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 - August 19, 2019

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General Services Administration - According to Law360, GSA is seeking up to $20 billion worth of information technology services from disadvantaged small businesses and has asked for feedback before issuing a final solicitation. The Streamlined Technology Acquisition Resource for Services (STARS III) deal would be an indefinite-delivery, indefinite quantity contract open to small businesses eligible for the Small Business Administration’s 8(a) program.   The draft solicitation can be found here.
 
Department of Defense, General Services Administration, and National Aeronautics and Space Administration - DoD, GSA, and NASA issued a proposed rule to amend the Federal Acquisition Regulation (FAR) to support the Small Business Administration’s (SBA) policy of including overseas contracts in agency small business contracting goals. The amendment is consistent with SBA’s regulatory changes, which clarify that small business contracting provisions, e.g., set-asides, may apply to contracts performed overseas. The published version can be found here.
 
DoD, GSA, and NASA also issued a Small Entity Compliance Guide, which was prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. The Guide includes a summary of the rules appearing in Federal Acquisition Circular (FAC) 2019-05, which amends the FAR. The published version can be found here.
 
Small Business Administration - SBA issued a notice that provides a one-year extension of the temporary decrease in the guarantee fees that SBA charges all surety companies and principals on each guaranteed bond (other than a bid bond) issued in SBA’s Surety Bond Guarantee (SBG) Program. The temporary initiative to test lower fees in the SBG Program, which is currently in effect through September 30, 2019, will be extended for an additional year to apply to all SBA surety bond guarantees approved through September 30, 2020. Read more here.
 
Related Small Business Programs & Advisory Services Presentations by PilieroMazza

WEBINAR: SBA Proposed Rule Changes and How They Will Impact Government Contractors, August 20, 2019, Speakers: Megan Connor and Peter Ford.  [Read More]
 
EVENT: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]
 
EVENT: Growth Through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon. [Read More]
 
 
Why Government Contractors Should Know About the Delaware LLC Division Statute, August 20, 2019, Kathryn Hickey
Relatively often in the government contracting industry a business finds itself in the position where, for one reason or another, it needs to split, fracture, or otherwise reorganize its operations by separating one line of business or division into a separate entity. When prime federal contracts are transferred from one entity to another, it often necessitates a novation agreement with the contracting government agency.  Many government contractors discover the novation process to be relatively lengthy and burdensome, with the potential to delay or hinder the ultimate business objectives, and traditional corporate restructurings can be cumbersome and inefficient.  The Delaware Limited Liability Company Act LLC Division Statute provides a potential streamlined path to entity reorganization.  [Read More]
 
Federal Business Opportunities - According to Nextgov, the FedBizOpps website will shut down before the end of 2019, and the comprehensive database of government contracting opportunities will move to a new location. By the end of next year, 10 acquisition-focused websites managed by the General Services Administration (GSA) will be merged together under the new SAM.gov. Read more here, and check out GSA’s fact sheet on the FedBizOpps transition.
 
Department of Veterans Affairs and Department of Defense - The VA announced that it entered into a strategic partnership with the DoD’s Defense Logistics Agency (DLA) to enhance the VA’s supply chain management modernization efforts. The agreement provides the VA with access to DLA’s worldwide procurement system to acquire medical and surgical items; cleaning supplies; construction materials; and other items needed to support veterans. The agreement also combines resources from VA and DoD to create a centralized ordering system for VA. Read more here.
 
Antonio Franco Discusses JEDI Protest with Federal News Network, August 13, 2019
When Judge Eric Bruggink handed down his decision on Oracle's protest of the Defense Department's JEDI cloud contract on July 12, many legal practitioners were more than mildly surprised. And when the US Court of Federal Claims released the judge's mostly unredacted decision 14 days later, the rationale behind the ruling in favor of the Defense Department strategy and against Oracle's claims of conflicts of interest and arbitrary decisions didn't quite put the case to rest. With the JEDI drama far from over, Federal News Network asked Antonio Franco, a senior partner in PilieroMazza's Government Contracts Group, to weigh in on Judge Bruggink's decision. [Read More]
 
Related Government Contracts Law Presentations by PilieroMazza

WEBINAR: SBA Proposed Rule Changes and How They Will Impact Government Contractors, August 20, 2019, Speakers: Megan Connor and Peter Ford.  [Read More]
 
EVENT:  Forming CTAs on GSA Schedules, September 5, 2019, Speaker: Katie Flood.  [Read More]
 
EVENT:  Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]
 
WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]
 
WEBINAR: Subcontract Pricing, September 24, 2019, Speaker: Isaias “Cy” Alba.  [Read More]
 
EVENT: Growth Through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon. [Read More]
 
 
Department of Justice - The DOJ announced that Ambu, Inc., a defense contractor, will pay $3.3 million to resolve False Claims Act allegations that it manufactured products in China and Malaysia for sale to US government agencies in violation of the Trade Agreements Act (TAA). The TAA requires that products sold to government agencies must come from countries with which the US has a trade agreement. However, Ambu manufactured most of its products in China and Malaysia, which are not TAA compliant, and over 80% of its sales to the Defense Logistics Agency and Department of Veterans’ Affairs came from those two countries. Read more here.
 
