Friday Flash 09/23/22

Calling All IT Contractors – Register for The IT Category: Creating Opportunities for Small Business

IT contracting community, don’t miss out on the opportunity to learn about the latest crucial developments related to programs and policies impacting small businesses within the federal IT market! On October 6, the Coalition is hosting a new forum in conjunction with GSA, The IT Category: Creating Opportunities for Small Business. Hear from IT program managers from multiple federal agencies, as well as recognized industry experts in matters shaping small business procurement.

We are pleased to share that our government participants include Laura Stanton, Governmentwide IT Category Manager and Assistant Commissioner of GSA’s IT Category; Jim Ghiloni, Group Manager, IDIQ Labs/Innovation Sector, GSA; Joanne Woytek, SEWP Program Director, NASA; Ricky Clark, Deputy Director, NITAAC; and Cheryl Thornton-Cameron, Executive Director, Office of Acquisition Operations, GSA.

We are also fortunate to be joined by four industry acquisition experts, who will share their knowledge on the legal and policy regulations affecting small business procurement. These accomplished experts include Ken Dodds, Government Contracting Industry Expert, Live Oak Bank; David Black, Partner, Holland & Knight; Jon Williams, Partner, PilieroMazza; and John Shoraka, Co-Founder and Managing Director, GovContractPros.

During the event, attendees will have the opportunity to learn about:

  • The customer base and utilization for contract programs
  • GSA’s efforts to support small businesses within the IT market from the perspective of the Assistant Commissioner of the IT Category
  • The latest updates on the NASA SEWP VI program
  • Developments on GSA’s family of small business Governmentwide Acquisition Contracts (GWACs)
  • Updates on to the CIO-SP contracting program
  • GSA’s Office of IT Category’s strategy to create opportunities for small businesses
  • Opportunities for small business IT contractors through the Multiple Award Schedule (MAS) program
  • How the Assisted Acquisition Services (AAS) are supporting small businesses
  • Key policies and legal issues affecting IT small businesses

This event is complimentary for all attendees. Both Coalition members and non-members are welcome to join the forum. In-person and virtual attendance will be offered to registrants. Registration is available HERE!

The full agenda, along with speaker bios, can be found below.

The IT Category: Creating Opportunities for Small Business

Location: Holland & Knight – 1650 Tysons Blvd., 16th Floor, Tysons, VA 22102
8:00-9:00 am: Registration Opens, Networking

9:00-9:20 am: Opening Remarks
Laura Stanton, Governmentwide IT Category Manager, Assistant Commissioner, Information Technology Category, GSA

5 Min Break

9:25-10:30 am: Governmentwide Contracting Opportunities through NASA, NIH and GSA
Jim Ghiloni, Group Manager, IDIQ Labs/Innovation Sector, GSA
Joanne Woytek, SEWP Program Director, NASA
Ricky Clark, Deputy Director, NITAAC
Cheryl Thornton-Cameron, Executive Director, Office of Acquisition Operations, GSA

10:30: Break

10:45-11:45 am: Small Business Policy and Legal Update
John Shoraka, Co-Founder and Managing Director, GovContractPros
David Black, Partner, Holland & Knight
Ken Dodds, Government Contracting Industry Expert, Live Oak Bank
Jon Williams, Partner, PilieroMazza

Registration Now Open for 2022 Fall Training Conference!

The Coalition is pleased to announce that registration for the 2022 Fall Training Conference – Expectations for Government Fiscal Year 2023, is now open. The conference will be held on November 16-17 at the Fairview Park Marriott in Falls Church, VA, with both in-person and virtual attendance options available for participants. The overarching theme of this year’s conference is the expectations for Federal procurement policies and programs across the government in the new fiscal year. We are excited to confirm that day one of the conference, which includes a governmentwide focus, will kick off with a keynote address from Former Congressman and current Holland & Knight Partner Tom Davis. During his keynote remarks, Davis will dive deep into the election results, detailing what happened and what these results mean for the Federal government. GSA Administrator Robin Carnahan has been invited to provide the second keynote address of the day, where she will share her expectations and initiatives for the agency in fiscal year 2023. We are working diligently with GSA and other agencies to deliver the most valuable agenda for our members, with panels covering a range of topics including expectations for the Schedule program, acquisition system updates, and the latest developments on contract vehicles such as SEWP, OASIS+, Alliant, and CIO-SP. Day one of the conference features representation from DoD, DHS, DLA, GSA, NASA, NIH, SBA, and the VA. Be on the lookout for the full agenda next week!

