Friday Flash, 09.19.14

September 19, 2014

FAR and Beyond Blog

In last week’s article I detailed our upcoming 35^th Anniversary Black Tie Gala and Excellence in Partnership Awards (nominations close October 3^rd!). This week I want to go into a bit more detail about the tentative agenda for our 2014 Fall Training Conference, 35 Years of Commonsense in Government Procurement: Looking Back and Moving Forward, taking place at the JW Marriott in DC on November 6^th.

Morning Session

Registration, breakfast, and networking will begin at 7:00am and I will open the conference at 8:00am with an outline of the day’s events, thank you to our sponsors, and updates on current CGP initiatives. Shortly after, we will hear from our keynote speaker, The Honorable Thomas M. Davis – former Virginia Congressman and Chairman of the House Government Reform Committee – who now serves as the Director of Federal Government Affairs for Deloitte where he continues his commitment to effective, common-sense solutions to government. Mr. Davis will continue our conference theme and be discussing Looking Back and Moving Forward – Post Elections.

The mid morning sessions will include Jeff Koses, Senior Procurement Executive at GSA, discussing GSA Schedules – Retooling for the Future, as well as Brad Medairy, Senior Vice President of Booz Allen Hamilton, discussing Cybersecurity – A Game Changer. The morning will wrap up with our Town Hall session that will give attendees the opportunity to ask questions directly to our panel which will include Anne Rung, OFPP Administrator; Steve Schooner, Professor and Co-Director of the Government Procurement Law Program, George Washington University; Christine Harada, Associate Administrator for Government-wide Policy at the General Services Administration; and representatives from DPAP (Defense Procurement and Acquisition Policy), which is responsible for all Contracting and Procurement policy matters including e-Business in the Department of Defense (DoD). The panel will be discussing a variety of topics such as Innovative, Streamlined, Cost Effective Acquisition – Where Are We, What Needs To Change And How Do We Get There?

Lunch Session

Lunch will begin at approximately 12:30, where we will be joined by our lunchtime speaker, Mike Causey. Mike writes a daily column for Federal New Radio, Mike Causey’s Federal Report, and can be heard daily on the radio as well. Mike’s presentation will be on The Changing Federal Workforce – what it means for government, industry and America. As always, we fully expect his remarks to be thought provoking, insightful, and entertaining!

Afternoon Breakout Sessions

We will be having our ever popular breakout sessions in the afternoon, offering four different topic areas you can choose between at 2:00 and 3:15. Our 2:00 session will allow you the opportunity to attend one of the following:

1.) Electronic Platforms and Social Media – From EMALL to GSA Advantage! to the Common Acquisition Platform – an explanation of how current systems connect and where the government is headed with electronic platforms and the use of social media in the acquisition process.

2.) Global Supply Update – Update on strategic sourcing initiatives ,transitioning from GSA warehouse to Direct Delivery, and more! This breakout will be lead by Shaloy Castle-Higgins, Director, Greater Southwest Acquisition Center; Janet Haynes, Acting, Schedules Acquisition Director, Center for Facilities Maintenance and Hardware (CFMH); Peter Han, Director, National Administrative Services and Office Supplies Acquisition Center; and Brian Knapp, Director, GSA, Integrated Workplace Acquisition Center (IWAC).

3.) Customer Users of Government-wide Vehicles – How do major customers use government-wide vehicles? What are the opportunities and challenges of various vehicles?

4.) OASIS and beyond – Changes in the Acquisition of Professional Services – Topics will include Consolidated Schedules and the future of GSA Schedules, pricing tools, update on OASIS, and use of OASIS as a model for future acquisitions – what works and what doesn’t? Jim Ghiloni, Acting Director of Acquisition Operations, will be leading this breakout, among others.

Our 3:15 session will allow you the opportunity to attend one of the following:

1.) DOD Acquisition Update – Impact of the DOD waiver for Schedules Pricing, changes to commercial acquisition, and significant acquisitions of the military services.