Related False Claims Act Presentations by PilieroMazza
 
PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends.  Stay tuned for our next episode “Building Compliance: Construction Industry Concerns Under FCA” with Sarah Nash and Jon Williams, which goes live the week of August 19th.  [Read More]
 
 
Office of Personnel Management - OPM issued a proposed rule that would redefine the geographic boundaries of several appropriated fund Federal Wage System wage areas for pay-setting purposes. Based on recent reviews of Metropolitan Statistical Area boundaries in a number of wage areas, OPM proposes redefinitions affecting the following wage areas: Washington, DC; Hagerstown-Martinsburg-Chambersburg, MD; Detroit, MI; Jackson, MS; Meridian, MS; and Cleveland, OH. The published version can be found here, and comments to the proposed rule are due September 13, 2019.
 
Department of Labor - DOL announced that Marcus Stergio was appointed as the DOL’s Office of Federal Contract Compliance Programs (OFCCP) Ombudsman. The OFCCP first announced its plans to implement an Ombudsman in September 2018 in Directive 2018-09. The Ombusman will work with a variety of OFCCP stakeholders nationwide, including federal contractors and subcontractors, contractor representatives, industry groups, law firms, complainants, worker rights organizations, and current and potential employees of federal contractors and subcontractors. Read more here.
 
National Labor Relations Board - The NLRB, in its first decision addressing the lawfulness of employer conduct and mandatory arbitration agreements since the U.S. Supreme Court’s decision in Epic Systems, held that (1) employers are not prohibited under the National Labor Relations Act (NLRA) from informing employees that failing or refusing to sign a mandatory arbitration agreement will result in their discharge; (2) employers are not prohibited under the NLRA from promulgating mandatory arbitration agreements in response to employees opting in to a collective action under the Fair Labor Standards Act or state wage-and-hour laws; and (3) employers are prohibited from taking adverse action against employees for engaging in concerted activity by filing a class or collective action, consistent with the Board’s long-standing precedent.  Read more here. 
 
National Labor Relations Board - The NLRB issued a notice of proposed rulemaking and request for comments regarding proposed amendments to the NLRB’S rules and regulations governing the filing and processing of petitions for a Board-conducted representation election (1) while unfair labor practice charges are pending or (2) following an employer’s voluntary recognition of a union as the majority-supported collective-bargaining representative of the employer’s employees.  The Board also proposes redefining the evidence required to prove that an employer and labor organization in the construction industry have established a voluntary majority-supported collective bargaining relationship. The published version can be found here.  Comments to the proposed rule are due October 11, 2019.
 
Related Labor & Employment Law Presentations by PilieroMazza
 
PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends.  Stay tuned for our next episode “Building Compliance: Construction Industry Concerns Under FCA” with Sarah Nash and Jon Williams, which goes live the week of August 19th.  [Read More]
 
EVENT: Clearing a DOL Audit, September 25, 2019, Speakers: Nichole Atallah and Sarah Nash. [Read More


Why Government Contractors Should Know About the Delaware LLC Division Statute
, August 20, 2019, Kathryn Hickey
Relatively often in the government contracting industry a business finds itself in the position where, for one reason or another, it needs to split, fracture, or otherwise reorganize its operations by separating one line of business or division into a separate entity. When prime federal contracts are transferred from one entity to another, it often necessitates a novation agreement with the contracting government agency.  Many government contractors discover the novation process to be relatively lengthy and burdensome, with the potential to delay or hinder the ultimate business objectives, and traditional corporate restructurings can be cumbersome and inefficient.  The Delaware Limited Liability Company Act LLC Division Statute provides a potential streamlined path to entity reorganization.  [Read More]

Related Business & Corporate Law Presentations by PilieroMazza

EVENT:  Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting
, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]

WEBINAR: Incentive Compensation Plans Designed to Retain Talent and Grow the Business
, October 15, 2019, Speaker: Kathryn Hickey.  [Read More]