The second day will follow the same format, but will specifically focus on healthcare procurement by the VA, DLA, DHA, and HHS. We have invited Michael Parrish, VA Principal Executive and Chief Acquisition Officer, to deliver the keynote address focused on his priorities for the VA’s acquisition policies and programs in the new fiscal year. Moshe Schwartz, President of Etherton and Associates, has been invited to give the second keynote address of the day.

Sessions throughout the day will highlight expectations for DHA, DLA, and VA policy, the medical supply chain, pharmaceutical programs, Medical Surgical Prime Vendor (MSPV) programs, and more. The full agenda for the second day can be viewed here.

Both days will end with an in-person networking reception for panelists and attendees to allow participants to connect with one another and continue their discussions.

To register for the Fall Training Conference, click here. For questions about the Conference or sponsorship opportunities, please email Matt Cahill, Vice President of Membership & Marketing, at mcahill@thecgp.org. We are excited to share more developments on the conference in the coming weeks, and look forward to seeing you in November.

Register Now – Navigating the Entity Validation Process in SAM.gov

Want to learn more about the steps of the entity validation process in SAM.gov? Join the Coalition on September 29 for an hour-long webinar from 12:00 – 1:00 pm EDT with the General Services Administration’s Katherine Rollins, Lead Program Manager for SAM.gov.

During the webinar, Rollins will provide high-level training on how best to validate an entity in SAM.gov as well as answer questions on the validation process itself. Entity validation plays a key role in preventing procurement fraud and upholding the integrity of federal contracting processes. This training will equip the contracting community with useful tips and the latest information to successfully complete the SAM.gov entity registration.

If you have any questions on the entity validation process you would like addressed during the webinar, please send them in advance to Michael Hanafin at mhanafin@thecgp.org.

Registration is complimentary for all members and non-members. To register, please click here. For all questions or concerns related to registration, contact Ian Bell at ibell@thecgp.org.

Please Respond to the Coalition’s Survey on TDR

As the Coalition prepares to submit comments to GSA in response to its Request for Information (RFI) about Transactional Data Reporting (TDR), we are conducting a survey to learn more about our members’ experiences with TDR. The RFI seeks to understand the burden of collecting TDR data, the validity and usefulness of the data, and how data collection can be improved. This survey is primarily for companies that currently participate in TDR or previously participated. The deadline to respond to the survey is October 3, 2022.

To take the survey, please click here. Please direct all questions about this survey to Ian Bell at ibell@thecgp.org. If you would like to speak to a member of our staff about TDR in more detail, please reach out to jsnyderwine@thecgp.org.

House Committee on Veterans Affairs Holds Hearing on VA Acquisitions and Modernization, Asks Hard Questions

On Tuesday, the House Committee on Veterans Affairs held a hearing where VA officials “acknowledged repeated, major failures surrounding the agency’s acquisition programs and modernization objectives,” reports FCW. Michael Parrish, the Principal Executive Director for the VA’s Office of Acquisition, Logistics, and Construction, provided the main portion of the testimony; two other top acquisitions officials from the VA and Shelby Oakley, the Government Accountability Office’s (GAO) Director of Contracting and National Security Acquisitions, joined him. Lawmakers asked the panelists questions about multiple recent issues in VA acquisitions, including the cost and performance concerns associated with the new Electronic Healthcare Records (EHR) system, behind-schedule supply chain modernization efforts, and the general state of VA’s acquisition oversight system.

In response, Parrish stated that the VA was in the pre-solicitation phase of its supply chain effort and emphasized the “jointness and transparency” of the EHR process under Secretary McDonough. He also responded to specific concerns about the fiscal penalties imposed on contracts for poor EHR performance, agreeing that the EHR’s problems would not be tolerated in the corporate world, and that the VA was considering renegotiating the current service level agreement. Ms. Oakley added that, from GAO’s perspective, the VA’s acquisition management is headed “in the right direction,” but she cautioned that there were serious issues recently reported, such as the VA’s inability to provide a complete list of its own acquisition programs.

Coalition Seeks Member Feedback on Inflation and EPAs Regarding the VHA

The Veterans Health Administration (VHA) is interested in member feedback on the impact of inflation on the VA’s Medical/Surgical Supply Blanket Purchase Agreements (BPAs). If you are a current vendor on the VA Medical/Surgical Supply BPA and experiencing negative impacts because of inflation, please email Aubrey Woolley at awoolley@thecgp.org.

The Coalition is also interested in member feedback from VA Federal Supply Schedule (FSS) contractors that are experiencing increased costs and challenges with the processing of Economic Price Adjustments (EPAs). Again, please contact Aubrey Woolley to share your input.

