Friday Flash, 09.26.14

September 26, 2014

FAR and Beyond Blog

The current procurement passion for collecting data, in particular prices paid data, raises many policy questions. Coalition members have, on a number of occasions, indicated that data is not a free good! Shifting the burden of data management and reporting to federal contractors increases costs for industry, and therefore, government; costs that are ultimately borne by the American people. The passion for data reporting can overshadow the fundamental purpose of a government contract, which is the delivery of products, services and solutions to meet customer agency missions. Contracts should be structured to maximize the potential for contractors to deliver best value to customer agencies. The impetus must be on contract structures that maximize performance of mission requirements rather than data reporting.

It is time for a comprehensive dialogue between government and industry regarding data collection. Among the questions to be discussed are the following:

How can government and industry work to together towards common sense management of data?
What does the Federal Acquisition Regulation (FAR) say about determining a “fair and reasonable” price?
What will the information be used for?
What data is relevant?
Can the government collect its own transactional data?
What information will be in the prices paid portal?
When does the Paperwork Reduction Act apply to new contract provisions seeking additional data?

A dialogue around these fundamental questions is the first step towards government and industry working together towards common sense management of procurement data.

The FAR guidance regarding determining a “fair and reasonable” price should inform the collection, management and use of prices paid information. As a threshold matter, FAR 15.404-1(b)(2)(i) states that “[n]ormally, adequate price competition establishes a fair and reasonable price.” As such, under the GSA Schedule program or any other multiple award IDIQ (e.g. Seaport-e, Alliant, NASA SEWP, Networx), adequate price competition at the task order level for agency specific requirements is sufficient to determine fair and reasonable pricing. Agency specific requirements and commitments at the task order level drive competition and pricing. Accordingly, what role will the prices paid portal data play?

Price alone is incomplete data. The FAR provides guidelines for comparing proposed prices to historical prices paid, for the same or similar items. Notably, FAR 15.404-1(b)(2)(ii)(A)(B) states:

(A) The prior price must be a valid basis for comparison. If there has been a significant time lapse between the last acquisition and the present one, if the terms and conditions of the acquisition are significantly different, or if the reasonableness of the prior price is uncertain, then the prior price may not be a valid basis for comparison.

(B) The prior price must be adjusted to account for materially differing terms and conditions, quantities and market and economic factors. For similar items, the contracting officer must also adjust the prior price to account for material differences between the similar item and the item being procured.

Does the prices paid portal include sufficient information for contracting officers to comply with the above guidance? Are contracting officers sufficiently trained to identify, understand and reasonably consider and adjust prior prices based on materially different terms, quantities, and market and economic factors?

The underlying concern across industry is that the prices paid portal will be used to drive contract level prices to the lowest reported point, regardless of terms and conditions, quantities, market and economic factors. This type of pricing is not sustainable by industry over the long term. Such an approach may make for a short term “gain” or headlines regarding savings by the government. However, such an approach will compromise the government‘s long term, strategic interests in fostering competition, ensuring best value mission support and access to “priceless” commercial innovation.

Roger Waldron

President

President Signs CR

On Friday September 19, President Obama signed the Continuing Resolution (H.J. Res.124). The CR passed on September 18 by a margin of 319 to 108 in the House and 78 to 22 in the Senate. The CR will fund government agencies through December 11 at the current annual cap rate of $1.012 trillion.

Join the 2014 Fall Training Conference, EIP Awards & 35th Anniversary Gala

This two day event begins the evening of November 5th with our 15th annual Excellence in Partnership (EIP) Awards, recognizing outstanding federal and contractor organizations and employees that support the evolving needs of government. The Gala will be held at the Ronald Reagan Building and International Trade Center in Washington, D.C. The evening’s events will include a networking reception, plated dinner, look back at The Coalition’s past 35 years, and a conversation with our guest speaker Cory Gritter, a medically retired veteran of the United States Marine Corps and President of Gritter-Francona, Inc., a Service Disabled Veteran Owned Small Business that focuses on Information Technology and Cyber Security services. In honor of our nation’s veterans, and in conjunction with the George Washington University, the evening features a silent auction to support the Coalition’s endowment for veterans enrolled in GW’s Law school or Master’s degree program in government contracting. If you are able, we kindly ask that you and/or your company donate an item for this special occasion. Please contact Matt Cahill at mcahill@thecgp.org or 202-315-1054 to discuss your donation to the auction! Here’s an example of some items already donated:

Suite at the Verizon Center (18 seats + 3 parking passes) for February 3rd at 7:00 p.m. when the Caps play the Kings (Stanley Cup Champions) – donated by Lockheed Martin
Box Seats at Nationals Park – donated by Baker Tilly
Golf Lessons and a Foursome – donated by Whiskey Creek Golf Club
Patriotic Quilt – made and donated by Robin Klonarides of Raytheon
Football Memorabilia signed by Ron “Jaws” Jaworski – donated by the Judge Group
NFL Football Helmet signed by 2013 Rookie Class – donated by Berkeley Research Group and the NFL Players Association

The following day, November 6th, our 2014 Fall Training Conference will take place at the JW Marriott hotel, directly across the street from the Ronald Reagan Building. The conference addresses current topics and trends affecting government-wide contracts. Timely, interactive sessions will focus on innovative approaches to federal acquisition. Please see the full draft agenda here.