 
 

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Weekly Update for Government Contractors and Commercial Businesses - August 12, 2019

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GOVERNMENT CONTRACTS LAW

This Project Is Behind Schedule - What Is a Contractor to Do?, August 6, 2019, Michelle Litteken
Construction projects rarely, if ever, go precisely as planned. One of the most common issues government contractors face is falling behind schedule. A schedule is developed, and then the contractor is confronted with differing site conditions, changes, or a litany of other causes of delay. The contract completion date that seemed easily achievable when performance began may now appear to be impossible to meet. What should a government contractor do to ensure they are compensated and avoid liquidated damages? [Read More]

General Services Administration - Law360 reports that GSA’s pending plan to allow commercial off-the-shelf purchases through an e-commerce portal effectively undermines another effort to streamline its biggest acquisition program. Although federal contractors have largely welcomed the GSA’s pending consolidation of its Federal Supply Schedule contracts from 24 separate contracts into one broad contract, its push to establish an even more streamlined e-commerce portal cuts heavily into the Schedules' reason to exist—providing an easy way for federal agencies to buy commercial products.

Department of Defense, General Services Administration, and National Aeronautics and Space Administration are issuing a final rule amending the Federal Acquisition Regulation to implement a new clause for use in multiple-award indefinite-delivery indefinite-quantity contracts that provides information on the task-order and delivery-order ombudsman. The Final Rule is effective September 6, 2019.  The Final Rule is found here

Department of Defense - DoD issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to partially implement a section of the National Defense Authorization Act (NDAA) for Fiscal Year 2017 that provides a preference for the acquisition of certain commercial services in contracts that exceed the simplified acquisition threshold. The statute provides for a two-tier approval process, depending on the value of the acquisition, if no commercial items are suitable. The published version can be found here.

SCOTUS Strengthens Protections for Federal Government Contractors Under FOIA, August 9, 2019, Patrick Burns
The Freedom of Information Act ("FOIA" or "the Act") provides private citizens access to information in the possession of government agencies that is not otherwise publically available. Unfortunately, an agency's disclosure can potentially include confidential information of a government contractor, such as proposal content, pricing structures, and other proprietary material. Such disclosures are concerning because publically disclosed information can be used by competitors to the great detriment of the contractor. Luckily for contractors, FOIA's power is not unlimited. [Read More]

WEBINAR: SBA Proposed Rule Changes and How They Will Impact Government Contractors, August 20, 2019, Speakers: Megan Connor and Peter Ford.  [Read More]

EVENT:  Forming CTAs on GSA Schedules, September 5, 2019, Speaker: Katie Flood.  [Read More]

EVENT:  Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]

WEBINAR: Subcontract Pricing, September 24, 2019, Speaker: Isaias “Cy” Alba.  [Read More]

EVENT: Growth Through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon. [Read More]

FALSE CLAIMS ACT / LITIGATION & DISPUTE RESOLUTION / LABOR & EMPLOYMENT LAW

PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends.  Stay tuned for our next episode “Building Compliance: Construction Industry Concerns Under FCA” with Sarah Nash and Jon Williams, which goes live the week of August 19th.  [Read More]

BUSINESS & CORPORATE LAW

EVENT:  Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]

WEBINAR: Incentive Compensation Plans Designed to Retain Talent and Grow the Business, October 15, 2019, Speaker: Kathryn Hickey.  [Read More]

LITIGATION & DISPUTE RESOLUTION

SCOTUS Strengthens Protections for Federal Government Contractors Under FOIA, August 9, 2019, Patrick Burns
The Freedom of Information Act ("FOIA" or "the Act") provides private citizens access to information in the possession of government agencies that is not otherwise publically available. Unfortunately, an agency's disclosure can potentially include confidential information of a government contractor, such as proposal content, pricing structures, and other proprietary material. Such disclosures are concerning because publically disclosed information can be used by competitors to the great detriment of the contractor. Luckily for contractors, FOIA's power is not unlimited. [Read More]

CYBERSECURITY & DATA PRIVACY

Department of Homeland Security - Nextgov reports that DHS is building a contract vehicle of vendors able to manage its 17 unclassified security operations centers—the cybersecurity hubs for the government’s central cybersecurity agency. The single contract will likely have multiple awardees, each capable of managing the entirety of operations at each of DHS’s 17 security centers.  DHS issued a request for information outlining its tentative acquisition strategy and asking for feedback from industry on capabilities and approach to obtain additional resources in times of crisis, such as during a large-scale cyberattack. Read more here.

