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 Report for September 21, 2018
SMALL BUSINESS ADMINISTRATION
House Small Business Committee Calls for a Status Update on FAR Revision of Limitations on Subcontracting.Last week, House Small Business Committee Chairman Steve Chabot and Ranking Member Nydia Velázquez sent a letter to the acting administrator of the Office of Federal Procurement Policy requesting a status update of Federal Acquisition Regulation Case Number 2016-011, titled “Revision of Limitations on Subcontracting. Section 1651 of Public Law 112-239, the National Defense Authorization Act for Fiscal Year 2013 (2013 NDAA), made significant changes to the limitations on federal subcontracting, which were reflected in corresponding regulations made by the Small Business Administration (SBA) on May 31, 2016. Section 1651 of the 2013 NDAA and SBA regulations require that the limitations on subcontracting for full or partial small business set-aside contracts, HUBZone contracts, 8(a) contracts, service-disabled veteran-owned small business contracts, women-owned small business, and economically disadvantaged women-owned small business contracts be evaluated based on the amount paid by the federal government, rather than the previously used cost of labor, or cost of manufacturing calculation. Significantly, the 2013 NDAA and SBA regulations exclude from the limitations on subcontracting the work performed by first-tier subcontractors that are considered "similarly situated entities." It has been 6 years since the 2013 NDAA was signed into law and Congress has respectfully requested a status update and timeline. You can find the article here.
Improvements Needed in SBA’s Oversight of 8(A) Continuing Eligibility ProcessesThe Small Business Administration’s (SBA’s) 8(a) Business Development Program provides economically and socially disadvantaged small business owners with business development assistance and greater access to Federal contracting opportunities. The objective was to determine whether SBA’s oversight ensured 8(a) program participants met continuing eligibility requirements. To answer this objective, OIG judgmentally selected two samples for review. First, they reviewed 15 individually owned 8(a) firms, with the highest 8(a) set-aside contract dollars in FY 2016. The 15 firms received $461 million, or 3.96 percent, of the $11.6 billion in 8(a) set-aside contract dollars awarded to individually owned firms in FY 2016. Second, they reviewed 10 individually owned 8(a) firms based on complaints that the OIG Hotline referred to SBA between October 1, 2015, and May 4, 2017, regarding the continuing eligibility of 8(a) participants to assess SBA’s complaint review process as part of its oversight of the program. The OIG also met with SBA officials to gain an understanding of the current 8(a) program structure and processes. Additionally, the OIG reviewed documents associated with the firms’ annual and continuing eligibility reviews, information in SBA’s 8(a) information systems, and third-party sources for indications of ineligibility. It was found that SBA did not consistently identify ineligible firms in the 8(a) program and did not always act to remove firms it determined were no longer eligible for the program. Additionally, SBA did not perform required continuing eligibility reviews when it received specific and credible complaints regarding firms’ eligibility and did not log all complaints. It was found that 20 of the 25 firms reviewed should have been removed from the 8(a) program. These firms received $126.8 million in new 8(a) set-aside contract obligations in FY 2017 at the expense of eligible disadvantaged firms. For more information on the Audit Report, follow this link.
Class Deviation- Permanent Supply Chain Risk Management AuthorityThe Office of the Undersecretary of Defense issued a Class Deviation, which, effective immediately, removes the sunset date at Defense Federal Acquisition Regulations (“DFARS”) SUBPART 239.73--REQUIREMENTS FOR INFORMATION RELATING TO SUPPLY CHAIN RISK, Section 239.7300(b) and changes the statutory citations in OF ARS subpart 239.73 from section 806 Pub. L. 111-383 to 10 U.S.C. 2339a. Contracting officers shall use the provision and clause provided in the attachment to this deviation in lieu of the provision at OF ARS 252.225-7017, Notice of Supply Chain Risk, and clause at 252.225-7018, Supply Chain Risk, as prescribed in the attachment.