Senator Manchin Releases Permitting Proposal as Continuing Resolution Deadline Looms

Efforts to pass a Continuing Resolution (CR) have been complicated by Senator Joe Manchin’s (D-WV) release of a legislative proposal to streamline the permit process for pipelines. The substance of the legislation was agreed to as part of negotiations over the Inflation Reduction Act, and it would expedite the review and challenge process for new infrastructure. Roll Call reports that a contingent of Democrats has opposed the measure, with several senators advocating for the issue to be separated from the CR. According to FCW, it is expected that the CR negotiations will not be resolved until the final days before the September 30 deadline. Further complicating matters is the fact that a recess for the Yom Kippur holiday will begin shortly after the deadline, which could cause complications in the event of a shutdown.

DARPA Creating New Program for Small Businesses

The Defense Advanced Research Projects Agency (DARPA) is rolling out a new program, BRIDGES, to help small businesses work in classified areas, reports Federal News Network. DARPA created the program in order to help a large portion of the innovation base that currently cannot participate in classified opportunities because they lack the requisite clearances. “They’re new startups, really passionate folks, but they’re not DoD companies. And the challenge is I can’t even express to them what our real problem is so that they can go think about it, because it’s classified,” Greg Kuperman, the DARPA Program Manager leading the effort, said in an interview. “We’ve been kind of dancing around this for over a year, and finally I said there’s got to be a better way.” The program will have DARPA sponsor the Defense Counterintelligence and Security Agency’s facility security clearances for the companies, thereby significantly expediting the clearance process. The agency will issue a draft solicitation soon to gather industry feedback on the plans.

GSA Releases Polaris Solicitations for SDVOSB and HUBZone Small Businesses

FCW reported that GSA has released the final two solicitations for its Polaris contract, an IT solutions contract that will focus on emerging technologies and increasing opportunities for small and disadvantaged businesses in Federal procurement. The solicitation states that Service-Disabled Veteran-Owned Small Businesses (SDVOSB) and Historically Underutilized Business Zone (HUBZone) small businesses must submit their proposals by November 4, 4 p.m. EDT. SDVOSB and HUBZone small businesses have until October 5 to submit questions to GSA. The bid submission date for woman-owned and general small businesses is September 23.

GSA also plans to include on-ramps to give organizations the chance to be selected for the contract at a later date, as well as a technical refresh clause that can be utilized as customer requirements and technologies evolve. Exodie Roe, Associate Administrator for GSA’s Office of Small and Disadvantaged Business Utilization, said that “Polaris will help GSA meet its small business goals and bring innovation to the small business community, Federal agencies, and the acquisition workforce.” Federal Acquisition Service Commissioner Sonny Hashmi added that “GSA places a high level of importance on supporting small and disadvantaged IT service providers as they form relationships and do business with the Federal government.”

Legal Corner

Just When You Thought It Was Safe To Go Back In The Water . . . The 11th Circuit Revives Executive Order 14042

By Jonathan Aronie & Ryan Roberts; Sheppard Mullin

With apologies to Jaws II, just when you thought it was safe, the U.S. Court of Appeals for the 11th Circuit has released a shark back into the EO 14042 waters.

On Friday, August 26, the 11th Circuit published a 66-page decision affirming the injunction against the Federal Government’s Code-19 Vaccine Mandate issued by the U.S. District Court for the Southern District of Georgia, but limiting the previous nationwide scope of the injunction. To quote the decision:

“We agree that the plaintiffs’ challenge to the mandate will likely succeed and that they are entitled to preliminary relief. Even so, because the injunction’s nationwide scope is too broad, we vacate it in part.”

What this means is that the 11th Circuit injunction, which previously applied to every contractor everywhere across the U.S., now applies only to the plaintiffs in this particular case: Seven states and the members of one industry association (Associated Builders and Contractors). Putting it in the affirmative, EO 14042 may be back in play for Federal contractors that, until last week, likely believed compliance with the federal vaccine mandate was behind them.

We should note at the outset, though, that following the issuance of the 11th Circuit’s opinion, the Office of Management and Budget announced its view that the injunction was still in place. As reported by Government Executive Magazine, OMB said

“At this time, the nationwide injunction remains in effect, and thus agencies should continue not to take any steps to enforce Executive Order 14042.”