2.) Update on Government-wide IT Acquisitions – A highlight of major acquisition programs supporting the acquisition of government wide IT programs, including CIO-SP3, Alliant, NASA SEWP and more. Don’t miss this opportunity for information and best practices that helps enhance your performance in the IT market. This breakout will be led by Casey Kelly & Team, Integrated Technology Service, GSA; Joanne Woytek, Program Manager, NASA SEWP; Robert Coen, Acting Director, NIH Information Technology Acquisition and Assessment Center (NITAAC); and Kay Ely, Director, IT Schedules Acquisition Center.

3.) Strategic Sourcing – What’s ahead in furniture, managed print services, OPM Training and Management Assistance (TMA), and IT FSSI.

4.) Coming Soon in the Federal Market – Business Analysis. This breakout will be led by Ray Bjorklund, President, Birchgrove Consulting, and Cameron Leuthy, Bloomberg Government.

We will wrap up the day back in the main ballroom for a quick report out from the afternoon breakout sessions and be done around 5:00.

We will have more announcements in the near future regarding newly confirmed speakers, but it is certainly shaping up to be a must attend event and we hope to see you there! Plan on attending? Please visit our website or click here to register– we look forward to your participation! Lastly, thank you again to AvKARE for being our Title Sponsor at this year’s Fall Conference! For a list of sponsorship opportunities, please click here.

Thanks,

Roger Waldron

President

Myth-buster’s Dialogue with PBS Commissioner Norman Dong

This week the Coalition’s Federal Buildings Committee had an opportunity to meet with Public Buildings Service (PBS) Commissioner Norman Dong to discuss where PBS is today and where it is headed in the future. As Commissioner Dong reaches his 6 month milestone as head of PBS, he shared his initial impressions at the agency and its direction in the next five years. Formerly a GSA customer while Chief Financial Officer at the Federal Emergency Management Agency (FEMA), Dong noted that he had experienced firsthand the value that PBS offers its customer agencies. In a tight budget environment, PBS had offered FEMA a plan to save $10 million in its operations budget—which allowed FEMA to avoid cuts in other areas such as personnel. Today Commissioner Dong leads PBS initiatives to do the same for other Federal agencies—identifying ways to be more efficient with government-owned and leased space and saving taxpayer dollars. Two key initiatives that the Commissioner spoke to were GSA’s efforts to reduce the Federal footprint and adopt green technologies. He is also challenging PBS to focus more on its customers, so that agencies utilize GSA’s services because they want to—not because they have to. According to Dong, one of the keys to providing outstanding service to agencies in the long term is a continual investment in PBS’s workforce and its next generation of leaders.

Accompanying Commissioner Dong for the discussion were Assistant Commissioner for Acquisition, Andrew Blumenfeld and Frank Santella, Senior Director for Facilities Management in GSA’s Office of Smart & Sustainable Buildings. The Coalition for Government Procurement sincerely appreciates Commissioner Norman Dong and his team for the engaging discussion about PBS and about opportunities to utilize private sector innovation to help GSA reach its objectives. The Federal Buildings Committee looks forward to working with PBS further as they define the future of Federal facilities services. Members interested in getting involved with the Federal Buildings Committee, please contact Aubrey Woolley at awoolley@thecgp.org.

3 Common Acquisition Platform “Hallways” to Launch Sept 30

In an interview with FCW, FAS Commissioner Tom Sharpe discussed GSA’s plans to launch the first 3 “hallways” of the common acquisition platform by September 30. The first 3 will be IT hardware, IT software, and office supplies. The hallways are designed to assist government purchasers by providing pricing information, agency best practices, white papers and Office of Management and Budget (OMB) guidance all in one place. The hallways will also include links for agency buyers to access non-GSA contract vehicles like NASA SEWP and NIH CIO-SP3. In order to get more detailed pricing information for customer agencies to compare, Sharpe said that GSA “has drafted a General Services Administration Acquisition Regulation (GSAR) to allow more flexibility in how prices-paid data can be collected.” According to FCW, the next step for the GSAR proposal is to go to OMB for review. Then it will be published in the Federal Register for public comment.