Organizational Name Change to Defense Pricing and Contracting
The Office of the Undersecretary of Defense issued the following Memorandum, which, effective immediately, renamed the organization formerly known as Defense Pricing/Defense Procurement and Acquisition Policy (DP/DP AP), as Defense Pricing and Contracting (DPC). The DPC office is currently evaluating their mission, function, and responsibility.
Performance-Based Payments and Progress PaymentsThe Department of Defense (DoD) is hosting a public meeting on October 10, 2018, to obtain views of experts and interested parties in Government and the private sector regarding revising policies and procedures relating to customary progress payment rates and maximum performance-based payment rates for DoD contracts. 83 Fed. Reg. 184, 47867.
VA Acquisition Regulation Changes:The Department of Veterans Affairs (VA) is 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. These changes seek to streamline and align the VAAR with the FAR and remove outdated and duplicative requirements and reduce the burden on contractors. The VAAM incorporates portions of the removed VAAR as well as other internal agency acquisition policy. VA will rewrite certain parts of the VAAR and VAAM, and as VAAR parts are rewritten, to be published in the Federal Register. The first rulemaking revises VAAR concerning Subcontracting Policies and Procedures and Government Property. 83 Fed. Reg. 181, 47097. An additional rulemaking revises VAAR concerning Construction and Architect-Engineer Contracts, as well as affected parts covering the Department of Veterans Affairs Acquisition Regulations System, Foreign Acquisition, Contract Administration and Audit Services, Quality Assurance, Solicitation Provisions and Contract Clauses, and Forms. 83 Fed. Reg. 174, 45384. Finally, a third rulemaking revises the VAAR concerning Contracting by Negotiation and Service Contracting, as well as affected parts covering the Department of Veterans Affairs Acquisition Regulation System, Types of Contracts, Termination of Contracts, Solicitation Provisions and Contract Clauses, and Loan Guaranty and Vocational Rehabilitation and Employment Programs. 83 Fed. Reg. 174, 45374.
‘Unprecedented’ Government Spending Spree Picks Up SpeedAccording to an article on Nextgov.com, the federal government is primed to spend as much as $300 billion in the final quarter of fiscal 2018 as agencies rush to obligate money appropriated by Congress before Sept. 30 or return it to the Treasury Department. The spending spree is the product of the omnibus budget agreement signed six months late in March coupled with funding increases of $80 billion for defense and $63 billion for civilian agencies. The shortened time frame left procurement officials scrambling to find ways to spend the money. Through August, defense and civilian agencies obligated some $300 billion in contracts. But to spend all the money appropriated to them by Congress, they may have to obligate well over $200 billion more in the final quarter of fiscal 2018, which ends in two weeks.
House Small Business Committee Calls for Transparency from Federal AgenciesLast week, House Small Business Committee Chairman Steve Chabot and Ranking Member Nydia Velázquez sent follow-up letters to the heads of three federal agencies requesting further information on small entity compliance guide reporting as required by Section 212 of the Small Business Regulatory Enforcement Fairness Act.
“Small businesses deserve transparency from the federal government and for their voices to be heard in the federal rulemaking process. It is imperative that all federal agencies comply with the law by producing these documents to the Committee, so we can understand the unique effects of regulations on small businesses,” said Chairman Chabot. You can find the letter and more information about this topic here.
Small Business Optimism Hits 45-Year HighOn Tuesday, September 11th, the National Federation of Independent Business (NFIB) released its Small Business Optimism Index from August, which marks a new record high in the survey’s 45-year history. New records were set for job creation plans and unfilled job openings. Inventory investment plans were also at the strongest level since 2005, and capital spending plans were the highest since 2007.
“With small business optimism at the highest its been in 45 years, it’s clear that Americans are prospering, and small businesses are thriving. These historic gains are proof that the new tax law and a reduction in regulations are significantly driving our economic gains. I look forward to seeing continued growth in our economy,” said Chairman Chabot (R-OH)
Chairman Chabot: Our Economy is Full Speed AheadOn Friday, September 7th, House Small Business Committee Chairman Steve Chabot released a statement in light of a U.S. Department of Labor report that 201,000 jobs were created in August, with wages up 2.9 percent for the year, which is the largest increase since June 2009.
