential Critical Workforce Infrastructure,” as well as other helpful policy memos. Access the full best practices package here.

DOD Establishes COVID-19 Joint Acquisition Task Force to Meet U.S. Medical Equipment Needs
DOD established a joint acquisition task force (JATF) to deal with requests for medical and personal protective equipment from the Federal Emergency Management Agency as well as the Departments of Health and Human Services, Homeland Security, and others. Read more here.

Additional JATF Resources

  • JATF launched an industry portal, the AFWERX portal, for companies to submit proposals to meet the urgent need for medical resources.
  • A JATF fact sheet from the National Defense Industrial Association is available here.

HUBZone Program Flexibility During COVID-19 Outbreak, March 31, 2020, Jon Williams
In a webinar on March 25, 2020, officials with SBA’s HUBZone Program showed that SBA understands the unprecedented COVID-19 outbreak has created some unique challenges for HUBZone firms. Fortunately, SBA acted proactively to provide flexibilities to HUBZone firms that are struggling to maintain their principal office location and employees during this challenging time. [Read More]

DOD Memo Addressing Contractor Delays
DOD issued a memorandum acknowledging the widespread effects of the coronavirus pandemic and noting the regulatory provisions that excuse performance delays. In particular, various Federal Acquisition Regulation (FAR) clauses provide that a contractor will not be in default because of a failure to perform the contract if the failure arises beyond the control of, and without the fault or negligence of, the contractor. These regulations also permit contractors to request equitable adjustments. The DOD memorandum notes that requests for equitable adjustment must be considered on a case-by-case basis, in consideration of the particular circumstances of each contract, impacts realized from COVID-19, applicable law, and regulations, and inclusive of any relief that may be authorized by laws enacted in response to this national emergency. The memorandum further notes that the Office of Management and Budget (OMB) and many senior procurement officials in the various military departments and other agencies issued similar guidance regarding management of contract performance impacted by COVID-19. Read the full memo here.

DOD Class Deviation for Undefinitized Contract Actions During COVID-19
DOD issued a class deviation, which was effective immediately and implements sections 13004 and 13005 of the CARES Act, concerning for undefinitized contract actions (UCA). First, the class deviation established that the requirement that obligations, after receipt of a qualifying proposal, do not exceed 75% of the not-to-exceed price before definitization, as established in Defense Federal Acquisition Regulation Supplement (DFARS) 217.7404-4(a), does not apply to UCAs related to the national emergency for COVID-19, as determined by the head of the contracting activity. Second, the class deviation permits the head of the contracting activity to waive the limitations imposed in DFARS 217.7404(a)(1)(i), 217.7404-3(a), and 217.7404-4(a) for a UCA, if the head of the contracting activity determines that the waiver is necessary due to the national emergency for COVID-19. The class deviation also deletes “without power of redelegation” in DFARS 217.7474-3(a)(1). Read the full text here. DOD issued a revision to the class deviation to address the submission of interim vouchers under classified contracts, which is available here. An FAQ on implementation is available here.

Air Force Policy Memorandum Regarding UCA Exceptions and Authority to Make Determinations of Contract Actions in Support of COVID-19
The Department of Air Force issued a policy memorandum detailing that, in accordance with DFARS 217.7404-5(b), the head of an agency (HOA) may waive the limitations in 217.7404(a), 217.7404-2, 217.7404-3, and 217.7404-4 for undefinitized contract actions (UCA) if the HOA determines that the waiver is necessary to support (1) a contingency operation or (2) a humanitarian or peacekeeping operation. These policies were effectively immediately until incorporated into the Air Force Federal Acquisition Regulation Supplement or otherwise rescinded. Read the full text here.

DOD Government-Wide Commercial Purchase Card Guidance for COVID-19
DOD issued a memorandum that offers information and guidance to promote compliance with acquisition policies applicable to the DOD Government-wide Commercial Purchase Card program. Read the full text here.

DOD Guidance for Determining and Making Commercial Item Procurements in Response to COVID-19
DOD issued a memorandum including a class Commercial Item Determination (CID) prepared by the Defense Contract Management Agency, Commercial Item Group (DCMA CIG) because most of the supplies and services required by DOD in response to COVID-19 will be urgent commercial item procurements. The items listed in the class CID meet the requirements of the commercial item definition under FAR Part 2.101 and are determined to be commercial items. The memorandum states DCMA will update the class CID as appropriate as additional commercial items become known. The DCMA determination does not apply to products or services being procured for non-COVID-19 activities (except for future procurement(s) of the same supplies and / or services that were previously procured using this CID). Read the full text here.