LABOR & EMPLOYMENT LAW

PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends.  Stay tuned for our next episode “Building Compliance: Construction Industry Concerns Under FCA” with Sarah Nash and Jon Williams, which goes live the week of August 19th.  [Read More]

According to Law360, Federal attorneys said that a New York construction firm agreed to pay $435,000 to resolve allegations that it misclassified workers on federally funded projects in order to avoid paying higher wages, and actively worked to conceal its actions.  Nagan Construction admitted in New York federal court to underpaying 20 workers on the two construction projects by classifying them as laborers, a title for those performing unskilled tasks like cleaning and equipment transportation.  Laborers are paid at a lower prevailing wage rate than those who perform skilled tasks such as carpentry and bricklaying—jobs the workers actually performed, the government said.  

According to BGov, the national opioid crisis and the complexities of federal law mean employers must walk a fine line in trying to navigate drug addiction among their workforce.  Drug addiction is protected as a disability—with one notable exception—putting employers at risk of discrimination claims if they are not careful.  However, the illegal use exception prevents a worker who is using illegal drugs from claiming disability protection under the Americans with Disabilities Act.  But, “case law is all over the map” in terms of how recent the drug use must be to be considered current, a Justice Department attorney said recently.  To avoid discrimination claims, employers must avoid a “zero tolerance” approach to workers who test positive for drug use.

EVENT: Clearing a DOL Audit, September 25, 2019, Speakers: Nichole Atallah and Sarah Nash. [Read More

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

Department of Defense, General Services Administration, and National Aeronautics and Space Administration will issue a proposed rule to amend the Federal Acquisition Regulation to support the Small Business Administration’s policy of including overseas contracts in agency small business contracting goals. This amendment is consistent with SBA’s regulatory changes, which clarify that small business contracting provisions, e.g., set-asides, may apply to contracts performed overseas. The unpublished version can be found here.

Department of Defense - DoD issued a proposed rule to amend the DFARS to implement a section of the NDAA for Fiscal Year 2017 that provides limits on the scope of review by the Small Business Administration's procurement center representatives for certain solicitations awarded by or for DoD. The published version can be found here.

Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a Small Entity Compliance Guide.  The Guide has been prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996.  It consists of a summary of the rules appearing in Federal Acquisition Circular (FAC) 2019-04, which amends the Federal Acquisition Regulation.  Read more here.

WEBINAR: SBA Proposed Rule Changes and How They Will Impact Government Contractors, August 20, 2019, Speakers: Megan Connor and Peter Ford.  [Read More]

EVENT: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias “Cy” Alba and Kathryn Hickey. [Read More]

EVENT: Growth Through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon. [Read More]

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Weekly Update for Government Contractors and Commercial Businesses - August 5, 2019

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

FALSE CLAIMS ACT / LITIGATION / CYBERSECURITY & DATA PRIVACY

Have the Flood Gates Opened?: Cisco Settles First-Of-Its-Kind Cybersecurity False Claims Act Litigation,
August 2, 2019, Matthew Feinberg
On July 31, 2019, a False Claims Act matter pending in the United States District Court for the Western District of New York was unsealed, revealing an $8.6 million settlement that may have far-reaching implications for government contractors. The litigation, United States, et al., ex rel. James Glenn v. Cisco Systems, Inc., was initiated in 2011 on behalf of the federal government and a number of state governments, after a Denmark-based employee of a Cisco affiliate was terminated allegedly for reporting a flaw in one of Cisco’s video surveillance products. With the rapidly developing role of cybersecurity in federal procurements, government contractors should clearly understand their obligations, representations, and certifications to avoid False Claims Act liability and ensure compliance. [Read More]

Department of Defense – According to BGOV, a new report is laying the foundation for DoD’s move away from voluntary cybersecurity compliance and toward a more verifiable regime. The National Institute of Standards report, “Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations,” addresses the security of Controlled Unclassified Information (CUI), which is principally held by contractors. The report recommends security requirements applying to “all components of nonfederal systems and organizations that process, store, or transmit CUI.” It includes security recommendations on access control, configuration management, personnel security, and risk assessment. All contractors possessing CUI should review this report, Rob Levinson advises. [Read More]

PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends. Check out our first episode “Cybersecurity, Implied Certifications, and the False Claims Act“ with Isaias Alba, David Shafer, and Jon Williams. [Read More]

GOVERNMENT CONTRACTS LAW

U.S. Court of Federal Claims - According to Law 360, the Education Department acted legally both when it canceled a student loan debt collection contract solicitation and when it launched a more comprehensive replacement, despite its "far from perfect" procurement processes. While "far from procurement paragons," the Education Department's three Next Generation Financial Services Environment solicitations reasonably bundled together debt collection with other student loan services to provide a "cradle-to-grave" approach to loan servicing and would not cause loan servicers to violate debt collection law.