Congress Passes CR: Funding Until December 11

This week, both houses of Congress approved a Continuing Resolution (CR) (H.J.Res.124) that funds government agencies through December 11. The bill continues funding for government programs and services at the current annual cap rate of $1.012 trillion. The legislation is headed to the President today for his signature.

Nominate an EIP Awardee Today

Nominate a deserving individual, government organization or federal contractor for an EIP Award today! The Excellence in Partnership (EIP) Awards honor public and private sector organizations and leaders who have made significant strides in promoting and utilizing multiple award contracts, saving taxpayer dollars and contributing to veterans hiring and green initiatives. Awards will be given to individuals, organizations and contractors involved in procurement with GSA, VA, DoD, DHS and other government agencies. EIP Award nominations for 2014 are being accepted in the following categories:

1. Lifetime Acquisition Excellence Award

2. Contractor Savings Award

3. Government Savings Award (Civilian)

4. Government Savings Award (DoD)

5. Myth-Busters Award

6. Best Veteran Hiring Program

7. Green Excellence in Partnership Award

Nominations may be submitted on the CGP website here. If you have any questions, please contact Matt Cahill at mcahill@thecgp.org or (202) 315-1054.

GAO: 8(a) Subcontracting Limitations Not Being Monitored

The Government Accountability Office (GAO) released a report this week recommending that more guidance be included in the Federal Acquisition Regulation (FAR) explaining how 8(a) subcontracting limitations should be monitored. According to GAO, contracting officers are generally not collecting information about the amount of subcontracted work performed under 8(a) contracts. GAO believes that one reason for the oversight is that contracting officers’ responsibilities regarding 8(a) subcontracting limitations are not defined in the FAR. GAO recommends that the Office of Federal Procurement Policy (OFPP) take the appropriate steps to amend the FAR to define contract officers’ responsibilities in this area and require 8(a) contractors to regularly report on the amount of subcontracted work. OFPP agreed with the recommendation; however it could take years to complete the process. OFPP will not be able to begin until after the Small Business Administration (SBA) finalizes its implementing regulations addressing limitations on contracting, which may take several years.

Alliant 2 Meeting Recap

This week, the Coalition’s GWAC/MAC Committee hosted GSA’s Alliant 2 team for a two part open forum on the acquisition strategy for the upcoming Alliant 2 contract. A morning session featured a discussion concerning the Alliant 2 Unrestricted contract, while an afternoon discussion focused on the Alliant 2 Small Business vehicle. GSA speakers included:

Chris Fornecker, Director, GSA Government-wide Acquisition Contracts
Casey Kelley, Director, Enterprise GWAC Division Director
Richard Blake, Senior Technical Specialist
John Cavadias, GWAC Senior Contracting Officer

The team discussed a host of issues regarding the upcoming contract vehicles. GSA plans to release a Request for Information to industry towards the end of October and a draft Request for Proposals in mid-December.

Also at the meeting, the team announced an Alliant 2 / Alliant 2 Small Business (A2/A2SB) GWACs Industry Day. The industry day will take place on November 3 at GSA Headquarters in Washington, DC. Registration information and more details will be communicated at a later date through FedBizOpps and Interact. The Coalition is establishing an Alliant 2 Working Group for members to provide feedback to GSA regarding the acquisition strategy for the upcoming contract. If you are interested please contact Roy Dicharry at rdicharry@thecgp.org.

OPM and GSA to Release HR and Training Draft RFP

This week GSA and the Office of Personnel Management (OPM) announced plans to publish a draft RFP for a new HR and Training strategic sourcing contract by the end of the month. The contract will be the follow-on to OPM’s current Training Management and Assistance (TMA) contract vehicle. The Coalition has a working group of members providing recommendations to the government on the acquisition strategy for the future contract. On October 2, the Coalition’s HR Services and Training (HRST) Working Group will have a myth-buster’s dialogue with:

George Price, Deputy Associate Director, Training and Management Assistance Program, OPM
Jim Ghiloni, Acting Director of the Office of Acquisition Operations, GSA
Bjorn Miller, Contracting Officer, GSA

To join the HRST Working Group, please contact Aubrey Woolley at awoolley@thecgp.org.