As a factual matter, OMB is wrong. The nationwide injunction does not remain in effect. We assume what OMB meant to say is that the Administration will continue voluntarily not to enforce the Executive Order for the time being. This should come as some comfort to contractors trying to navigate the new enforceability map, which we affectionately call the SheppardTracker (see below). But unlike an injunction, a voluntary non-enforcement decision can disappear overnight.

In any event, now that the 11th Circuit has narrowed the scope of the District Court’s injunction, let’s discuss the question you all are asking: What does the decision mean to me?

The Current State Of 14042 Vaccine Mandate (Notwithstanding OMB’s Non-Enforcement Statement)

Most importantly, EO 14042 no longer is enjoined nationwide. In other words, the Federal Government could begin enforcing EO 14042 (via FAR 52.223-99 and agency deviations) in more than half of the United States (35 states to be exact). As a refresher, FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors is a clause developed by the FAR Council to support agencies in meeting the applicability requirements and deadlines set forth in EO 14042.

In the absence of a nationwide injunction, the scope of each individual district court injunction once again has become relevant. Here’s a high-level summary of the existing injunctions.

  • Georgia Injunction (clarified by 11th Circuit Decision): The injunction now applies only to the state plaintiffs acting as contractors, and, therefore, has no impact on private companies. Accordingly, the Federal Government now is permitted to enforce FAR 52.223-99 against Federal contractors in Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia (the plaintiff states). (See blue states on the map below.)
  • Kentucky Injunction (appeal pending in the 5th Circuit): The Federal Government is enjoined from enforcing FAR 52.223-99 “in all covered contracts in Kentucky, Ohio, and Tennessee.” (See red states on the map below.)
  • Florida Injunction (appeal pending in the 11th Circuit): For now, the Federal Government is enjoined from enforcing FAR 52.223-99 “within Florida.” However, given the 11th Circuit’s decision on the Georgia injunction, we suspect this injunction, too, will be narrowed, to permit the Federal Government to enforce FAR 52.223-99 against Federal contractors in Florida. (See red states on the map below.)
  • Missouri Injunction (appeal pending in the 8th Circuit): The Federal Government is enjoined from enforcing FAR 52.223-99 “for federal contractors and subcontractors in all covered contracts in Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming.” (See red states on the map below.)
  • Louisiana Injunction (appeal pending in the 5th Circuit): The injunction applies only to the state entities acting as contractors, and therefore has no impact on private companies. The Federal Government is permitted to enforce FAR 52.223-99 against Federal contractors in Louisiana, Mississippi, and Indiana. (See green states on the map below.)

We also have updated our SheppardTracker to reflect what we believe to be the current state of play:

In short, the Federal Government may choose to begin enforcement of FAR 52.223-99 against contractors performing in the 35 states NOT shaded red.

Also, do not forget, at least one state has passed anti-vaccination-mandate legislation the enforceability of which hinges to some extent on the viability of the various federal injunctions. With the nationwide injunction no longer in place, the Preemption Doctrine could dictate that EO 14042 overrides contradictory state law.

Whether the Federal Government chooses to resume incorporating FAR 52.223-99 into contracts, or begins enforcing its requirements, however, is yet to be determined; although OMB’s recent statement to Government Executive Magazine provides at least some clue to this mystery in the short term. We suspect the Task Force will publish updated guidance shortly detailing the path forward. The Biden Administration has rolled back many COVID-19 initiatives and restrictions in recent months, and, therefore, its appetite to restart enforcement of EO 14042 is an open question. Time will tell.
In the meantime, there are additional threats circling in the 14042 waters. For instance, other district courts still have not ruled on the Motions for a Preliminary Injunction originally filed in their jurisdictions back in 2021 (e.g., the judge in the Southern District of Texas stayed litigation there once the nationwide injunction was issued by the Southern District of Georgia). Additionally, the other Circuits with appeals pending could overturn the preliminary injunctions previously granted by the lower courts (or severely limit their scope, as the 11th Circuit did), which would add to the 35 states in which the Federal Government could enforce EO 14042. We’ll continue tracking the various pieces of litigation and alert you of any notable developments.

While we eagerly await updated Task Force Guidance, for now, it seems many Federal contractors may be back to having to comply with the requirements of EO 14042 to some extent. Accordingly, everyone should keep a close eye on the Task Force website, the OMB website, the GSA 14042 page, and the specific terms of your solicitations and contracts.

