The Procurement Playbook

As anticipated, the Trump Administration has continued to build on its emphasis for domestic preference requirements on projects that are subject to the Buy American Act – both for projects that are directly funded by the federal government, or pursuant to the Administration’s January 31, 2019 Executive Order, “Strengthening Buy American Preferences for Infrastructure Projects,” potentially also to projects that are indirectly funded by the government.   The Administration’s latest efforts in this area have come in the form of a July 15, 2019 Executive Order, “Maximizing Use of American-Made, Goods, Products, and Materials.”  While this most recent Executive Order on this subject contains a number of proposed changes, which will need to be implemented through regulations, it proposes two changes that may have significant ramifications for the construction industry.  This alert summarizes the key considerations for construction contractors.

Cybersecurity compliance has become an increasingly trending and important area for government review, especially by the Department of Defense (DoD), placing an emphasis on defense contractors and the government alike in ensuring that sensitive government data residing on nongovernment systems are protected from third party intrusion and disclosure.  Indeed, recent cases in False Claims Act litigation have demonstrated just how serious a contractor’s noncompliance with cybersecurity requirements can be.  For example, in U.S. ex rel. Markus v. Aerojet Rocketdyne Holdings, Inc., the court, in denying the defendant’s motion to dismiss, allowed a non-intervened qui tam complaint to proceed, where the relator alleged that the defendant’s systemic noncompliance with contractual cybersecurity standards resulted in the submission of false claims that the relator claimed warranted the imposition of treble damages that could far exceed the value of the contracts themselves.  2019 WL 2024595 (E.D. Cal. May 8, 2019).  Notably, the court held that the relator had sufficiently pled violations of the False Claims Act even though, as the defendant argued, the regulations in question had recently been issued, frequently amended, and some agency guidance could reasonably be construed as relaxing any requirements.  Id.

On June 20th, David Yang spoke with Law360 to discuss the Defense Contract Audit Agency’s audit backlog milestone. The agency reports they have eliminated a years long backlog of cost audits which is welcome news for contractors. Defending these years-old cost claims can be expensive for contractors. Read the full Law360 article here:

In Cochise Consultancy, Inc. v. United States ex rel. Hunt, 139 S. Ct. 1507 (2019), the Supreme Court of the United States interpreted the statute of limitations (“SOL”) provision of the False Claims Act (“FCA”) to allow a relator’s qui tam action to proceed even though he filed more than six years after the alleged violations occurred (i.e., after the standard SOL period expired).  This decision may restrict SOL defenses for FCA defendants because it confirms that, even if the Government does not intervene, a relator may have up to ten years to file a qui tam action, depending on when “the official of the United States charged with responsibility to act” (to quote the language of the statute) learned the material facts of the right of action. 

Howard Roth will speak on cyber security at the NCMA Puget Sound Chapter meeting on Thursday, May 30th. The Q&A happy hour session will benefit both contractor and government contracts professionals as they navigate the latest in cyber security requirements. Due to space limitations, please reserve your spot by emailing […]

2018 was another banner year for government contract cybersecurity requirements.  Reports separately released by OMB and MITRE suggest that risks for cyber intrusions remain as prevalent as ever, if not more so.  Accordingly, dozens of statutory, regulatory, and agency guidance memoranda on this critical subject were released in 2018 and more are expected to come in 2019, and beyond, as those measures are fleshed out for further development and implementation.

One of these more significant developments is the Department of Defense’s (DoD) increased emphasis on maintaining supply chain integrity for cybersecurity risks.  In this regard, the DFARS Safeguarding Clause 252.204-7012, which applies in all DoD procurements, governs the protection of covered defense information provided to or generated by defense contractors.  In particular, the Clause requires contractors that access covered defense information to take precautions to protect this information.  It also requires that contractors who access this information report cyber incidents, submit malicious software to the Department of Defense Cyber Crime Center, and facilitate a damages assessment in the event of a cyber incident.  The Clause also defines covered defense information to be unclassified controlled technical information or other information marked as such in the contract, or collected, developed, received, transmitted, used, or stored on behalf of the contractor in support of the performance of the contract.

To help you navigate the rough seas of doing business with the federal government in the Trump administration, we have assembled nationally recognized practitioners who will cover topics relevant to government contractors across all industries. Session topics include: The Small Business World – What’s Happened and What’s Happening? David Yang, […]

Perhaps the greatest risk in a federal construction project is the risk of the unknown.  This is especially true in the case of a fixed price project where the majority of the risk is on the contractor who has agreed to do the job for a fixed price, which generally includes […]

The Section 809 Panel, which is tasked with developing and providing recommendations to improve and enhance the efficiency of the Department of Defense procurement system, issued the third volume of its report and recommendations Jan. 15, 2019.  Among the numerous recommendations for streamlining DoD acquisitions, several of which relate to […]

While domestic preference requirements in federal procurements, namely the Buy America and Buy American Acts, are not new their increased emphasis are.  As has been well publicized, a central focus of the Trump Administration has been to encourage and increase the use of domestically sourced products and materials in connection […]