Additionally, please check out our sponsorship opportunities for both day’s events here and contact Matt Cahill to secure your preferred sponsorship now!

Lastly, please don’t delay, register for this exciting two day event today by click here!

EIP Nominations Due Oct 3

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.

Introducing Better Buying Power 3.0

The Department of Defense (DoD) has released the third iteration of its Better Buying Power (BBP) guidance to enhance its acquisition practices. According to Undersecretary of Defense for Acquisition, Technology and Logistics (AT&L) Frank Kendall, a central theme of BBP 3.0 is to incentivize businesses to innovate and invest more in research and development. Many of the “core” BBP initiatives from the 1.0 and 2.0 are continued in the 3.0 version. These include a continued focus on:

Setting and enforcing affordability constraints
Should-cost management
Data to inform policy
Use of competition in procurements
Incentivizing productivity in industry and government
Improving the acquisition workforce

BBP 3.0 focuses on enhancing the products produced for warfighters, giving them dominant capabilities on the battlefields of the future. The Department will incentivize innovation in industry and government through a number of initiatives:

Increase the use of prototyping and experimentation
Emphasize technology insertion and refresh in program planning
Use Modular Open Systems Architecture to stimulate innovation
Increase the return on Small Business Innovation Research (SBIR)
Provide draft technical requirements to industry and involve industry in funded concept definition to support requirements definition
Provide clear “best value” definitions so that industry can propose and DoD can choose wisely

DoD is seeking comments from industry as they finalize BBP 3.0. A copy of Undersecretary Kendall’s presentation slides on the topic can be found here.

Congress Questions GSA on AbilityOne

This week 50 legislators sent a letter to GSA with questions regarding the agency’s compliance with the Javits-Wagner-O’Day (JWOD) Act, which requires Federal agencies to purchase specific products and services through the AbilityOne program. AbilityOne offers stable employment for nearly 50,000 Americans who are blind or who have other significant disabilities. The questions that GSA received from the Hill are:

What has been the performance of GSA commercial contractors with regard to maintaining the AbilityOne mandatory status? How has GSA managed non-compliant contractors?
What mark-up does GSA apply to AbilityOne products sold through GSA Global Supply?
What specific policies will GSA follow to ensure that commercial contractors comply with the mandatory requirements of the AbilityOne program?

Concerns about compliance with the JWOD Act have surfaced as a result of GSA’s Supply Transformation. GSA is closing its warehouse distribution centers in NJ and CA and transitioning to a model in which contractors ship direct. According to GSA, “during the current transition, and after the complete implementation of the Federal Strategic Sourcing Initiative (FSSI), all vendors must be authorized AbilityOne distributors before they can be considered as vendor partners for GSA Global Supply.” In a recent GSA blog post, the agency also stated that “for all vendor partners, new or old, GSA spot checks for compliance with rules regarding “Essentially the Same” (ETS) compliance…GSA works closely with AbilityOne to identify ETS items, to communicate to vendors which product offerings are valid, and verifies compliance with random checks.”

Join OPM and GSA on HR Strategic Sourcing Contract, Oct 2

The Coalition’s HR Services and Training (HRST) Working Group will meet with representatives from GSA and the Office of Personnel Management (OPM) on the Training and Management Assistance (TMA) follow-on contract on Thursday, October 2 at 10am. The TMA program, currently managed through OPM, offers customized training and human capital solutions through a five-year multiple award Indefinite Delivery/Indefinite Quantity contract vehicle. Special guests from GSA and OPM will discuss the acquisition strategy for the TMA follow-on contract thus far and next steps. Joining the discussion will be—

George Price, Deputy Associate Director, Training and Management Assistance Program, OPM
Richard Vinnacombe, Branch Chief, Human Resources Solutions at U.S. Office of Personnel Management
Jim Ghiloni, Acting Director of the Office of Acquisition Operations, GSA
Bjorn Miller, Contracting Officer, GSA

The meeting will be at Mayer Brown (1999 K St NW, Washington, DC 20006). To join the working group and attend the meeting, please contact Aubrey Woolley at awoolley@thecgp.org.

Join the Alliant 2 Working Group

As a follow-up to the recent GWAC/MAC Committee meeting hosting the GSA Alliant 2 team, t he Coalition is pleased to announce the formation of an Alliant 2 Working Group. The purpose of the working group is to provide feedback to GSA concerning the acquisition strategy for the upcoming Alliant 2 contract vehicle.

If you would like to join the working group, please email rdicharry@thecgp.org with your name, title and company.

