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Centre Law & Consulting

Reproduced with permission from Federal Contracts Report, 105 FCR (May 11, 2016). Copyright 2016 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com

GSA Sends Warning Letters to Contractors Over Origins of Products

The General Services Administration (GSA) is clamping down on thousands of federal contractors to ensure that products sold to government agencies are made in the U.S. or are otherwise in compliance with the Trade Agreement Act (TAA), Bloombery BNA has learned.

Regional GSA offices in Fort Worth, Texas, and Kansas City, Missouri, emailed letters dated May 5 to more than 2,800 schedule contract holders that directed vendors to “review their total offering of product” by submitting a spreadsheet that verified the countries of origin of each schedule contract product, as well as copies of a Certificate of Origin or other certification from the manufacturer on its letterhead for products made in the U.S. or in a TAA-designated country.

“The continued reoccurrence of non-compliant product threatens the integrity of the [Multiple Aware Schedule] contracts and GSA Advantage! website which federal customers rely on to make daily purchases that are compliant with the Federal Acquisition Regular (FAR),” the GSA letter said. “This threat cannot be tolerated for the good for the federal procurement community, MAS business line, and continued success of a primary system you rely on to serve federal customers.”

The letter provided to Bloomberg BNA was unsigned but included the name of a Fort Worth-based GSA contracting officer at the bottom.

The letter, addressed to “Dear GSA Partner,” noted that over the past year, the Multiple Award Schedule program had responded to “numerous” congressional inquiries and Freedom of Information Act requests regarding allegations of failed compliance with the TAA and the Buy American Act.

Made In America

In January, Sen. Charles Schumer (D-N.Y.) said the GSA Advantage! website had listed products that were described as “made in America” but in fact were produced overseas. He said the GSA should review its website labels and excise products that are falsely listed.

The Buy American Act, in place since 1933, and the regulation that stems from it significantly restricts the federal government from purchasing non-American-made products. The TAA stretches the law by allowing the purchase of end products from the U.S. or designated countries, which, according to GSA’s website, includes World Trade Organization government procurement agreement countries; free-trade agreement countries; least-developed countries; and Caribbean Basin countries. The designated country list, which includes 124 nations, excludes prominent U.S. trading partners China and India.

The letter from the Great Southwest Region in Fort Worth ordered companies that have found products manufactured in non-TAA designated countries to remove all such products from their TAA contract; upload a new and revised catalog to GSA’s Schedule Input Program; and send an updated price list and terms and conditions to the National Schedules Information Center.

The GSA gave companies that received the letter five days, until the close of business May 10, to respond. Businesses that didn’t reply in time face severe penalties, according to the letter, including, typed in bold letters, “the removal of your entire GSAdvantage file.”

In a statement, a GSA spokesperson told Bloomberg BNA: “Once learning of products being offered on a Schedule contract that are potentially non-compliant with the Trade Agreements Act (TAA), or when the country of manufacture is otherwise misrepresented, GSA will conduct an immediate review an take swift action to ensure that vendors remove non-compliant products from Schedule contracts and GSA Advantage!.”

Unmanned Vehicles

According to the GSA spokesperson, 2,872 letters were emailed to contractors from the agency’s offices in Fort Worth and Kansas City. That included 308 emails sent to Schedule 51V Hardware Superstore contractors; 1,184 to Schedule 84 providers of security, facilities management, marine craft and emergency/disaster response-related goods; 641 to Schedule 56 makers of building materials and supplies and alternative energy solutions; 361 to Schedule 66 producers of test and measurement equipment, unmanned scientific vehicles and geographic environmental analysis equipment; and 378 emails to Schedule 7 makers of hospitality and cleaning equipment, sanitizers and toiletries.

The spokesperson confirmed the GSA was targeting those specific schedules and products because of congressional and other complaints. “Those schedules are among the first group of targeted schedules with identified risk that GSA is reviewing,” the spokesperson said.

Attorneys who represent contractors that received the emailed letter told Bloomberg BNA they are asking GSA for extensions to conduct necessary research into their product lines, and to complete all the needed paperwork.