House Committee Chairs Request Extension of Public Comment Periods During Coronavirus National Emergency
The House Armed Services Committee announced that fourteen House Committee Chairmen and Chairwomen sent a letter to OMB’s Acting Director, Russell Vought, requesting an immediate extension of public comment periods, hearings, and meetings due to the coronavirus pandemic. The Chairmen and Chairwomen asked that OMB direct agencies to extend public comment periods by at least 45 days beyond the end of the declared national emergency. The House Armed Services Committee press release can be found here. The letter is available here. A related article from Government Executive is available here.

Jon Williams Comments on How COVID-19 Will Change How You Conduct Business, March 30, 2020
In a March 27, 2020 blog, “How Will COVID-19 Change How You Conduct Business?” by Courtney Fairchild of Global Services, PilieroMazza’s Jon Williams advises “all federal contractors to take time to fully understand their rights and obligations under their contracts, communicate with their agency customers, and document all of the impacts that they are facing as a result of COVID-19.” He goes on to say that “Contractors may be entitled to equitable adjustment and claims based on delays and increased costs of performance, but to consult an advisor before making a move, as every contractor’s situation is different.” [Read More]

Related Government Contracts Law Presentations by PilieroMazza

WEBINAR: CIO-SP4: A Virtual Town Hall Webinar, April 23, 2020, Cy Alba and Reena Bhatia. [Read More]

WEBINAR: PCI Subcontracting Summit 2020: Flowdowns, April 28, 2020, Cy Alba. [Read More]

LABOR & EMPLOYMENT LAW

DOL Issues Temporary Regulations on Day the FFCRA Became Law, April 2, 2020, Nichole Atallah, Sarah Nash and Sara Nasseri
The Families First Coronavirus Response Act (FFCRA) went into effect on April 1st. That same day, the Department of Labor (DOL) issued temporary regulations to implement the new provisions of the Expanded Paid Sick Leave Act and the Expanded Family and Medical Leave Act. The much-anticipated regulations generally follow the additional guidance provided by the DOL in the past few weeks. We previously wrote on the FFCRA on March 18, 2020 (link), and on the additional guidance provided by the DOL on March 30, 2020 (link). For employers, the DOL regulations clarify certain new details regarding implementation of the FFCRA. [Read More]

FFCRA Leave Effective April 1: DOL Issues Additional Guidance, March 31, 2020, Nichole Atallah, Sarah Nash and Sara Nasseri
DOL has issued additional guidance to assist employers in providing FFCRA emergency sick and family leave. We previously wrote on the FFCRA on March 18, 2020 (link). Read our coverage with important information for FFCRA implementation. [Read More]

DOL Implements FMLA Public Health Emergency Leave
The Secretary of Labor issued a temporary rule to implement public health emergency leave under Title I of the Family and Medical Leave Act (FMLA) and emergency paid sick leave to assist working families facing public health emergencies arising out of the COVID-19 pandemic. The leave is created by a time-limited statutory authority established under the FFCRA and is set to expire on December 31, 2020. The FFCRA and the temporary rule do not affect the FMLA after December 31, 2020. This rule is effective April 2, 2020. Read the published version here.

Preliminary Estimate of the Budgetary Effects of FFCRA
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary estimate of the budgetary effects of FFCRA. On a preliminary basis, CBO and JCT estimate that the FFCRA will increase federal deficits by $192 billion over the 2020-2030 period, mostly in fiscal years 2020 and 2021. That estimate includes:

  • a $2.4 billion increase in discretionary spending stemming from emergency supplemental appropriations;
  • a $95 billion increase in mandatory outlays; and
  • a $94 billion decrease in revenues.

Read the full preliminary report here.

Temporary Paid Leave and Family Medical Leave Guide
Because the FFCRA created new temporary paid sick leave and paid FMLA programs that are 100% reimbursable by the federal government, the U.S. Chamber of Commerce created a guide that provides information on requirements, employee eligibility, paid leave calculations, and exemptions. The guide is available for download here.

Employee Retention Tax Credit Guide
Because the CARES Act created a new employee retention tax credit for employers who are closed, partially closed, or experiencing significant revenue losses as a result of the coronavirus pandemic, the U.S. Chamber of Commerce created a guide to help businesses check their eligibility, calculate their credit, and understand which employees count toward eligibility, among other information. The guide is available for download here.