DoD Cloud RFP Planned

According to FCW, the Department of Defense will initiate plans for “unified capabilities” (UC) to the private cloud when the National Security Agency approves security procedures for the program. UC will coordinate a series of IP-based services, including voice, video and instant messaging, designed to make internal DOD communications smoother and more secure. A top Army official notes that industry can expect a joint request for proposal for UC in the first quarter of fiscal year 2015.

Healthcare Spotlight

TAA Case Is Study On Contractors’ FCA Vulnerability

By: Donna Lee Yesner, Partner, Morgan Lewis & Bockius LLP and Stephen E. Ruscus, Partner, Morgan Lewis & Bockius LLP

The U.S. Department of Veterans Affairs and Department of Defense are major buyers of medical devices and supplies. Companies wishing to sell in this multibillion dollar market, however, must be aware of an important federal procurement requirement regarding country of origin, which is inapplicable to nonfederal sales, and understand the risk of noncompliance.

Government contractors must agree that the products they sell to the U.S. government under contracts valued in excess of $204,000 comply with the Trade Agreements Act, unless the TAA requirement is waived by a federal agency. Failure to comply with this requirement has provided grounds for whistleblower actions under the False Claims Act, particularly against companies that sell commercial items under Federal Supply Schedule contracts or through Distribution and Pricing Agreements, which require compliance with the TAA.

Recently, Smith & Nephew Inc., a medical device manufacturer, settled what may be the first such case involving allegations that a company knowingly sold medical devices manufactured in a country not compliant with the TAA to the company’s government customers. See United States ex rel. Cox v. Smith & Nephew Inc., No. 2:08-cv-02832 (W.D. Tenn., order of dismissal, Sept. 4, 2014).

Trade Agreements Act Requirements

The TAA is intended to remove barriers to government procurement of foreign-sourced items and to incentivize countries to become signatories to the World Trade Organization Government Procurement Agreement and other international trade agreements. When a contract is subject to the TAA, the Buy American Act and its preference for end items manufactured in the U.S. is waived, creating more opportunity for companies selling foreign-made products. At the same time, the TAA prohibits the U.S. government from acquiring end items other than those made in the U.S. or countries that have signed the WTO GPA (referred to as “designated country end products”), unless the agency determines that offers of eligible items are unavailable or insufficient to fill the agency’s needs. If a contract is below the threshold amount, the agency may acquire an item made in a nondesignated country, such as India or China, under that contract. For contracts in which the quantity of items that may be ordered is indefinite, the estimated contract value is used in determining whether the applicable threshold has been exceeded. As a policy matter, the TAA applies to all FSS contracts, including those covering medical supplies and devices administered by the VA.

The TAA is implemented through mandatory contract clauses in government contracts over the threshold amount and country of origin representations and certifications made by companies responding to a federal contract solicitation, as prescribed by the Federal Acquisition Regulation Part 25.4 and FAR 52.225-3 through 52.225-6. A product’s country of origin must be disclosed when it is manufactured in a nondesignated country. If the TAA applies, the contracting agency, in its discretion, may make a nonavailability determination or may request a categorical waiver of the TAA from the Office of the U.S. Trade Representative. The agency also may order small amounts of the product under individual contracts below $204,000 in value without regard to the TAA. Unless the TAA has been waived or is, by law, inapplicable to a transaction, the acquisition of end items from a nondesignated country violates the TAA. Accurate representations by the contractor are thus necessary for a federal customer to adhere to procurement law and regulations.

The test the government uses for determining country of origin under the TAA is the “substantial transformation” test applied by U.S. Customs and Border Protection when assessing import duties under Section 304 of the Tariff Act of 1930, and implementing regulations. Customs’ regulations define “country of origin” as “the country of manufacture, production or growth of any article of foreign origin entering the United States” and also provide that “[f]urther work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part.” 19 C.F.R. 134.1(b). In general, a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing, but will not result from minor manufacturing or combining process that leaves the identity of the article intact. Determining where a product has been substantially transformed into the end item acquired by the government often requires a fact-intensive analysis of the manufacturing process.