Finally, we would be remiss if we did not point out two confusing points in the 11th Circuit’s decision:

  • Who Are The Plaintiffs? According to the 11th Circuit, the injunction now is limited to “the seven plaintiff States and their agencies” (and members of the plaintiff industry association). This language is not a model of clarity regarding whether the Court is referring to the States themselves (e., situations in which the state is a federal contractor) or whether the Court is referring to all contractors within those states. While the Court’s explicit language seems to limit the injunction to the state agencies only – and that’s how we read it – the fact that several of the states brought the suit on behalf of their citizens (and presumably their contractors) could mean that those citizens and contractors could be considered plaintiffs. As we said, we think the better reading is that the injunction applies to the states as contractors only (and not all contractors in those states), but we have to acknowledge the possibility of a contrary interpretation.
  • How Does It Apply To Solicitations? The decision includes an interesting statement about the Federal Government including FAR 52.223-99 in solicitations. The 11th Circuit stated: “we leave the injunction in place to the extent that it bars federal agencies from considering the enforceability of the mandate when deciding who should receive a contract, if any plaintiff belongs to the pool of bidders.” Unless every Federal contractor in the United States becomes a member of the Associated Builders and Contractors overnight, this exception appears to be very limited in scope, but the Task Force’s interpretation here will be key. More on this topic below.

Now, let’s take a deeper dive into the 11th Circuit’s decision.

Georgia v. Biden In Greater Detail

Let’s begin with a bit of history.

On December 7, 2021, the U.S. District Court for the Southern District of Georgia enjoined enforcement of EO 14042 nationwide (discussed previously here). This decision resulted a complaint by the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia. The Court permitted the Associated Builders and Contractors, Inc. (ABC), a nationwide trade association, to intervene as a plaintiff. ABC’s intervention proved to be of particular importance because the Court relied on ABC’s national membership as the basis for applying its injunction nationwide.

District Court Judge Baker’s decision focused on preserving the rule of law and ensuring “all branches of the government act within the bounds of their constitutionally granted authorities,” even in times of crisis. In order to do so here, Judge Baker determined that granting plaintiffs motion for a preliminary injunction was necessary. After determining that the plaintiff States and ABC all had standing to challenge EO 14042, Judge Baker focused his decision on the likelihood of success on the merits prong of the injunctive relief standard. Judge Baker noted that plaintiffs “need only show a substantial likelihood of success on the merits on one claim” (emphasis added), and went on to examine the plaintiffs’ contention that EO 14042 exceed the authority granted to the President by the Procurement Act (40 U.S.C. § 101, the Federal Property and Administrative Services Act).

According to Judge Baker, the question before the Court was whether Congress “clearly” authorized the President to use the Procurement Act to issue the directives contained in EO 14042. Judge Baker answered that question in the negative, finding the actual purpose of the EO to be the “regulation of public health.” As explained by Judge Baker, the purpose of the Procurement Act is to promote economy and efficiency in the federal procurement process. Although the Procurement Act affords the President significant deference to achieve this goal, Judge Baker found there was an insufficient nexus between the Procurement Act and EO 14042 and concluded that the Procurement Act “did not clearly authorize the President to issue the kind of mandate contained in EO 14042, as EO 14042 goes far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting, and instead, in application, works as a regulation of public health, which is not clearly authorized under the Procurement Act.” Because substantial likelihood of success on a single claim was enough, according to Judge Baker, the Court did not examine the other challenges raised by the plaintiffs, such as arguments centered on the Administrative Procedure Act and the Non-Delegation Doctrine.

Regarding the remaining prongs of the injunctive relief standard, Judge Baker found that plaintiffs likely were to be irreparably harmed if the EO was permitted to remain in force and found the balance of harms favored plaintiffs. As such, Judge Baker granted injunctive relief in favor of plaintiffs and ordered the United States enjoined “during the pendency of this action or until further order of this Court, from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in any state or territory of the United States of America.”

The Court’s decision subsequently was appealed to the 11th Circuit. During the pendency of the appeal, the United States Government moved the district court to clarify whether the injunction applied to the entire EO or just the vaccine mandate. The Court clarified that its injunction was intended to enjoin only the vaccine mandate, meaning it did not enjoin the masking or physical distancing requirements of EO 14042 (discussed previously here).

The Court of Appeals Decision

The three-judge 11th Circuit Panel began its analysis by identifying the two questions before it:

  • First, whether the challenge to the vaccine mandate is likely to succeed.
  • Second, whether the scope of the district court’s injunction was too broad, which would suggest an abuse of discretion by the lower court.

Notably, the language of the 11th Circuit’s decision strongly suggests the Court is considering only the vaccine mandate, and not the entirety of EO 14042.