U.S. Court of Federal Claims - According to Law360, the COFC shot down a protest by a Virginia company excluded from a piece of a $37.4 billion contract with the Army, saying the military branch was not required to fix the firm’s mistake during the bidding process. The contract was for command, control, communications, computers, intelligence, surveillance and reconnaissance-related support services. The Army awarded hundreds of contracts as part of the overall $37.4 billion contract. Contracts were awarded in two phases, and in the first phase, the Army rejected the protester’s proposal finding that the protester’s bid did not comply with the solicitation’s requirements because its cost proposal was not in the right format. The Army also rejected a revised bid from the protester in the second phase, again finding that the company’s cost proposal did not meet the requirements.

U.S. General Services Administration - According to GSA.gov, GSA has awarded the first 30 Blanket Purchase Agreements (BPA) on its next generation Maintenance Repair Facility Supplies (MRFS) purchasing channel, further streamlining the acquisition of maintenance, repair, janitorial, and sanitation products government wide. The MRFS Purchasing Channel combines GSA’s Maintenance, Repair and Operations and the Janitorial and Sanitation (JanSan) Purchasing Channels into one program. The BPAs awarded under Multiple Awards Schedules 51V, 73, and 75, are designed to help federal agencies purchase maintenance supplies at best value prices.

Department of Justice – DOJ reported that Regiment Construction Corp. and its principal will pay $2.4 million to resolve allegations that it improperly obtained contracts set aside for companies owned and controlled by service-disabled veterans. The settlement resolves allegations that the New Jersey company and its principal, Daniel Hernandez, made false claims in conjunction with contracts awarded to Regiment by the United States. The government contends that Regiment and Hernandez improperly represented that Regiment was eligible to bid on contract set aside for companies owned and controlled by service-disabled veterans when, in fact, a veteran did not own and control Regiment. The United States contends that Regiment was owned by Hernandez, and not the veteran to whom ownership and control was attributed in Regiment’s certification to the United States.

EVENT: Forming CTAs on GSA Schedules, September 5, 2019, Speaker: Katie Flood. [Read More]

EVENT: Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias Alba and Kathryn Hickey [Read More]

EVENT: Growth through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon [Read More]

LABOR & EMPLOYMENT LAW

According to Law360, New Jersey employers must refrain from using a job seeker's salary history as a factor in hiring decisions — or face hefty fines — under a bill signed into law that aims to close the gender pay gap. Assembly Bill 1094 prohibits businesses from screening candidates based on prior wages, salaries and benefits, and from requiring a minimum or maximum past salary. Under the new law, employers are permitted to consider salary history in determining salary, benefits and other compensation, and may verify salary history if an applicant voluntarily, without prompting or coercion, provides the information. However, an employer cannot use an applicant’s refusal to volunteer salary history as a consideration in hiring decisions. Violations carry penalties of up to $1,000, $5,000 and $10,000.

Office of Personnel Management - OPM is issuing a final rule to update the 2012 North American Industry Classification System (NAICS) codes currently used in Federal Wage System wage survey industry regulations with the 2017 NAICS revisions published by the Office of Management and Budget. The final rule is effective August 29, 2019, and the rule applies for local wage surveys beginning on or after November 6, 2019. The final rule can be found here.

EVENT: Clearing a DOL Audit, September 25, 2019, Speakers: Nichole Atallah and Sarah Nash [Read More]

BUSINESS & CORPORATE LAW

EVENT: Legal and Practical Perspectives on Mergers & Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias Alba and Kathryn Hickey. [Read More]

WEBINAR: Incentive Compensation Plans Designed to Retain Talent and Grow the Business, October 15, 2019, Speaker: Kathryn Hickey. [Read More]

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

EVENT: Top 10 Corporate Mistakes that Small Businesses Make in Federal Contracting, September 19, 2019, Speakers: Isaias Alba and Kathryn Hickey [Read More]

EVENT: Growth through Joint Ventures and Mentor-Protégé Relationships, November 6, 2019, Speakers: Peter Ford and Meghan Leemon [Read More]

 

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Weekly Update for Government Contractors and Commercial Businesses - July 29, 2019

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FALSE CLAIMS ACT / LITIGATION

PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act, which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends. Please subscribe to one of our podcast accounts – Apple Podcasts, Spotify, Google Podcasts, TuneIn, or Stitcher – to receive a notification when the first podcast in this series, “Cybersecurity, Implied Certifications, and the False Claims Act,” with Isaias Alba, David Shafer, and Jon Williams goes live, as well as find links to past podcasts.