For example, in a July 2014 decision regarding the country of origin of a medical device that interfaces with a breath monitor, Customs considered the country of origin of the item’s components, the extent of the processing that occurred within a country and whether such processing rendered a product with a new name, character and use. The device consisted primarily of tubing from Israel, cut to length in China and combined there with various connectors, filters and adaptors sourced from several countries. The decision noted that the “key issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article,” that “factors such as the resources expended on product design and development, extent and nature of postassembly inspection and testing procedures and the degree of skill required during the actual manufacturing process may be relevant,” and that “assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation.” Holding that the tubing imparted the essential character to the end product and that this tubing was not substantially transformed by the cutting and assembly operations in China, Customs, in this case, held that the country of origin of the finished product was Israel.

Although required to certify TAA compliance, a reseller of an item acquired from its manufacturer may be unable to validate country of origin independently. Recently, however, the D.C. Circuit affirmed in another whistleblower case that resellers may reasonably rely on their suppliers’ country of origin representations, and, absent evidence that would make such reliance unreasonable, need not conduct independent evaluations before they provide their own certifications in order to shield themselves from FCA liability. See United States ex rel. Folliard v. Gov’t Acquisitions Inc., No. 13-7049 (D.C. Cir. Aug. 29, 2014).

This was an important decision for wholesalers and distributors that contract directly with agencies like the DOD and VA to supply medical devices that they purchase from device manufacturers. In such cases, the contractor may not be liable if the product is a nondesignated country end item, but misrepresentation concerning country of origin by the manufacturer supplying the contractor could still be potentially actionable against the manufacturer.

Once a company represents that an item is a U.S. or designated country end product and it is placed on the company’s FSS contract, the company must ensure that units manufactured in nondesignated countries are not delivered to government customers ordering under the FSS. If a manufacturer of medical supplies sources a product in a nondesignated country for sale to commercial customers, because it is more economical to do so, it must have a second, designated-country source before it sells the product to the federal government under its FSS contracts and must have inventory controls designed to ensure that shipments to government customers conform to the representations and certification of TAA compliance. The VA has explicitly advised manufacturers sourcing from nondesignated countries of the need to implement such inventory controls. See Dear Manufacturer Letter here.

Smith & Nephew Settlement

In the Smith & Nephew case, the company allegedly imported items from Malaysia, a nondesignated country, repackaged them in the U.S. and failed to segregate them from products sourced in designated countries that could be sold to the government. Thus, the company could not ascertain whether units shipped to customers that ordered under its medical/surgical FSS contract or the GSA Advantage website were TAA compliant. The company voluntarily disclosed to the DOD Office of Inspector General and VA National Acquisition Center that it may have violated procurement law and the terms of its contracts and took corrective action. However, three months later, a former employee filed a whistleblower action against the company for knowingly violating the TAA, and the court declined to dismiss the case on the grounds that the FCA public disclosure bar applied to the voluntary disclosure.

Reducing the Risk of Liability in TAA Whistleblower Suits

The Smith & Nephew case highlights the vulnerability of device manufacturers that source products from nondesignated countries to potential FCA liability and the need not only for diligence in ascertaining country of origin, but also for controls to prevent products manufactured in nondesignated countries from being supplied to the government when such sales are not permitted.

Reasonable controls could include: (1) a system that identifies country of origin, and segregates and tracks inventory from import to shipment if items are purchased from both designated and nondesignated countries; (2) a system that monitors sourcing decisions before changes are made to ensure the item continues to be substantially transformed in the U.S. or a designated country; (3) a policy requiring country of origin representations of vendors if the components are not later substantially transformed into the delivered end item; and (4) a procedure for obtaining legal opinions when the country of origin is unclear or, in some cases, an opinion from Customs.