“Our economy is going full speed ahead, as evidenced by today’s jobs report released by the Department of Labor. With the unemployment rate remaining near historic lows of 3.9 percent and 201,000 jobs added in August, we are seeing the effects of the tax law and a reduction in regulations. In fact, small business owner’s optimism levels are among the highest in history. It is not just more jobs, but better jobs as wages increased by 2.9 percent from last year, putting more money in hardworking Americans’ pockets. I look forward to more growth from small businesses on Main Street,” said Chairman Chabot.
You can find more information, including the Department of Labor report here.
NLRB Proposes Rule to Limit Joint Employer Test: Small Businesses BewareBy Sarah L. Nash
If at first you don't succeed, try, try again. The National Labor Relations Board ("NLRB") has taken this proverb to heart when it comes to implementing a new test for what it means to be a "joint employer" under the National Labor Relations Act. Following a failed attempt to change the standard through case law, the NLRB is now attempting to revise it by issuing a proposed rule. [Read more]
How New Minimum Wage and Service Contract Act Health and Welfare Rates Apply to Your ContractBy Nichole D. Atallah
As we head into a busy proposal and award season, keep in mind some important changes to Service Contract Act ("SCA") wages and fringe benefits. In July, the Department of Labor ("DOL") issued revised SCA health and welfare ("H&W") benefit amounts, increasing the base rate from $4.41 per hour to $4.48 per hour. An H&W rate of $4.18 per hour is now applicable to employees performing work on contracts that include FAR 52.222-62, Sick Leave for Contractors. This rate takes into account that employers who are required to provide sick leave cannot count sick leave provided against the H&W benefit. Hawaii employers should look closely for special rates that apply to contracts performed there. [Read more]
How a CTA Can Help You Qualify for Government ContractsBy Julia Di Vito
You may have heard of Contractor Team Arrangements ("CTA") that can be used to pursue General Services Administration ("GSA") Schedule contract opportunities, but do you know how a CTA can maximize your ability to qualify for government contracts? CTAs are distinct from traditional prime contractor-subcontractor relationships and joint ventures, and they provide different methods for making your company a more attractive offeror. [Read more]
Taking Advantage of State and Local Small Business CertificationsBy Meghan F. Leemon
Many federal government contractors are familiar with certain federal certifications, such as small business, woman-owned small business, service-disabled veteran-owned small business, and the like, and the contract set-aside benefits that are associated with such socioeconomic designations. While some of these federal certifications may flow down to state and local procurements, many government contractors may also qualify for state and local certifications, which can generate more revenue outside of the ever-competitive federal government contracting marketplace. [Read more]
Weekly Report for September 7, 2018
SMALL BUSINESS ADMINISTRATION
Boosting small business demands big ideasAccording to an article in dcma.mil, there are 28 million small businesses in America, and Defense Contract Management Agency’s small business team wants as many of them as possible to join the defense industrial base. “Our mission is to provide small business support to our defense and government customers by ensuring subcontracting compliance and optimizing subcontracting opportunities,” said Tatia Evelyn-Bellamy, the director of DCMA’s Small Business Office and Small Business Compliance Center. “Our strategy is to actively assist customers in developing aggressive but reasonable subcontracting plans for their contractors and review contractor subcontracting program compliance.” In line with the agency’s over-arching mission of warfighter support, Evelyn-Bellamy explained her team’s effort “in assisting military partners with pre-award and post-award subcontract management, and working with prime contractors to achieve subcontract success” helps foster business innovation and new technology, supports the warfighter, strengthens and sustains the military and economic industrial base, and promotes private enterprise.