CYBERSECURITY & DATA PRIVACY

Department of Defense – The DoD Office of Inspector General (OIG) conducted an audit of the protection of controlled unclassified information (CUI) on contractor-owned networks and systems. The OIG found that DoD contractors did not consistently implement DoD-mandated system security controls for safeguarding Defense information. The OIG identified deficiencies at the nine contractors assessed relating to, among others, using multifactor authentication, enforcing the use of strong passwords, identifying and mitigating vulnerabilities, protecting CUI stored on removable media, documenting and tracking cybersecurity incidents, and implementing physical security controls. The redacted audit report can be read here.

GOVERNMENT CONTRACTS LAW

Better Late Than Never, But Never Late Is Better: Understanding FAR's Government Control Exceptions to Late Proposals, July 24, 2019, Anthony Batt
PilieroMazza attorneys have seen a number of government contractor clients encounter the same problem: They timely emailed a proposal to a government agency, but, for reasons unknown, the proposal was delivered late or was never received by the Contracting Officer (CO). There, the CO normally enforces the Federal Acquisition Regulation's strict "Late is Late" policy and rejects the proposal. Fortunately, in certain circumstances, it is possible to employ the Government Control Exception to salvage allegedly late proposals; however, the Government Accountability Office and the Court of Federal Claims interpret that exception differently. Any government contractor whose timely emailed proposal is rejected due to the "Late is Late" policy, is encouraged to work with an experienced government contracts attorney who can help them overcome the rejection. [Read More]

Court of Federal Claims Denies Oracle Protest of JEDI Contract: Is This It For Oracle? July 26, 2019, Lauren Brier
DoD first released the Joint Enterprise Defense Infrastructure (JEDI) cloud contract on July 26, 2018. One main purpose of the JEDI contract, as listed in the DoD’s published “Determination and Findings,” was to acquire foundational commercial cloud technologies that would “enable war fighters to better execute a mission that is increasingly dependent on the exploitation of information.” With this purpose in mind, the DoD made a controversial decision to move forward with a single-award approach to procure its cloud technologies, a critical decision that has since stymied the JEDI procurement. Most recently, the U.S. Court of Federal Claims dismissed a pre-award protest of the DoD’s decision to make a single-source award, which has since allowed the JEDI contract to move forward. Microsoft and Amazon are the only two viable offerors that remain capable of receiving the award. The DoD’s decision to award to only one of these large vendors could form a trend for agencies to move away from multicloud strategies. It will be important for cloud vendors to keep an eye on whether JEDI succeeds in its base period, as it will likely shape other agencies decisions on whether a single-award approach for future cloud strategies is a trend worth following. [Read More]

Department of Homeland Security – According to Law360, the DHS Inspector General issued a fraud alert about a scheme in which an Atlanta-based, transnational fraud ring poses as government procurement officials to steal electronics from unsuspecting contractors. Per the article, the fraud ring uses real government solicitations for electronic equipment—such as laptops, hard drives and smartphones—and sends fake requests for quotations to contractors across the country.

General Services Administration – According to Law360, the GSA OIG said in a report that a division director at GSA’s Federal Acquisition Service granted a contract to McKinsey & Co. without appropriate pricing information, which could cost federal agencies an estimated $69 million over five years. The OIG said the management consulting contract was wrongly extended to McKinsey at an inflated price, and the division director unethically advocated for McKinsey to win another deal. The OIG recommended that the GSA take steps to ensure similar deals are not awarded in the future without appropriate justification.

Government Accountability Office – According to Law360, GAO denied two companies’ protests over a $13.4 billion multi-award information technology deal, ruling that the Air Force fairly assessed their bids before rejecting them. The GAO ruled that the Air Force's evaluation of proposals from OSC-NDF LLC and Up and Running 6K LLC was reasonable and consistent with the solicitation. GAO also rejected OSC-NDF's argument that the Air Force failed to properly evaluate its bid under two past performance subcategories by ignoring the content of its proposal and imposing requirements that were not included in the call for bids.