Maureen Jamieson, executive director of contracts and consulting at Centre Law & Consulting in Tysons Corner, Va., said she has heard from several clients concerned about the letter, including some based in Fort Worth and another that was contacted by GSA’s Kansas City office. She said GSA had not yet responded to her requests for an extension.

“I’ve been hearing from clients of many years. They’re coming out of the woodwork,” Jamieson told Bloomberg BNA, adding that she was concerned about the tight turnaround time the GSA’s directive gave contractors. “If you’re going to do it right, it just requires more time, ” she said.

Day One

“It’s definitely been a scramble, I guess you could say,” Gunjan Talati, a Washington-based partner with Thompson Hine, told Bloomberg BNA.

Talati said companies have been responsible for complying with the underlying requirements – that they adhere to the rules put forth in the TAA and Buy American Act – “since Day One.” But regardless of how diligent companies have been in fully adhering to those laws in the past, he said, “I look at this as a wake-up call.”

Compliance with the TAA is often a complicated affair that can require “a detailed examination of the product’s manufacturing process,” Talati and fellow Thompson Hine Partner Lawrence Prosen wrote in a client advisory issued a day after GSA emails were sent. This includes a determination as to whether articles from one country have been “substantially transformed” into a new and different article of commerce that is distinctly different from the original item, they wrote.
 

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Centre Law & Consulting

The GSA FAS Office of Acquisition Management is planning to refresh all Multiple Award Schedules to incorporate provision and clause updates. For Schedules that offer services, both professional and nonprofessional, the solicitation refresh and corresponding mass modification will also update the application of the Service Contract Labor Standards (SCLS) to align with the U.S. Department of Labor’s SCLS compliance procedures.

They recently issued a presentation that outlines the planned changes and updates in the modification. GSA Overview of Planned MAS Changes, courtesy of the GSA to learn more.
 

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Centre Law & Consulting

Earlier this week, the Equal Employment Opportunity Commission (EEOC) issued a publication related to the rights of individuals with disabilities under the Americans with Disabilities Act (ADA) when requesting leave from work as a reasonable accommodation. While the ADA clearly requires employers provide qualified disabled individuals with a “reasonable accommodation” to permit the individual to perform the essential functions of the job, the entitlement to leave as such an accommodation has been a focus of the EEOC and litigation in recent years. The EEOC noted in its press release, that “[d]isability charges filed with the EEOC reached a new high in fiscal year 2015, increasing over 6 percent from the previous year” and that the EEOC has identified a “prevalence of employer policies that deny or unlawfully restrict the use of leave as a reasonable accommodation.” Thus, the publication seeks to provide general information related to assessing requests for leave under the ADA and also provides examples of leave requests and the EEOC’s determination of appropriate action.

Employee requests for leave linked to medical conditions (e.g., stress, depression, etc.) have been on the rise including, for example, requests for telework, breaks, reduced schedules, and extended time off. Given the ADA’s now more expansive definition of disability, these requests must be assessed by employers for compliance with ADA in addition to other various state or federal laws prior to making a determination. Being informed about the ADA requirements is essential in ensuring these requests are handled in an appropriate manor. The required “interactive process” is not a one-size fits all approach and specifically contemplates a review of whether alternative forms of reasonable accommodations may be effective in meeting the employee’s needs. Thus, while an employee may seek leave as an accommodation, the employer may propose other accommodations that may permit the employee to return to work sooner or be more productive while at work.

In addition, while the EEOC still has not provided a bright-line on what length or frequency of leave may become an undue burden, it is worth repeating that when an employee requests “indefinite leave” (i.e., leave without any indication as to when or whether the employee will return) the EEOC has determined that such leave would be an undue burden and, thus, not required to be provided by the ADA.

This publication supplements other available resources available from the EEOC and should be consulted by those responsible for reviewing reasonable accommodation requests and company leave policies. The publication also covers modifications to existing leave policies, maximum leave policies, communication with employees on leave (including when returning to work from leaves covered by FMLA), the “interactive process” in assessing reasonable accommodation requests, and undue hardship considerations.