In Pursuit of Innovative Technologies, Department of Defense Creates Another Pathway Around Traditional Acquisition RulesAmid the hype over its growing use of Other Transaction Agreements (OTAs), the Defense Department is taking yet another step into unorthodox contracting methods as it pursues more participation from non-traditional vendors. As part of a four-year pilot program, the Pentagon issued new rules that will let its contracting officers move though streamlined acquisition processes when they’re buying “innovative” commercial goods and services. Much like the department’s burgeoning use of OTAs, they will allow the Department of Defense (DoD) to make purchases without issuing traditional requests for proposal and conducting formal competitions. But unlike OTAs, those purchases won’t be restricted mainly to prototypes. And the term “innovative” is fairly broad, under the June 26 guidance DoD published, known as a class deviation. It sweeps up any commercial “technology, process, or method, including research and development, that is new as of the date of submission of a proposal, or any application that is new as of the date of submission of a proposal of a technology, process, or method.” For more information, please visit here.
The Defense Department Federal Acquisition Regulation Supplement made the following changes:
DFARS Case 2018-D042: Repeal of DFARS Clause, Removal of Contractor's Employees. (August 24, 2018) 83 Fed. Reg 165, 42788DFARS Case 2017-D041: Repeal of Independent Research and Development Technical Interchange. (August 24, 2018) Proposed. 83 Fed. Reg 165, 42787
DFARS Case 2017-D034: Antiterrorism Training Requirements for Contractors. (August 24, 2018) 83 Fed. Reg 165, 42820
DFARS Case 2018-D011: Exemption from Design-Build Selection Procedures. (August 24, 2018) 83 Fed. Reg 165, 42850
DFARS Case 2018-D028: Modification of DFARS Clause, Transportation of Supplies by Sea. (August 24, 2018) 83 Fed. Reg 165, 42826
DFARS Case 2017-D011: Restrictions on Acquisitions from Foreign Sources. (August 24, 2018) 83 Fed. Reg 165, 42828
DFARS Case 2018-D007: Sunset of Provision Relating to the Procurement of Certain Goods. (August 24, 2018) 83 Fed. Reg 165, 42822
DFARS Case 2017-D019: Performance-Based Payments and Progress Payments. (August 24, 2018) 83 Fed. Reg 165, 42831
Early Engagement Opportunity: Implementation of National Defense Authorization Act for Fiscal Year 2019. (August 24, 2018) 83 Fed. Reg 165, 42883
Class Deviation-Micro-Purchase Threshold, Simplified Acquisition Threshold, and
According to a memorandum on acq.osd.mil, this class deviation rescinds and supersedes Class Deviation 201 8-00013, dated April 13, 2018. This class deviation increases the micro-purchase threshold for DOD in Class Deviation 2018-00013, from $5,000 to $10,000. Please note, this class deviation does not change the micro-purchase threshold exceptions of $2,000 for acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction); and $2,500 for acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor Standards, provided in the FAR 2.101 definition of "micro-purchase threshold."
Special Emergency Procurement Authority
LABOR AND EMPLOYMENT
Establishing a Minimum Wage for Contractors, Notice of Rate Change in Effect as of January 1, 2019The Wage and Hour Division of the U.S. Department of Labor is issuing this notice to announce the applicable minimum wage rate for workers performing work on or in connection with federal contracts covered by Executive Order 13658, beginning January 1, 2019. Executive Order 13658, Establishing a Minimum Wage for Contractors (the Executive Order or the Order), was signed on February 12, 2014, and raised the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $10.10 per hour, beginning January 1, 2015, with annual adjustments thereafter as determined by the Secretary of Labor (the Secretary) in accordance with the methodology set forth in the Order. The Secretary's determination of the Executive Order minimum wage rate also affects the minimum hourly cash wage for tipped employees performing work on or in connection with covered contracts. The Secretary is required to provide notice to the public of the new minimum wage rate at least 90 days before the rate takes effect. The applicable minimum wage under the Executive Order is currently $10.35 per hour, in effect since January 1, 2018.