LABOR & EMPLOYMENT LAW

EVENT: Clearing a DOL Audit, September 25, 2019, Speakers, Nichole Atallah and Sarah Nash. [Read More]

BUSINESS & CORPORATE LAW

EVENT: Mergers and Acquisitions, September 5, 2019, Speakers: Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: Incentive Compensation Plans, October 15, 2019, Speaker: Kathryn Hickey. [Read More]

SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

EVENT: Forming CTAs on GSA Schedules, September 4, 2019, Speaker: Katie Flood. [Read More]

Please visit this link for a list of upcoming Industry Days and RFP tools and resources.

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Weekly Update for Government Contractors and Commercial Businesses - July 23, 2019

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SMALL BUSINESS PROGRAMS & ADVISORY SERVICES

CLIENT ALERT: SBA to Increase Size Standards with Inflationary Adjustment, July 17, 2019, Megan Connor
On July 18, 2019, SBA issued an interim final rule increasing the receipts-based size standards for inflation. An unpublished version of the rule is available here. The change should be effective August 17, 2019, 30 days after the scheduled publication of the rulemaking. Comments to the rule are due September 16, 2019. For government contractors whose status changes in the System for Award Management ("SAM") from "other than small" to "small," as a result of the inflation adjustment, SBA advises that the business update their SAM profile and complete the "representations and certifications" section of SAM. Doing so will provide a more competitive environment for government contractors whose status changes to a "small business." [Read More] The text of SBA’s interim final rule can be found here. 84 Fed. Reg. No. 138, 34261

WEBINAR: SBA’s Mentor-Protégé Program: How 8(a) Firms Can Grow, Gain Experience, and Win Contracts, July 24, 2019, Speaker, Jon Williams. [Read More]

EVENT: Forming CTAs on GSA Schedules, September 4, 2019, Speaker, Katie Flood. [Read More]

EVENT: Mergers and Acquisitions, September 5, 2019, Speakers, Jon Williams and Kathryn Hickey. [Read More]

LABOR & EMPLOYMENT LAW

CLIENT ALERT: EEOC Announces New EEO-1 Pay Data Reporting Deadline, July 18, 2019, Sarah Nash
September 30, 2019 marks the newly announced deadline for employers who submit annual EEO-1 reports to report employee 2018 pay data to the Equal Employment Opportunity Commission (EEOC). The EEOC revealed the new deadline in a federal court submission last week. UPDATE: Since the original blog on this topic was published, the court issued an order confirming the September 30, 2019 deadline, and requiring the EEOC to collect a second year of data in addition to the 2018 pay information. The EEOC has also since announced its decision to collect 2017 pay data which will also be due this September. Employers (government contractors and commercial businesses) should work with an experienced labor and employment attorney to ensure they comply before the September 30, 2019 deadline. [Read More]

FALSE CLAIMS ACT / LITIGATION

Cybersecurity, Implied Certifications, and the False Claims Act, July 22, 2019, Isaias Alba
As I am sure many of you know and have read about already, the first False Claims Act ("FCA") case, US Ex rel. Markus v. AeroJet Rocketdyne Holdings, Inc., et al., No. 2:15-cv-2245, has been filed in the Eastern District of California by a disgruntled former Director of Cyber Security Compliance and Controls, and it survived a motion to dismiss in May of this year. When the existence of the AeroJet case is layered over the U.S. Supreme Court's findings in Universal Health Servs., Inc. v. US Ex rel. Escobar, 136 S.Ct. 1989 (2016), which confirmed FCA liability based upon implied certifications, a worrisome result can occur. Namely, can the disgruntled employees, aggrieved subcontractors, consultants who see an opening for a quick buck, spouses in the midst of a contentious divorce, or any other random individual with a basic knowledge of your IT systems file an FCA case against you claiming that you impliedly certified, by merely accepting a federal contract, that you were in full and unequivocal compliance with all NIST 800-171 standards and that you had all documentation required by DFARS 252.204-7012. The answer is absolutely "YES." Small to mid-sized government contractors should note that their lack of diligence can be used as evidence of recklessness which gives rise to FCA liability. [Read More]

PODCAST: PilieroMazza’s GovCon Live! presents “Ex Rel. Radio,” our multi-part series on the False Claims Act which will include commentary on potential pitfalls for your company, enforcement issues, and emerging trends. Please subscribe to one of our podcast accounts -- Apple Podcasts, Spotify, SoundCloud, Google Podcasts, TuneIn, or Stitcher -- to receive a notification when the first podcast in this series goes live on July 29, 2019, as well as find links to past podcasts.

Department of Justice (DOJ) – DOJ reported that ITT has agreed to pay the United States $11 million to settle False Claims Act allegations that it supplied electrical connectors to the military that had not been properly tested. The settlement resolves allegations that from September 2008 to March 21, 2017, ITT did not conduct the required periodic testing on six models of electrical connectors.