Purchasing items made in nondesignated countries may substantially reduce production costs and make economic sense, and a company’s sales to the federal government may be very small compared to its commercial business. However, the risk of exposure to a whistleblower suit and the consequences for failing to implement measures to avoid violating the TAA are likely considerably greater than the cost of compliance.

In the Smith & Nephew case, the company was forced to defend an action that settled for millions of dollars even though it disclosed the situation to the VA, and the department neither referred the matter to the U.S. Department of Justice nor intervened in the whistleblower case after it was unsealed.

Judicial precedent is currently divided over the application of the public disclosure bar to such voluntary disclosures. In the Smith & Nephew decision, it is unclear whether the company’s disclosure to the VA affected the settlement negotiations in which the VA participated, or the department’s decision not to intervene, but it is also noteworthy that the VA’s policy has been to encourage self-disclosure. Thus, although the company’s actions did not shield it from a whistleblower suit, they may have protected the company from greater harm.

Legal Corner

Another Representation (and Likely More False Claims Act Liability) in the Future for Contractors

By: John Horan, Partner, McKenna Long & Aldridge LLP

Contractors will have to provide another written representation to do business with the government. On July 31, 2014, President Obama issued an Executive Order called Fair Pay and Safe Workplaces intended to ensure that contractors comply with the following labor laws:

Fair Labor Standards Act;
Occupational Safety and Health Act;
Migrant and Seasonal Agricultural Worker Protection Act;
National Labor Relations Act;
Davis-Bacon Act;
Service Contract Act;
Equal Employment Opportunity requirements (Executive Order 11246);
Rehabilitation Act (Section 503);
Vietnam Era Veterans’ Readjustment Assistance Act;
Family and Medical Leave Act;
Civil Rights Act (Title VII);
Americans with Disabilities Act;
Age Discrimination in Employment Act;
Federal Contractor Minimum Wage Requirements (Executive Order 13658); and
any equivalent State laws.

The less than stellar showing of government contractors in a Government Accountability Office study on whether contractors comply with labor laws likely provided at least some motivation for the President. See FEDERAL CONTRACTING: Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors, GAO-10-1033 (Sep 17, 2010). After reviewing Federal labor law actions from 2005 through 2009, GAO found that the Department of Labor made 25 of the 50 largest wage assessments against 20 contractors and OSHAassessed eight of the 50 largest workplace health and safety penalties against seven other contractors. In addition, the government awarded fifteen contractors cited for violations of wage and hour determinations, OSHA laws, and National Labor Relations Board requirements over $6 billion in government contracts in 2009.

The President justified his Order by finding that complying with labor laws will “increase efficiency and cost savings in the work performed by government contractors” because compliant contractors are more likely to have “workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services to the Federal Government.” He determined that his Order would also help agencies “avoid distractions and complications that arise from contracting with contractors with track records of noncompliance.”

New Requirements for Contractors, Subcontractors, and Agencies

The Executive Order imposes the following additional requirements for contracts exceeding $500,000, currently without an exception for commercial items (GSA and VA FSS) contracts:

Pre-award Representation with Updates

A contractor will have to provide a representation prior to award of any contract exceeding $500,000 that, to the “best of the offeror’s knowledge and belief,” it has not had an administrative merits determination, arbitral award or decision, or civil judgment, within the preceding three-year period, for violations of labor laws listed above. Where there has been a violation, the CO will provide the contractor with an opportunity to disclose any steps taken to correct the violations or improve compliance with the labor laws. The CO must consider the violation and mitigation information provided by the contractor in making the responsibility determination required for award of the contract. In addition, the contractor must also represent that it will require the same representation for subcontracts exceeding $500,000 (except subcontract for COTS items) and consider disclosure and any mitigating information prior to making any subcontracting decision.