BUSINESS & CORPORATE LAW

Affiliation in the Context of SBA Loans, Guidance for Venture Capital Investors, March 31, 2020
In a guidance document published by the National Venture Capital Association, “Affiliation in the Context of SBA Loans, Guidance for Venture Capital Investors,” PilieroMazza’s Kathryn Hickey offers key takeaways for venture capital investors concerned about SBA affiliation rules in the context of SBA loans. [Read More]

CARES Act Stimulus Loans: "Founders & Friends" Podcast Features Kathryn Hickey, April 1, 2020
Kathryn Hickey, Chair of PilieroMazza’s Business & Corporate Group, examines the CARES Act stimulus loans—including the Payroll Protection Program and the EIDL—and what small businesses and their investors need to know in terms of eligibility requirements, the application process, affiliation concerns, loan forgiveness, and much more. [Read More]

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Weekly Update for Government Contractors and Commercial Businesses - April 3, 2020

If you have questions concerning the content below, please visit this link.

COVID-19 Client Resource Center: To access resources for businesses navigating the COVID-19 crisis, we invite you to visit PilieroMazza’s “COVID-19 Client Resource Center.” Please contact covid19@pilieromazza.com for immediate assistance.

CLIENT ALERT: DOL Issues Temporary Regulations the Day the FFCRA Became Law, April 2, 2020, Nichole Atallah, Sarah Nash, and Sara Nasseri. [Read More]

CLIENT ALERT: FFCRA Leave Effective April 1: DOL Issues Additional Guidance, March 31, 2020, Nichole AtallahSarah Nash, and Sara Nasseri. [Read More]

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

CRS Examines COVID-19 Stimulus Assistance to Small Businesses
The Congressional Research Service (CRS) released a report on COVID-19 small business stimulus assistance. The report provides a brief description of SBA’s programs and discusses recent legislation to assist small businesses adversely affected by the COVID-19 pandemic. Read the full report here.

Historic COVID-19 Stimulus Package: Billions Set Aside for Small Businesses, March 26, 2020, David Shafer
The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") represents an unprecedented stimulus package as the government attempts to mitigate the economic damage associated with the novel COVID-19 pandemic. Read our summary of some of the central components of the stimulus package that focus on economic relief for small businesses. [Read More]

The full text of the CARES Act is available here. A description of the small business provisions in the stimulus is available on the Senate Committee on Small Business and Entrepreneurship website here, and additional information from the CRS is available here.

VA Streamlines VAAR and Aligns with FAR
The Department of Veterans Affairs (VA) issued a final rule amending and updating its VA Acquisition Regulation (VAAR) in phased increments to revise or remove any policy superseded by changes in the Federal Acquisition Regulation (FAR), to remove procedural guidance internal to VA into the VA Acquisition Manual (VAAM), and to incorporate any new agency-specific regulations or policies. The rule is effective April 24, 2020. Read the published version here.

COVID-19 Resources

  1. List of COVID-19 Small Business Relief Programs by State
  2. Coronavirus Acquisition-Related Information and Resources
  3. OMB Issues Guidance on Contract Issues Associated with COVID-19

For additional resources on navigating the COVID-19 crisis visit PilieroMazza’s “COVID-19 Client Resource Center.”

GOVERNMENT CONTRACTS LAW

GSA Launches Coronavirus Acquisition-Related Information and Resources Page
GSA launched a page that consolidates government-wide guidance on COVID-19. The page is available here.

COVID-19 and Federal Procurement Contracts
The CRS released a legal sidebar on COVID-19 and federal procurement contracts. COVID-19 disruptions may make it difficult, and potentially impossible, for some federal contractors to perform government procurement contracts as originally contemplated. Because disruptions will likely alter government procurement priorities, which has prompted questions about how the novel COVID-19 pandemic might affect federal acquisitions and government contractor performance, the legal sidebar examines guidance from the Office of Management and Budget as well as legal mechanisms for addressing COVID-19-related performance issues and the use of the Defense Production Act of 1950. Read more here.

Contracting Officers Can Pay You Even If the Contract Is Shut Down!, March 27, 2020, Cy Alba
We discussed the emergency loan programs and loan forgiveness opportunities for small businesses in the CARES Act. However, it is critical to understand that there other avenues for relief that do not have to wait for SBA or private lenders to start processing such loans. Specifically, OMB Memorandum M-20-18 gave Contracting Officers (“CO”) broad authority and specifically states that all contracting personnel should “feel fully empowered to use acquisition flexibilities.” Further, Section 3610 of the Act, entitled “Federal Contractor Authority,” specifically states that COs have authority to continue paying contractors in order to maintain employment for contractor personnel, even if the contract is subject to a stop work order or other delay. Again, this is true even if no work is being performed on the contract. [Read More]