GAO: More Cloud Savings Available

In a report this week, the Government Accountability Office (GAO) noted that despite agencies’ efforts to implement cloud computing services since 2012, more should be done to achieve savings. The total number of cloud computing services implemented by seven agencies increased by 80 services, from 21 to 101. Additionally, the seven agencies covered in the report increased spending on cloud services by $222 million, from $307 million to $529 million. Further, the agencies increased the percentage of their information technology (IT) budgets allocated to cloud services. However, despite the progress in adopting cloud technologies, the overall increase in budget allocation over the last two years was just 1 percent (table below).

GAO notes that agencies’ had not considered cloud computing services for about 67 percent of their investments. The report maintains that the agencies had only planned to consider cloud options for legacy investments when they were to be modernized or replaced. Consistent with the Office of Management and Budget’s (OMB) cloud first policy, GAO recommends that agencies assess IT investments that have yet to be evaluated for suitability for cloud computing services. Six of the seven agencies concurred with the recommendations.

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.

35^th Anniversary Sponsorships Available

Sponsorships are now available for our 35^th Anniversary Gala & Excellence in Partnership Awards, along with our 2014 Fall Training Conference. This two day event will be taking place on November 5^th – 6^th at the Ronald Reagan Building and JW Marriott.

Want to make sure your organization doesn’t miss out? Check out the list of numerous sponsorship opportunities for these two events here. We are counting on your support!

GSA Reviews New LEED for Federal Buildings

This week the General Services Administration (GSA) released its review of the latest Leadership in Energy and Environmental Design (LEED) standard for green buildings. LEED v4 was published by the U.S. Green Building Council in November 2013. The purpose of GSA’s review was to assess how well LEED v4 aligns with Federal requirements for public buildings. The following chart provides a summary of the results:

GSA’s review of LEED v4 is just one part of the process of determining whether the agency will recommend the standard for use by the Federal government. As a next step, GSA will convene an interagency discussion group to examine LEED v4 further and then publish the group’s findings in the Federal Register. The public will have the opportunity to submit comments on the government’s findings. GSA plans to have a public listening session during the 30 day comment period. To access GSA’s LEED v4 review, visit www.gsa.gov/portal/content/131983?utm_source=OGP&utm_medium=print-radio&utm_term=gbcertificationreview&utm_campaign=shortcuts.

GAO Reviews DHS Headquarters Consolidation

In a new report, the Government Accountability Office (GAO) has called for improved management of the Department of Homeland Security (DHS) headquarters consolidation project at St. Elizabeth’s Campus in Washington, D.C. Specifically, the GAO found that planning for the project does not fully conform to leading capital decision-making practices intended to help agencies effectively plan and procure assets. Project plans have not been updated to incorporate new agency policies concerning workspace and leasing options since 2009. Additionally, despite a funding gap larger than $1.6 billion from FY09-FY14 and delayed scheduled completion by over 10 years from 2015 to 2026, GSA and DHS have yet to conduct a comprehensive assessment of the project. GAO notes that the assessment should include current needs, capability gaps, and evaluated and prioritized alternatives to help DHS and GSA adapt consolidation plans to changing conditions. Further, DHS and GSA did not follow relevant guidance and best practices on cost and schedule estimates for the St. Elizabeth’s project.

GAO recommends that DHS and GSA develop revised DHS headquarters plans that reflect best practices for capital decision-making and reliable cost and schedule estimates. GAO also noted that Congress should consider making future funding for the project contingent upon DHS and GSA following through on recommendations. DHS and GSA concurred with GAO’s recommendations.

Senate Passes Data Center Bill

The Senate recently passed the Federal Data Center Consolidation Act (S. 1611), first introduced by Senators Michael Bennet (D-CO), Tom Coburn (R-OK), and Kelly Ayotte (R-NH). The legislation aims to expedite the consolidation of federal data centers, setting hard deadlines and requiring federal agencies to conduct inventories and implement consolidation strategies. Additionally, it requires the Government Accountability Office (GAO) to verify agency data center inventories, and directs the Office of Management and Budget (OMB) to routinely report to Congress on cost savings. The bill supports the Administration’s Federal Data Center Consolidation Initiative (FDCCI), which could save up to $3 billion by 2015. The bill will now be considered by the House committees on Oversight and Government Reform as well as Armed Services.

Senate Approves Bill on Contractor Conflicts of Interest

This week, the Senate approved legislation that would bar contractors that conduct Federal background investigations from performing a final review of their own work. The Preventing Conflicts of Interest with Contractors Act blocks the Office of Personnel Management (OPM) from contracting with companies to perform final quality reviews if those same companies are also responsible for conducting initial investigations.

Defense Department Guidebook on e-Business

This week, the Department of Defense (DoD) released the Contingency Business Environment (CBE) Guidebook. The purpose of the guidebook is to establish and manage a contingency e-business program for acquisition purposes and to provide DoD personnel guidance to effectively employ e-business tools in contingency environments.

False Claims Act Webinar with Steptoe & Johnson – Oct 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