Pursuant to the Executive Order and its implementing regulations in the Code of Federal Regulations, notice is hereby given that beginning January 1, 2019, the Executive Order minimum wage rate that generally must be paid to workers performing work on or in connection with covered contracts will increase to $10.60 per hour. Notice is also hereby given that, beginning January 1, 2019, the required minimum cash wage that generally must be paid to tipped employees performing work on or in connection with covered contracts will increase to $7.40 per hour. 83 Fed. Reg. 171, 44906
Surveying Storms: A Deeper Dive into SBA’s Disaster ResponseOn September 5, 2018, the House Small Business Committee held a hearing to examine the U.S. Small Business Administrations’ disaster response. Members of the Committee heard directly from James Rivera, Associate Administrator of the Office of Disaster Assistance at SBA, about the agency’s actions during the 2017 storm season and SBA’s disaster response moving forward. You can find more information here.
NDAA PILIEROMAZZA BLOGS:
The 2019 NDAA Streamlines, Reorganizes, and RedefinesBy Timothy F. Valley
Title VIII—Acquisition Policy, Acquisition Management, and Related Matters of the National Defense Authorization Act for Fiscal Year 2019 ("2019 NDAA") includes a number of changes to the Department of Defense ("DoD") acquisition statutes and the definition of commercial items. These changes appear to be in direct response to the recommendations from the Section 809 Panel (the "Panel") reports from January and June of 2018. In its reports, the Panel noted the sometimes cumbersome and unnecessary complexity of the DoD acquisition system and the confusion surrounding the definition of commercial items. [Read more]
The 2019 NDAA's Impact on Small Business ProcurementBy Samuel S. Finnerty
On August 13, 2018, the John S. McCain National Defense Authorization Act ("NDAA") for Fiscal Year 2019 was signed into law by President Trump. As with prior NDAAs, the 2019 NDAA includes a number of provisions that affect procurement policy, management, and related matters. Below, we summarize some of the more notable provisions that will impact small business procurement. [Read more]
2019 NDAA Raises Micro-purchase Threshold for DoDBy Kathryn V. Flood
The 2019 NDAA brought a welcome surprise for many defense contractors—the DoD plans to increase its micro-purchase threshold from $5,000 to $10,000, which matches the increase given to civilian agencies in last year's NDAA. For the full blog, visit [Read more]
Weekly Report for August 24, 2018
FEDERAL ACQUISITION REGULATIONS
Federal Acquisition Regulation; Paid Sick Leave for Federal ContractorsThe Department of Defense (DoD), General Services Administration (GSA), and NASA are adopting as final, without change, an interim rule amending the FAR to implement the Executive Order, Establishing Paid Sick Leave for Federal Contractors. The interim rule also implemented a final rule issued by the Department of Labor. 83 Fed. Reg. 163, 42569.
Federal Acquisition Regulation: Non-Retaliation for Disclosure of Compensation InformationThe DoD, GSA, and NASA adopted as final, without change, an interim rule amending the FAR to implement Executive Order, Non-Retaliation for Disclosure of Compensation Information. The interim rule also implemented a final rule issued by the Department of Labor. 83 Fed. Reg. 163, 42570.
Office of the Inspector General, Freedom of Information Act ProgramThis final rule removes the DoD’s regulation concerning the Office of the Inspector Genera, Freedom of Information Act program (FOIA). On February 6, 2018, the DoD published a revised FOIA program rule as a result of the FOIA Improvement Act of 2016. When the DoD FOIA program rule was revised, it included DoD component information and removed the requirement for component supplementary rules. The DoD now has one DoD-level rule for the FOIA program that contains all the codified information required for the Department. Therefore, this part can be removed from the CFR. 83 Fed. Reg. 161, 42025.
Government-Wide Commercial Purchase Card Prohibited PurchasesThe Defense Federal Acquisition Regulations Supplement Part 213.3 provides direction for authorizing, establishing, and operating Government-wide Commercial Purchase Card programs (GPC), and directs personnel to follow the guidance in the Department of Defense Government Charge Card Guidebook for Establishing and Managing Purchase, travel, and fuel Card programs. Section A.1.2.4 of the guidebook establishes a list of items prohibited from purchase using GPC. This memo adds the following items to the prohibited list:
• Video surveillance Cameras
• Commercial Unmanned Aerial Systems
For more information, please visit this link.