About the Author:

Marina Blickley | Centre Law Group Marina Blickley
Associate Attorney

Marina Blickley focuses on the Government Contracting and Non-Profit industries. She regularly assists clients in all aspects of employment and labor law including employment discrimination, harassment, retaliation/whistleblower, compensation practices, and wage and hour violations. Marina also represents companies in commercial litigation matters concerning contract disputes, restrictive covenants/non-competes, business conspiracy, misappropriation of trade secrets, and computer fraud and theft.

 

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Centre Law & Consulting

Alleluia! Inconsistence SCA implementation from GSA be gone!

GSA has finally issued guidance on the implementation of the Service Contract Labor Standards (formerly called the Service Contract Act). It seems like dog years ago and certainly several changes of leadership at GSA when I first met with them about issuing uniform SCLS guidance.

How Do We Know This?

GSA published a draft refresh of Schedule 23V (firetrucks, auto, and auto parts and accessories) which contains the draft guidance along with some SCA/SCLS questions and answers. However, GSA tells us that this (draft) guidance will be finalized pronto and implemented across the board on all schedules. The grand Wizard of Oz will finally speak to all in Munchkin Land.

What You Need to Know Now:

  1. We finally have some (forthcoming) guidance from DOL and GSA. In summary, current Wage Determinations (WDs) will be deleted from all existing schedule contracts.
  2. GSA policies and procedures will be updated to direct ordering activity contracting officers to incorporate the appropriate Wage Determinations at the task order level.
  3. I have always said the FAR directs the contracting officers to make this determination and not the contractor. This is consistent with the FAR.
  4. A GSA Mass Mod will be issued in approximately 10 days across all Schedules incorporating these changes.
  5. Although the revised Schedule 23V Refresh is a DRAFT summary of what is to come, it highlights the significant changes. There are FAQs that provide a good summary specific to SCA.

 
Centre’s Concerns:

  1. You can’t bid higher than your Schedule rates.
  2. If you are bidding on a task order proposal that incorporates a WD for an area that is higher priced than your schedule rates, you may have to modify your GSA Schedule. We don’t know if GSA will process modifications to support bidding and not billed rates but GSA, this can be an issue. I predict mass confusion here, just like when the Wicked Witch of the West flies over Oz.
  3. All GSA Catalogs will need to be revised to remove the SCA matrix. There will be less work at the Schedule level now on SCA/SCLS.

 
Need More Information?

Email me at bkinosky@centrelawgroup.com if you want the GSA FAQs and Schedule 23V with the pertinent sections. I will also be posting more details on our SCA LinkedIn Forum. For even more help, consider reaching out to us if you need legal or GSA consulting services. We are all about the SCLS/SCA compliance.

Want Training?

We offer a variety of educational courses throughout the year on these and many other topics. See what’s coming up on our Course Calendar or browse our complete Course Catalog.

About the Author:

Barbara Kinosky Barbara Kinosky
Managing Parnter

Barbara Kinosky has more than twenty-five years of experience in all aspects of federal government contracting and is a nationally known expert on GSA and VA Schedules and the Service Contract Act. She has a proven track record of solving complex issues for clients by providing strategic and business savvy advice. Barbara was named a top attorney for federal contracting by Smart CEO magazine in 2010, 2012, and 2015.

 