Likelihood of Success

The core question before the Court, in its view at least, was whether Congress, in vesting the President with broad procurement powers under the Procurement Act, authorized the President to improve efficiency through a vaccine mandate. Put another way, did Congress delegate to the President “the power to require widespread vaccination through the Procurement Act.” As the Court put it, “the question is not whether Congress could authorize the President to make procurement agreements continent on COVID-19 vaccination. It is whether Congress did so in the Procurement Act.”

While acknowledging that the Procurement Act confers broad authority on the President, the Court – like the District Court below it – emphasized that the Procurement Act’s delegation to the President is not unlimited. “The Act confers broad but not unbounded authority.”

Limiting its analysis to the Procurement Act (as apparently the Federal Government’s lawyers did before the Court), the Court noted that “the President cannot issue policies that require [federal officials] to take steps outside the Act or contrary to the Act – however useful such steps may appear.” Citing Supreme Court precedent, the Court emphasized that the Procurement Act empowers “the President to carry out the Act’s specific provisions – but not more.” In a more poetic moment, the Court put it this way: The Procurement Act “is not an ‘open book’ to which contracting agencies may ‘add pages and change the plot line.’”

In the end, the 11th Circuit agreed with the District Court that nothing in the Procurement Act confers upon the President the power to mandate vaccines for all federal contractors: “Nothing in the Act contemplates that every executive agency can base every procurement decision on the health of the contracting workforce.” The Court emphasized that the power to create and maintain an “economical and efficient” procurement system is “worlds away” from establishing health standards for all contractors’ employees. “No statutory provision contemplates the power to implement an across-the-board vaccination mandate. It follows that the President likely exceeded his authority under the Procurement Act when directing executive agencies to enforce such a mandate.”

The Court founded its view upon a well-settled principle of statutory interpretation: Congress is expected to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” In other words, if Congress had wanted to give the President the power to use its procurement powers to set health policy, Congress would have said so.

Interestingly, reading between the lines, the Court implied that a given Agency could employ a vaccine mandate if it had a compelling reason to do so. “We cannot say that when Congress passed the Procurement Act, it meant to delegate authority to set baseline health and safety qualifications for contractors – standards that would apply regardless of the specific needs in a given project.”

Scope of Injunction

After concluding that the Administration likely would lose its case against the seven plaintiff states (and trade association), the Court set about evaluating the scope of the District Court’s injunction. Remember, the District Court enjoined enforcement of the vaccine mandate “against any contractor, anywhere in the United States, plaintiff or not.” The 11th Circuit began its analysis by commenting “we are both weary and wary of this drastic form of relief.”

The Court then undertook a cogent discussion of the advantages of differences of opinion coming from the various lower courts and the dangers of judicial overstepping that puts those advantages at risk. The Federal court system was designed to “allow courts to reach multiple answers to the same legal questions,” wrote the Court. A nationwide injunction, the Court continued, “gives a single district court an outsized role in the federal system.” “By cutting off parallel lawsuits, nationwide injunctions frustrate foundational principles of the federal court system.”

Against this background, the 11th Circuit found the lower court’s injunction “overbroad.” Accordingly, the Court vacated the lower’s courts injunction “to the extent that it bars enforcement of the mandate against nonparty contractors through new and existing contracts.” In contrast, the Court affirmed the injunction to the extent it “blocks federal agencies from enforcing the mandate in contracts with any plaintiff State or member of the plaintiff trade association.” “As a result,” wrote the Court, “plaintiffs need not comply with the vaccination requirement in their capacity as contractors, and they are not responsible for including that requirement in lower-tier subcontracts.”

One Complicating Factor

While the Court clearly was bothered by the nationwide scope of the injunction, it recognized a complication regarding solicitations. “Unlike procurement contracts, solicitations are generally issued by the federal government to many bidders, who are then expected to comply with the solicitation’s terms to remain eligible for the contract award.” Because a plaintiff could be prejudiced by an agency’s consideration of who is subject to the mandate and who is not, the Court decided to leave “the injunction in place to the extent that it bars federal agencies from considering the enforceability of the mandate when deciding who should receive a contract, if any plaintiff belongs to the pool of bidders.”

This carve-out presents quite a logistical hurdle for procuring agencies that now will have to change the rules of their procurements based upon who is bidding on those procurements. Although unlikely, perhaps we’ll see bidders convincing members of the plaintiff industry association to submit bids simply to knock the EO 14042 provisions out of the solicitation. . . . unlikely, but interesting to think about.

Conclusion

As we continue to monitor how the Administration and Task Force decide to proceed in light of the 11th Circuit’s decision, it likely makes sense to dust off your preexisting EO 14042 compliance plans. Our existing resources are linked below.