GOVERNMENT CONTRACTS LAW

How Government Contractors Can Take Advantage of CPARS Trends to Win (and Maintain) Federal Contracts, July 19, 2019, Samuel Finnerty
On July 18, 2019, the Professional Services Council hosted an important event covering Contractor Performance Assessment Reporting System ("CPARS") trends, their impact on contractor past performance ratings, and the consequence they have on winning federal contracts. As one of the speakers at this event, PilieroMazza's Samuel Finnerty offered recommendations on what government contractors can do now to proactively engage and manage their CPARS ratings and position themselves for future growth. [Read More]

The Pentagon – According to Nextgov, the Pentagon released its 5-year digital modernization strategy. The document will offer insight on how the Pentagon plans to prioritize its roughly $46 billion annual IT budget over the next five years. Cloud adoption, artificial intelligence, and cybersecurity will all factor in heavily to the department’s technological future, according to the strategy. Nextgov’s article discussing the modernization strategy can be viewed here.

The White House – Law360 reported that President Donald Trump signed an Executive Order aimed at boosting the government’s purchases of U.S.-made products, marking the President’s latest effort to advance his “Buy American” initiative. The Executive Order calls on agencies to buy 95% of the iron and steel used in government projects from domestic companies, marking a lofty leap from the current 50% threshold. In addition, for non-steel and iron products, the order moves the needle from 50% to 55%, with the possibility of it eventually rising as high as 75%.

ANNOUNCEMENT: PilieroMazza Welcomes Lauren Brier to Government Contracts Group, July 15, 2019, [Read More]

CYBERSECURITY & DATA PRIVACY

Department of Defense Sets Course on Cybersecurity Evaluation and Enforcement, July 17, 2019, David Shafer
On a limited budget, government contractors need to be compliant with a litany of statutes, regulations, and industry standards in order to remain competitive in the marketplace. This has become particularly true in the cybersecurity context. With no overarching federal law for cybersecurity standards or privacy protection (though the U.S. Senate is in the process of discussing a bipartisan privacy bill as they have done, unsuccessfully, in prior legislative sessions), rulemaking authorities have taken it upon themselves to create industry regulations governing cybersecurity and data privacy. Some of them most applicable to government contractors, but by no means exclusive, are those regulations found in the Federal Acquisition Regulation (“FAR”) and Defense Federal Acquisition Regulation (“DFARS”). In this labyrinth of cybersecurity requirements, the Department of Defense (“DoD”) often takes the lead in promulgating guidance, so it is beneficial to look to DoD and the defense industrial base for the future of cybersecurity. This future may come with DoD’s upcoming Cybersecurity Maturity Model Certification, which could fundamentally alter DoD government contract awards and maintenance. [Read More]

BUSINESS & CORPORATE LAW

Trends in Mergers and Acquisitions, July 22, 2019, Francis Massaro
"What's market?" is an important question for the buyer and seller to ask in a merger and acquisition (M&A). Along with counsel from a skilled M&A attorney, having a basic understanding of what terms are typical in the current M&A market will help businesses that are in the market to buy or sell a business (1) better analyze the reasonableness of specific terms offered by the other side and, if an offered term is not typical, have the necessary insight to (2) counter with better terms or to (3) take a more aggressive stance on another term. Businesses whose management teams are equipped with a basic understanding of M&A deal terms can easily work with M&A counsel to more effectively and efficiently identify deal terms and strategies that are ideal for their business needs. [Read More]

EVENT: Mergers and Acquisitions, September 5, 2019, Speakers, Jon Williams and Kathryn Hickey. [Read More]

WEBINAR: No-Man's Land: The Quest to Find Success in Full and Open Competition, October 15, 2019, Speaker, Kathryn Hickey. [Read More]

Kathryn Hickey and David Shafer, PilieroMazza M&A Attorneys Represent Zentech Manufacturing, Inc. in Acquisition by Blackbern Partners
Kathryn Hickey and David Shafer led a team of PilieroMazza attorneys from a cross section of the firm's practice areas – including Business & Corporate Law, Government Contracts, and Labor & Employment – to represent client Zentech Manufacturing, Inc. (Zentech), a Baltimore, Maryland-based, high-reliability electronics contract manufacturer, in its recent acquisition by BlackBern Partners LLC, a New York City based private equity firm. The partnership created by the acquisition, which closed on May 10, 2019, will accelerate efforts to deliver leading electronics manufacturing services (EMS) to the defense, aerospace, medical and other high-reliability industries. [Read More]

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