‘Trump Will Get His Wall,’ Says SenatorAccording to an article in govexec.com, less than two months after activists launched the edgy slogan “Abolish ICE,” the White House on Monday brought more than 100 law enforcement agency leaders and staff to Washington to hear praise and gratitude for Immigration and Customs Enforcement’s work. Both President Trump and Sen. David Perdue, R-Ga., also took the opportunity in the East Room ceremony to predict victory in fulfilling Trump’s long-time campaign promise to build a wall along the U.S.-Mexico border. “I think he will” get his border wall, Perdue said when asked at a panel discussion of agency heads. “It’s no longer a debate between zero and $25 billion, but between $2 billion and $5 billion,” for wall funding provided in preliminary Senate and House versions of the fiscal 2019 Homeland Security appropriations bill. The reason the Senate is in session during August, Perdue said, is partly to tackle the DHS spending bill “soon” after his chamber completes work on the Defense spending bill.
Congress Lowers the Acceptability of LPTABy Michelle Litteken
Government contractors have criticized lowest-priced technically acceptable (“LPTA”) procurements since LPTA was first introduced as a source selection method. In an LPTA procurement, all offerors that meet the requirements in a solicitation are deemed technically acceptable, and award is based solely on price. Critics of LPTA have argued that this source selection technique does not allow an agency to exercise the type of judgment needed when a contract involves complex requirements or when quality, safety, and innovation are paramount. [Read more]
Contractor Who Brought Lawsuit Against Government Faces False Claims Act and Fraud CounterclaimsBy Ambika J. Biggs
The U.S. Court of Federal Claims ("COFC") recently issued an opinion that should give pause to contractors who seek to bring suit against the U.S. government but have not complied with materially relevant government regulations. In LW Construction of Charleston, LLC v. U.S., a government contractor filed suit against the Department of Veterans Affairs ("VA"), alleging that its contract for a construction project at Fort Jackson National Cemetery was wrongfully terminated. The procurement under which LW Construction of Charleston ("LW") had been awarded the contract had been set aside for service-disabled veteran-owned small businesses ("SDVOSB"). Three years after LW filed suit, the government brought counterclaims alleging that LW was not an eligible SDVOSB. [Read more]
Weekly Report for August 17, 2018
SMALL BUSINESS ADMINISTRATION
Small Business Size Regulations: CorrectionSBA revised the entry for NAICS code 336999 under Subsector 336 with the addition of “All Other Transportation Equipment Manufacturing” under the NAICS’ U.S. industry title and “1,000” under Size Standards for number of employees. 83 Fed. Reg 159, 40660.
GENERAL SERVICES ADMINISTRATION
General Services Administration Acquisition Regulation; Federal Supply Schedule, Order-Level Materials; Technical AmendmentGSA is amending the General Services Administration Acquisition Regulation to clarify the text regarding the application of the threshold for order-level materials (OLM). 83 Fed. Reg. 159, 40683. The clarification relates to the applicability of the 33.33 percent threshold on OLMs placed in a task or delivery order or the cumulative value of OLMs in orders against an Federal Supply Schedule (FSS) Blanket Purchase Agreement awarded under a FSS contract.
DEPARTMENT OF DEFENSE
Fiscal Year 2019 NDAA Includes Key Provisions Impacting ContractorsThe NDAA authorizes national security funding and includes changes to acquisition policies for both the DoD and the broader federal government. There are a number of key provisions that will impact the federal contractor community, including:
• Section 880: Imposes government-wide restrictions on the use of “lowest-price technically-acceptable” evaluation factors for complex professional or IT services, allowing federal agencies to have the flexibility necessary to seek and obtain innovative solutions, better outcomes, and, ultimately, the best value on behalf of taxpayers;
• Section 878: Requires a government-wide, uniform definition of, and plan for measuring Procurement Administrative Lead Time to help ensure that agencies solicit and acquire goods and services from contractors in the most effective and efficient manner;
• Section 852: Restores prompt payments to small business subcontractors who support the DoD, continuing a critical lifeline for small businesses that work in the market; and
• Sections 938 and 941-943: Initiates a number of reporting requirements for security clearances that will provide valuable information that Congress can use to craft new programs to reduce the backlog and wait times associated with government security clearances and to make overall improvements to the process moving forward.