JEDI Update: Pentagon Files Voluntary Motion for Remand to Reconsider Microsoft Award, March 27, 2020, Lauren Brier
On March 12, 2020, the Department of Defense (DOD) filed a motion for voluntary remand requesting that the Court of Federal Claims (COFC) remand the Joint Enterprise Defense Infrastructure (JEDI) contract case for 120 days. This would allow DOD to reconsider certain aspects of its decision to award the JEDI contract to Microsoft. DOD’s re-evaluation could signify major flaws in the process. [Read More]

8(a) Contractors: To Suspend or Not Suspend In Light of COVID-19, March 25, 2020, Meghan Leemon
If you are an 8(a) contractor, you may have received a notification from your Business Opportunity Specialist regarding a voluntary suspension due to the March 13, 2020 declaration of a national emergency concerning the COVID-19 outbreakCovered below are considerations for 8(a) government contractors before they decide to suspend or not to suspend their participation in the 8(a) program. [Read More]

Stimulus Bill Has $10.5B for Pentagon
The Hill reported that the stimulus package—the CARES Act, which was passed by Congress and signed by President Trump on March 25, 2020—includes $10.5 billion to be allocated to the Department of Defense (DOD) to help the DOD fight the coronavirus. The CARES Act also provides $1 billion for purchases made under the Defense Production Act (DPA), a wartime authority that proponents argue could be used to increase production of coronavirus tests, ventilators, masks and other critical supplies. Read more here.

The National Defense Industrial Association’s overview of the DPA and the Defense Priority and Allocation System is available here.

Emergency Acquisition Flexibilities for COVID-19
The Department of Energy (DOE) and National Nuclear Security Administration (NNSA) Senior Procurement Executives increased the micro-purchase and simplified acquisition thresholds solely for the purpose of direct response to the COVID-19 pandemic emergency. COVID-19 was declared an emergency by President Trump on March 13, 2020. Read more here.

Defense Industrial Base Contract Considerations
The DOD released a memorandum that offers guidance on determining which contractors are considered part of the Essential Critical Infrastructure Workforce. Companies aligned with the definition of Essential Critical Infrastructure Workforce are expected to maintain staffing and work schedules necessary to meet contract requirements. Read the full memorandum here.

Creative Contracting Techniques for Maintaining the Financial Health of the Defense Industrial Base
The Air Force released a memorandum that offers guidance to Contracting Officers under a mandate to “take all prudent actions within their authority to minimize potential negative effects of contract disruptions arising from Coronavirus Disease 2019 (COVID-19).” Read the full memo here.

Pentagon Raises Contractor Payments to Keep Cash Flowing
Bloomberg Politics reported that the DOD, in a move to boost cash flow to large and small defense companies during the coronavirus crisis, will temporarily increase the percentages paid to contractors, known as periodic progress payments. Read more here.

Fiscal Year 2021 NDAA Process Begins
The House Armed Services Committee issued a press release reporting that Chairman Adam Smith (D-Wash.) and Ranking Member Mac Thornberry (R-TX) introduced H.R. 6395, the “by request” version of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021. This procedural measure is traditionally the first step in the legislative process for the NDAA. The legislation filed this week does not reflect substantive work by the Armed Services Committee. Rather, provisions contained in the bill reflect legislative proposals submitted by the Department of Defense. When the House Armed Services Committee meets to consider the FY 2021 NDAA, the content of H.R. 6395 will be struck and replaced with subcommittee and full committee proposals. Read more here.

Related Government Contracts Law Presentations by PilieroMazza

WEBINAR: CIO-SP4: A Virtual Town Hall Webinar, April 23, 2020, Cy Alba and Reena Bhatia. [Read More]

WEBINAR: PCI Subcontracting Summit 2020: Flowdowns, April 28, 2020, Cy Alba. [Read More]

LABOR & EMPLOYMENT LAW

The CARES Act and Leave Guide for Employers: Deciding Which Option is Best for You and Your Employees, March 27, 2020, Nichole D. AtallahSarah L. Nash and Sara Nasseri
The CARES Act allows businesses to apply for loans to continue paying employees and maintaining operations, which may be forgiven, expands on provisions of the Families First Coronavirus Act (FFCRA), and provides for additional flexibilities regarding unemployment insurance, among other aid and relief for employers. The CARES Act is an unprecedented piece of legislation, but many employers are struggling to determine how to make the right choice to save their business and maintain their workforce. In this blog, we are breaking down options for employers who have affected workforces and identifying resources available to them. [Read More]