A contractor must update its representations and information every six months for the duration of the contract. Upon receiving an update of a violation, the CO must consider whether to require remedial measures and provide compliance assistance, and whether to exercise an option, terminate the contract, and refer the contractor to the agency suspension and debarment official. In turn, the contractor must consider taking action against a subcontractor that has had a violation whether disclosed by subcontractor or “obtained through other sources.” Likely to ensure that contractors and subcontractors are providing accurate representations and to provide another source of information to COs, the Department of Labor must inform contracting agencies of its investigations of contractors and subcontractors.

Referral to Suspension and Debarment Officer

In addition to taking action under the contract, the CO must forward any adverse information of compliance with labor laws by contractors and subcontractors to the agency suspension and debarment officer.

“Transparency” Requirements

The Order also imposes two requirements on contractors that have a potential for significantly affecting a contractor’s exposure to litigation based on labor laws, which the Order describes as “transparency” requirements. First, contractors must provide employees covered by any of the wage rate labor laws with a weekly statement of hours worked, overtime hours, pay, and any additions made to or deductions made from pay. These disclosures ensure that covered employees have the information required to assess the contractor’s compliance with the wage rate requirements.

Second, for contracts exceeding $1 million, contractors are precluded from obtaining an agreement from employees or independent contractors to arbitrate claims arising under Title VII or any tort related to or arising out of sexual assault or harassment until after the claim arises. Thus, contractors that view arbitration as a protection from costly litigation or verdicts will have a much more difficult time obtaining arbitration agreements from employees.

Flow Down Requirement

The Order also imposes representation requirements on subcontractors. Prime contractors must include the pre-award representation requirement in subcontracts exceeding $500,000 (except subcontracts for COTS items).

Labor Compliance Advisor

The Order requires each agency to designate a senior agency official as a Labor Compliance Advisor. The Labor Compliance Advisor has the responsibility to support the agency, COs, and contractors in complying with the Order, coordinating with the Department of Labor, assist in the development of regulations, send information to the agency suspension and debarment officer, and publicly report annually a summary of “agency actions taken to promote greater labor compliance.”

Regulations to Follow

The Order requires the FAR Council to propose “regulations, rules, and orders” required to carry out the requirements of the Order. In addition, the FAR Council must “propose to amend the [FAR] to identify considerations for determining whether serious, repeated, willful, or pervasive violations of the labor laws . . . demonstrates a lack of integrity or business ethics.” In short, the Order is placing primary responsibility on the FAR Council to ensure a uniform consideration of the effect of labor law violations on responsibility determinations government-wide.

What Does this Mean?

Although the Order does not create new labor law compliance obligations, it imposes obvious additional administrative obligations for contractors and subcontractors. In addition, these requirements will likely create new, fertile grounds for False Claims Act cases. 31 U.S.C. §§ 3729 – 3733. The required representations and potential for submission mitigation information (and continual updates) create new opportunities for contractors to make errors that will be subject to attack as false information submitted to the government knowingly, recklessly, or with deliberate ignorance of its accuracy under the False Claims Act. Moreover, the explicit requirement that COs consider this information in award and administration decisions, such as responsibility determinations, option exercises, and terminations, will provide qui tam relators and the government with a basis to argue that this “false information” was material to the government’s decision to award the contract, permit the contractor to continue performance, and to pay the contractor for its performance.

DoD Allows More Cloud Brokers

In a recent draft memorandum, Department of Defense (DoD) Acting CIO Terry Halvorsen altered plans to make the Defense Information Systems Agency (DISA) the department’s cloud broker. While the new guidance indicates a greater openness to commercial providers, DISA will play a central role in DoD’s move to the cloud, Defense Systemsreports. DISA will continue to focus on ensuring the security of DoD Information Networks and meet the cybersecurity challenges associated with outsourcing DoD missions and data to commercial clouds. Under the new guidance, a DoD component can utilize a commercial cloud provider based on a business case analysis, if the provider meets DoD’s security requirements and is more cost-effective than government solutions. Commercial providers will still need to obtain provisional authorization from DISA.