The House passed the conference report by a 359-54 vote on July 26, 2018, and the Senate followed on August 1, 2018, by an 87-10 vote. For more information, please follow this link.
How Has Federal Contract Spending Changed over Time?According to an article on datalab.usaspending.gov, over the past decade it has been observed that federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act. As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013. By 2015, contract spending had fallen 27 percent from its 2010 peak before rebounding slightly in the following years.
The Pentagon Is Rethinking Its Multibillion-Dollar Relationship with U.S. Defense Contractors to Stress Supply Chain SecurityAccording to the Washington Post, the Pentagon has a new goal aimed at protecting its $100 billion supply chain from foreign theft and sabotage: to base its weapons contract awards on security assessments—not just cost and performance—a move that would mark a fundamental shift in department culture. The goal, based on a strategy called Deliver Uncompromised, comes as U.S. defense firms are increasingly vulnerable to data breaches, a risk highlighted earlier this year by China’s alleged theft of sensitive information related to undersea warfare and the Pentagon’s decision last year to ban software made by the Russian firm Kaspersky Lab. On Monday, President Trump signed into a law a provision that would bar the federal government from buying equipment from Chinese telecommunications firms Huawei and ZTE Corp., a measure spurred by lawmakers’ concerns about Chinese espionage.
LABOR AND EMPLOYMENT
Strong Pushback on Pa. Overtime ProposalAccording to an article on post-gazette.com, Pennsylvania is pushing to double overtime salary thresholds, potentially making 460,000 salaried workers there eligible to earn time-and-a-half pay under state law. Its proposed regulations would increase the annual overtime salary threshold for executive, administrative, and professional workers from $23,660, the current federal minimum, to $47,892 by January 1, 2022. The proposal comes less than two years after a federal judge struck down a similar Obama-era overtime rule.
House Small Business Committee Chairman Chabot Requests Study on Small Business Intellectual Property ResourcesOn August 13, 2018, House Small Business Committee Chairman Steve Chabot sent a letter to the Honorable Gene Dodaro, Comptroller General of the United States, requesting that the Government Accountability Office study ways in which small businesses and entrepreneurs understand the resources available to help them obtain intellectual property protections. You can find more information here.
President Trump Signs Risch’s Small Business Cybersecurity Legislation into LawOn August 14, 2018, President Trump signed the NIST Small Business Cybersecurity Act, a bipartisan bill authored by Senators Risch and Schatz, which is expected to provide a consistent set of resources for small businesses to protect their digital assets from cybersecurity threats. The legislation comes in response to a growing trend of hackers targeting small businesses in cyberattacks. You can read more about the law here.
Worried About an Organizational Conflict of Interest? It's Time to Mitigate!By Michelle Litteken
The phrase organizational conflict of interest (“OCI”) may result in uncertainty and even anxiety for many government contractors. A contractor may be unsure as to whether it may have an OCI if it submits a proposal for or is awarded a contract. And, if the contractor has an OCI, it may not know if the OCI can be mitigated or what to do to mitigate or avoid the OCI. These are critical considerations, as an OCI may result in an offeror being excluded from a competition, a protest of a contract award, or, potentially, the termination of an existing contract. [More]
Weekly Report for August, 3, 2018
SMALL BUSINESS ADMINISTRATION
Surety Bond Guarantee Program FeesThis document announces a temporary decrease in the guarantee fees that the U.S. Small Business Administration (SBA) charges all Surety companies and Principals on each guaranteed bond (other than a bid bond) issued in SBA's Surety Bond Guarantee Program. 83 Fed. Reg. 146, 36658
Contracting with Small Disadvantaged Businesses and Those Owned by Minorities and Women Has Increased in Recent YearsAccording to an article on GAO.gov, the federal government is one of the country's largest advertisers, spending nearly $1 billion annually on advertising contracts. As it does for virtually all of the products and services it buys, the government seeks to provide procurement opportunities for these contracts to certain socially and economically disadvantaged small businesses and to businesses of any size owned by minorities and women. It was found that the government has generally directed an increasing share of its advertising contract dollars to these businesses, averaging about 13 percent over the past five years.