Employers: A Briefing on Federal Agencies' Responses to COVID-19, March 25, 2020, Nichole AtallahSarah Nash and Sara Nasseri
Federal, state, and local governments are working around the clock to implement various measures in the midst of the COVID-19 crisis. Additionally, a number of federal agencies and departments are also taking action in response to the outbreak. For employers across the nation, it is undeniably an unstable and unclear time, with no concrete signs of when there will be a sense of normalcy again. However, in the meantime, we compiled a list of some of the agencies with brief descriptions of their issued guidance and/or responses for employers to take note of. [Read More]

Temporary Procedures for Personnel Vetting and Appointment of New Employees during Maximum Telework Period due to Coronavirus COVID-19
The Office of Personnel Management (OPM) released a memo that offers guidance on vetting and appointment procedures involving fingerprinting. It also covers procedures involving in-person proof of identity for employment authorization and determining eligibility for issuance of a credential. This guidance is effective until agencies are otherwise notified in writing. Read the full memo here. Related Government Executive reporting on OPM hiring and onboarding policy is available here.

Path to Limit New Paid Sick and Family Leave Obligations If Fewer Than 50 Workers
Bloomberg Government reported that the DOL may have established a path for businesses with fewer than 50 workers to limit new paid sick and family leave obligations to some workers affected by coronavirus. Small businesses can claim an exemption to the Families First Coronavirus Response Act’s (Public Law 116-127) requirement that employers offer paid and partially paid leave for coronavirus-related childcare by determining that it would jeopardize the business’s viability. Those businesses are still required to provide up to two weeks of sick leave for employees subject to quarantine or experiencing symptoms associated with COVID-19, the disease caused by the coronavirus. Bloomberg Government reported that companies can prove the childcare leave requirements put the business in jeopardy in one of three ways. An employer must conclude (1) that providing the leave would cost more than the company’s available revenue, causing the company to “cease operating at a minimal capacity"; (2) that the loss of workers on leave would be a “substantial risk” to the company’s finances or operations; or (3) that there are not enough available and qualified workers to replace employees who are out on leave. Guidance issued by the DOL can be found here.

COVID-19 Resources

  1. Poster: Employee Rights: Paid Sick Leave and Expanded Family and Medical Leave Under the Families First Coronavirus Response Act 
  2. Families First Coronavirus Response Act: Fact Sheet for Employers 
  3. Families First Coronavirus Response Act: Questions and Answers 
  4. Providing Expanded Family and Medical Leave to Employees Affected by COVID-19 Online Dialogue 

For additional resources on navigating the COVID-19 crisis visit PilieroMazza’s “COVID-19 Client Resource Center.”

BUSINESS & CORPORATE LAW

COVID-19 and Its Effects on Credit Facilities, March 30, 2020, Kathryn Hickey and Melissa Rodriguez
With the spread of COVID-19, businesses all over the world have seen their operations affected and their cash flows and production decreased, putting them at risk of default on their credit obligations. The prediction is that the global economy will enter into recession, which will continue to affect the financial situation of millions of businesses. All businesses should consider the available options to remedy any borrowing deficits in light of specific circumstances. [Read More]

Banking Regulators’ Response to COVID-19
The Congressional Research Service (CRS) released an insight discussing banking regulators’ response to COVID-19. Economic conditions deteriorated rapidly over the past few weeks, as the coronavirus outbreak caused many businesses and public institutions to limit or close their operations. Once it became clear that the COVID-19 outbreak would have serious financial ramifications for households and businesses, the federal agencies that regulate banks and credit unions—the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and Consumer Financial Protection Bureau, and the National Credit Union Administration—responded in two general ways:

  • measures to encourage banks to work with customers affected by COVID-19 and
  • adjustments to bank regulation related to capital, liquidity, and supervision.

Read the full Insight here.

CYBERSECURITY & DATA PRIVACY

Coronavirus Will Not Delay Pentagon’s Contractor Cybersecurity Program
Government Executive reported that the DOD officially entered into an agreement with a nonprofit corporation that will serve as the accreditation body for the Cybersecurity Maturity Model Certification program and that the coronavirus pandemic would not delay the DOD’s plan to validate contractors’ cybersecurity plans. Read more here.

White House Releases National Strategy for 5G Security
Nextgov reported that the White House released its National Strategy to Secure 5G of the United States to formally frame how the nation will safeguard fifth-generation wireless infrastructure at home and abroad. The 7-page policy document sets forth the president’s “vision for America to lead the development, deployment, and management of secure and reliable 5G communications infrastructure worldwide, arm-in-arm with [its] closest partners and allies.” Its release marks President Trump’s initial move to meet the requirements laid out in the Secure 5G and Beyond Act. Read more here.

A related CRS report on the national security implications of 5G mobile technologies is available here.

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