Resources

About The Authors

Jonathan and Ryan are Governmental Practice partners in Sheppard Mullin’s DC office. Jonathan leads the firm’s Governmental Practice and co-founded the firm’s Organizational Integrity Group. Ryan leads the Governmental Practice’s Commercial Products & Services Team and the Group’s EO 14042 Task Force. Jonathan can be reached at jaronie@sheppardmullin.com. Ryan can be reached at reroberts@sheppardmullin.com.

Important Note

This blog is provided for information purposes only and does not constitute legal advice and is not intended to form an attorney client relationship. As you are aware, things are changing quickly. This blog does not reflect an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand. This blog does not address the potential impacts of the numerous other local, state, and federal orders that have been issued in response to the Covid-19 pandemic, including, without limitation, potential liability should an employee become ill, requirements regarding family leave, sick pay, and other issues.

Healthcare Corner

GAO Issues Latest Report on VA Acquisition

On September 20, GAO published a report on the VA’s major acquisitions and management challenges. In 2019, GAO placed the VA’s acquisition management on its High-Risk List after the VA faced multiple challenges in efficiently purchasing goods and services, such as medical supplies. GAO found that the VA has not used its current framework for managing the purchases of goods and services for major acquisitions. The management framework was implemented in 2017 and includes features, such as phases, key documents, and decision authorities, that could help provide a standardized management and oversight approach for the department’s major acquisitions.

GAO found that most of the major acquisition programs that were reviewed used program-specific approaches that varied from one another. The variations create challenges for the VA in providing standardized oversight and consistently identifying “opportunities to improve acquisition outcomes.” Specifically, the VA has not addressed critical testing issues or developed performance metrics for the Electronic Health Records Modernization program. Additionally, the VA has not selected the approach the Department will take in implementing the Medical Surgical Prime Vendor program.

The VA plans to implement a new acquisition framework similar to the current one. GAO, however, found that the VA may face difficulties in implementing the new framework due to existing challenges that the Department has not yet addressed. These challenges include identifying which acquisition programs will need increased oversight. GAO noted that if the VA addresses these challenges, then they will likely see greater improvements in the management of their acquisition systems. GAO noted that the VA has made some progress in addressing challenges, such as updating their acquisition regulations and developing a high-risk corrective action plan. The VA, however, still needs to develop a plan for monitoring and showing progress in addressing the long-standing challenges.

GAO also identified certain issues within the VA’s acquisition workforce as high-risk, such as lack of training and workload challenges for contracting officers. The VA has acknowledged these challenges in its own high-risk corrective plan. GAO found that the VA does not have the comprehensive data available to track the characteristics of its acquisition workforce accurately, and that the VA did not have clear documentation of roles and responsibilities for some leadership positions. GAO is continuing to monitor these challenges and will issue another report this fall.

A View From Main Street
This week’s A View From Main Street features guest author Ken Dodds of Live Oak Bank. The comments herein do not necessarily reflect the views of The Coalition for Government Procurement.
SBA’s Potpourri Proposed Rule

On September 9, 2022, SBA issued a proposed rule titled “Ownership and Control and Contractual Assistance Requirements for the 8(a) Business Development Program.” 87 FR 55642. The proposed rule addresses many issues beyond the 8(a) program. The comment period closes November 8, 2022. The final rule will probably be issued in the Spring of 2023.
With respect to joint ventures, the proposed rule spells out SBA’s long-standing policy that orders under IDIQ contracts do not violate its rule with respect to a joint venture’s ability to receive contract awards within a two-year period after the first contract award. Under SBA’s rules, a joint venture cannot be populated, but SBA is proposing to allow populated joint ventures for a set-aside if the partners are similarly situated and the parties collectively do not exceed the size standard. SBA is also proposing that for size purposes the receipts or employees of a populated joint venture must be distributed to the owners based on ownership percentage. SBA is requesting comment on whether a firm can be part of multiple joint venture offers for the same multiple award contract.

With respect to the ostensible subcontractor rule, where a proposed subcontractor is an ineligible incumbent, SBA is proposing to codify that an offeror’s reliance on the incumbent’s management and experience are factors that could lead to affiliation. SBA also proposes ostensible subcontractor reviews to determine whether an ineligible concern will perform the primary and vital requirements of a socioeconomic set-aside contract.