Improved Information Sharing Could Help DOD Determine Whether Items are Commercial and Reasonably PricedThe Department of Defense (DOD) contracting officers buy products "off the shelf" to take advantage of innovations and save money. But at times they must navigate a complex process to determine if an item is available commercially and at a fair price. It was found that:
• Required market information on specialized products may be hard to find
• Contractors may be slow to provide information
• Additional steps may be needed to determine if a commercial item needs modification before it is DOD-ready
• Earlier determinations on products may not be valid
• DOD's process for determining if an item can be considered commercial and reasonably priced
NDAA Races Through Congress at Historic PaceAccording to an article on Rollcall.com, the House adopted the fiscal 2019 NDAA conference report in a 359-54 vote just before that chamber’s members left town for the August recess. When the Senate adopts and the president signs the measure in the coming days, as they are expected to do, it will mark 58 years in a row the legislation will have become law. But getting to yes usually takes longer than it did this year, only twice in the last 33 years has the measure been enacted prior to the Oct. 1 start of the fiscal year. The most recent time that happened was more than two decades ago, in fiscal 1997. The last time the NDAA was enacted before September was way back in fiscal 1978. “I was actually in the first grade the last time we passed a defense authorization bill this fast,” House Speaker Paul D. Ryan told reporters this week.
LABOR AND EMPLOYMENT
NLRB Will Not Hack Into Prior Decision Regarding Employee Email Use During Non-Work TimeAccording to an article on Employmentlawworldview.com, network security and protection of confidential information are among the reasons many companies place limits on how and when employees may use company-provided email. However, the National Labor Relations Board (NLRB or Board) has largely ignored if not outright rejected these legitimate concerns, finding that under certain circumstances, they are outweighed by the employees’ right to use email as a means to engage in concerted activity protected by Section 7 of the National Labor Relations Act (NLRA), which includes union organizing. The NLRB’s March 24, 2017 decision in Purple Communications, Inc. reconfirmed the Board’s position, first announced in an earlier 2014 decision that an employer that provides its employees with access to company email systems must presumptively allow employees to use those systems during non-work time to engage in NLRA-protected activity. Accordingly, under this standard, an employer who maintains a policy prohibiting employees from all use of company email during non-work time presumptively violates the NLRA.
GENERAL SERVICE ADMINISTRATION
GSA Rolls out Shared Services Pilot for SBIRAccording to an article on FCW.com, the General Services Administration (GSA) hopes to accelerate how small businesses introduce new technologies to federal customers by making the commercialization phase of its small business innovation program a shared services offering. GSA has stood up a pilot plan for its Small Business Innovation Research (SBIR) program. The pilot will make and manage awards for the program through its Office of Assisted Acquisition Services (AAS). AAS’ Great Lakes Region and Federal Systems Integration and Management teams will lead the pilot, which will run through September. Mark Lee, assistant commissioner for the Office of Policy and Compliance in GSA’s Federal Acquisition Service, told reporters in a July 30 conference call that the pilot was prompted by requests from the 13 agencies that use the SBIR program.
Risch, Schatz Legislation to Improve Cybersecurity Resources for Small Businesses Heads to President's Desk, Set to Become LawOn August 1, 2018, the U.S. Senate unanimously passed the NIST Small Business Cybersecurity Act, legislation introduced by Senators Brian Schatz and James Risch. The bipartisan bill will provide a consistent set of resources for small businesses to best protect their digital assets from cybersecurity threats. Small businesses are a pillar of the American economy and make up more than half of all jobs in the United States. But these businesses have also become a major target for cyberattacks.
“Since small and medium businesses suffer most often from cyber-attacks, it is vital that NIST, which sets the standard for cybersecurity resources, provide Main Street America with usable resources on how to keep themselves secure,” said Senator Risch, Chairman of the Senate Committee on Small Business and Entrepreneurship.
You can read more about this legislation here.