Green Proving Ground RFI

GSA released a Request for Information (RFI) this week seeking innovative technologies to test for the Green Proving Ground (GPG) 2015 program. Technologies chosen for evaluation will be deployed in a pilot installation at a federally-owned building and receive thorough measurement and verification (M&V) by objective third-party evaluators. GPG technology evaluations inform public and private sector investment decisions, and help accelerate commercialization and adoption within GSA, other federal agencies, and the real estate industry. The technology categories include energy management, lighting, HVAC, water, envelope, and on-site power generation. Responses to the RFI are due November 7, 2014. Online information sessions will also be held on September 30 and November 30, 2014. To register, see the GPG RFI posted on FedBizOpps.

RFI for Buildings Maintenance and Operations FSSI

This week GSA posted a Request for Information (RFI) to gather more input on a potential Federal Strategic Sourcing Initiative (FSSI) for Buildings Maintenance and Operations (BMO). The RFI is focused around four primary, proposed components: (1) service categories, (2) service groupings, (3) labor categories, and (4) geographic service area(s). GSA is encouraging businesses of all sizes to respond to better understand contractors’ current and potential service capabilities, coverage areas, and how labor types are categorized. Responses are due Friday, October 17, 2014. Requests for clarification must be submitted no later than Friday, October 3, 2014, in order to be considered. For more information, see the RFI posted on GSA Interact.

GSAR Proposed Rule: Part 538 Federal Supply Schedule Contracting

GSA published a proposed rule recently to update three sections of the General Services Administration Acquisition Regulation (GSAR)—part 15, Contract by Negotiation; part 538, Federal Supply Schedule (FSS) Contracting; and corresponding areas of part 552, Solicitation Provisions and Contract Clauses. Thirty-five new FSS specific clauses are being added to GSAR parts 538 and 552. According to GSA, these clauses and provisions have already been implemented into the program through internal policy and current FSS solicitations and contracts. Comments on the rule are due November 10, 2014. The Coalition is in the process of reviewing the proposed rule and will submit comments. To submit input on the proposed rule, please contact Aubrey Woolley at awoolley@thecgp.org or (202) 315-1053.

NPRM: Prohibitions Against Pay Secrecy

The Department of Labor published a Notice of Proposed Rulemaking (NPRM) on September 17 to implement Executive Order (EO) 13665 titled, “Non-Retaliation for Disclosure of Compensation Information.” EO 13665 prohibits Federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose compensation. The NPRM proposes amending the equal opportunity clauses included in Federal contracts and subcontracts. It would also require contractors to notify employees and job applicants of the nondiscrimination protection. Comments in response to the NPRM are due December 16, 2014. For more details, see the NPRM notice posted in the Federal Register.

DoD & OMB Seek Comments on Contractor Pay Cap

In a notice of request for public comment, the Office of Federal Procurement Policy (OFPP) and the Department of Defense (DoD) are seeking input for a report to Congress on alternative measures to the current cap on the compensation of contractor employees. Specifically, the government is looking for comments on alternative benchmarks that would provide a more appropriate measure of allowable compensation. The comments should both describe the alternative(s) and explain why they might be more suitable than the benchmark and inflators set forth in statute. Comments are due on or before October 16, 2014 to compcap@omb.eop.gov.

False Claims Act Webinar with Steptoe & Johnson – October 22

Given continuing audit scrutiny and the significant monetary incentives for private relators to file and pursue claims under the civil False Claims Act (FCA), the FCA continues to be a significant consideration for Federal Government contractors and their suppliers. In particular, the GSA’s Multiple Award Schedules (MAS) program presents many unique and significant FCA-related risks due to certain GSA requirements.

To assist in-house counsel, compliance officers, and contracts personnel in understanding those risks, this webinar will identify potential FCA risks and traps for the unwary under the GSA MAS program by using “real world” examples from recent FCA complaints and settlements, including potential FCA risks arising from the commercial sales practices disclosures, compliance with the Price Reductions Clause, the Trade Agreements Act, and indirect sales through resellers.

Presenters:

Pricing:

Keystone Member: Complimentary
Premier Member: Complimentary
Regular Member: $50
Non-Member: $80
Government: $10