SBA proposes to clarify that recertification is required when there is sale of a portion of a firm that results in change of control or negative control. SBA proposes to clarify that a joint venture can recertify if both parties are small or the protégé is small, and that a joint venture’s recertification for an option period is not a contract award for purposes of the joint venture rule. SBA proposes that compliance with the limitations on subcontracting should apply at the order level where multiple agencies can award orders under the contract. SBA requests comment on whether non-compliance with the limitations on subcontracting should result in a negative past performance evaluation.

SBA proposes that for 8(a) sole source orders, a firm must be small at the time of the order.
SBA is proposing to allow entity-owned concerns to acquire graduated 8(a) concerns through the change of ownership process, instead of the waiver process. SBA has extended its moratorium on the bona fide office requirement for 8(a) construction contracts through September 30, 2023. Unfortunately, SBA proposes to continue to require a bona fide place of business for 8(a) sole source construction contracts, even though the procuring agency has the option of using another socioeconomic program or issuing the solicitation unrestricted if the proposed 8(a) contactor does not have a bona fide office. SBA proposes to address situations where an agency intends to award a follow-on to an 8(a) contract as an order under a multiple award 8(a) contract where the incumbent is not an awardee. SBA also proposes to harmonize procedures for 8(a) order set-asides under the Schedule. SBA requests comment on whether there should be a limitation on an agency’s ability to award a follow-on to a competitive 8(a) contract as a sole source 8(a) contract. SBA is requesting comment on whether a request for a waiver in connection with the sale of an 8(a) concern should be submitted to the head of the 8(a) program instead of the district office (Answer: Yes). SBA is requesting comment on entity-owned concern benefit reporting. SBA proposes to create an SDB status review process, even though SDB procurement mechanisms do not exist.

SBA is requesting comment on whether it should issue contract specific waivers of the nonmanufacturer rule for contracts that exceed five years, or whether it should require the agency to request a new waiver prior to the sixth year of a long-term contract. SBA proposes that a contract specific waiver of the nonmanufacturer rule will expire if the contract is not awarded within one year and to clarify that a waiver does not apply to follow-on contracts or modifications outside the scope of the contract.

Finally, SBA proposes to put into regulation its long-standing policy prohibiting an agency from issuing a set-aside requiring two or more socioeconomic categories, e.g., an 8(a)/HUBZone set-aside or an SDVO/WOSB set-aside.

GSA Announces Members of Acquisition Policy Federal Advisory Committee

Yesterday, GSA officially announced the establishment of the GSA Acquisition Policy Federal Advisory Committee (GAP FAC). Including representatives from Federal agencies, state and local governments, industry, associations and academia, the purpose of the GAP FAC is to advise the Federal government on how GSA can tackle Federal acquisition challenges. The initial focus of the GAP FAC will be on advising the GSA on climate and sustainability in Federal acquisition. A list of the GAP FAC’s members and its charter can be found here.

GAO Issues Report on DoD’s Awards of Other Transaction Agreements to Consortia, Provides Recommendations

GAO published a report Tuesday on the DoD’s Awards of Other Transaction Agreements (OTAs) to consortia and found that DoD is “missing opportunities” to improve future OTA awards. OTAs are a mechanism for DoD to write more flexible contracts exempt from the Federal Acquisition Regulations, generally for R&D purposes.

GAO found that, from FY2019 through FY2021, DoD awarded 24 billion dollars in OTAs (about two thirds of all OTA dollars) to consortia–groups of companies working in a specific area, such as healthcare or defense technology. Despite consortia making up the majority of OTA awards, DoD has no “systematic approach for tracking which consortia receive awards.” Coupled with a lack of information for contracting personnel about appropriately awarding OTAs to consortia, GAO concluded that, where OTAs are concerned, DoD is not doing enough either to “leverage the knowledge of its contracting personnel” or to provide insight to Congress and the public. GAO made six recommendations in the report’s conclusion designed to address the data-collection and knowledge-sharing aspects of its concerns, all of which were accepted by DoD.

OMB Releases First-Ever “Learning Agenda”

Under the past three presidential administrations, the Office of Management and Budget (OMB) has released government-wide management agendas. Now, for the first time, reports FCW, OMB has released a “Learning Agenda.” Intended “to address critical learning gaps” in the Federal government, the Learning Agenda provides questions for government agencies, industry, the nonprofit sector, and the broader public to answer. OMB plans to use these answers to strengthen the Federal workforce, improve customer experience, and help manage the business of government. The release of the Agenda complements the statutorily required learning agendas released by Federal agencies this spring, which ask similar questions at the agency level. OMB hopes to update the public on the results of the Agenda in Fiscal Year 2023.