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Centre Law & Consulting
By Barbara Kinosky
My Driveway
I wake up to yet another day of rain in the Washington D.C. metro area.  It wouldn’t be so bad if my driveway was not a mud pit.  Years ago a crafty driveway company talked us into a pebble driveway which looked like it was in Architectural Digest – for all of a couple of years.  Rocks eventually roll downhill and my driveway has a definite slope to it.  I also have discovered that it is cheaper to put down gravel than it is to remove it and that crews don’t like working in the rain.  And I don’t like slogging through the driveway mud to my car, which is parked on the street in what I think is another zip code.
Budgets
Which brings me to why federal budgets are flat. Since my last blog I have attended and spoken at numerous conferences.  Some prognosticators say professional services will pick up and others say that is a downward slope like my driveway.  What I think we all agree on is that there will be no budget until next year.  The government will soldier on with continuing resolutions until another administration takes office.  I am separating from the pack though and predicting that temporary staffing services will pick up even in a flat budget year.  Someone has to do the work.
DHS  
Which leads me to the Department of Homeland Security (DHS) which is flying the “Incumbent Bridge Contract Flag”. This is because of their own acquisition directive MD 102 (“mad dog” 102). That directive mandates an acquisition lifecycle framework (ALF) which sounds good in the land of good intentions.  However, ALF is a dog and a not a friendly one.  The ALF is a cumbersome four-phase process that anyone in DHS wanting to buy anything (with the exception of the IG) must go through prior to proceeding with an acquisition.  Most of the DHS acquisition pros have thrown up their hands (and maybe their lunches) over this onerous process.  It is far easier to extend incumbent contracts than to proceed under ALF.
Recent Bid Protests  
Protests are trending up 3% over the previous year.  Sustain rates are around 12 to 14% on average.  In CACI Enterprise Solutions, Inc., B-412648, Apr 25, 2016, the GAO upheld the award to SAIC under a NASA procurement for management of NASA’s enterprise applications. From the decision:
Protest that agency’s evaluation and selection decision failed to consider performance risk associated with staffing reductions in the awardee’s proposal is denied where the agency reasonably concluded that the awardee proposed sufficient staffing to perform the contract requirements, and the source selection authority fully considered the performance risk associated with the awardee’s staffing approach but found the risk to have been mitigated.   http://www.gao.gov/products/B-412648,B-412648.2#mt=e-report
It’s interesting to note that SAIC was the incumbent and trimmed its own staff down for the new win.
Labor   
The White House has proposed new regulations that will prohibit federal agencies from asking a job applicant about their criminal history until after a conditional job offer has been made.  Hiring managers will have to eliminate questions about criminal records until later in the hiring process.  This, I am confident, will eventually flow down to federal contractors.  File your comments before July 1. I can’t resist posting a link to my Linked In post last week about the VA retaining an employee convicted of armed robbery because the armed robbery was committed on her own time and not on VA time.
GSA and VA Schedules
I’ll be posting a white paper on our website next week on the latest news in GSA and VA contracting covering the latest on category management and the new SAC at the VA.
Until next time,
Barbara
The post The Earth is Flat but Not My Driveway appeared first on Centre Law & Consulting.

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Centre Law & Consulting
Currently, the U.S. Government is revising the U.S. export control and enforcement framework.  The new system is designed to facilitate efficiencies and coordination within the U.S. Government, protect national security and critical technologies, and cut costs to U.S. exporters.  However, compliance will remain paramount because the U.S. Government is also consolidating its enforcement mechanisms.
Background:
In August 2009, President Obama directed a broad-based inter-agency review of the U.S. export control framework.  There has not been much change to the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) since the end of the Cold War.  The export control reform will facilitate secure and transparent trade for all U.S. exporters around the world.  According to the U.S. Government, 98 % of all identified exporters are businesses that have fewer than 20 employees.  Yet, on average they spend 36 % more per employee on compliance.  The new system seeks to change this.
Generally, the ITAR control the manufacture and export of defense articles, defense services, and defense technology.  The EAR control the export of dual-use goods, software and technology.  In addition, U.S. exporters should also be concerned with the Office of Foreign Asset Control Regulations (OFAC).  The OFAC administer and enforce U.S. trade sanctions.
Current Export Control Regime Challenges:
Multiple agencies have overlapping jurisdictions, disharmonized enforcement tools, and numerous control lists which have posed many challenges to small businesses and U.S. exporters.
Overlapping Enforcement:  There are seven primary departments involved in export controls: Commerce, Defense, Energy, Homeland Security, Justice, State, and the Treasury.  The U.S. Departments of Commerce, State, and the Treasury are primarily responsible for export licensing.  The U.S. Departments of Homeland Security, Justice, and Commerce are responsible for criminal enforcement investigations.
In addition, the U.S. Department of Defense, the U.S. Department of Homeland Security’s Customs and Border Protection, and the U.S. Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives and the Federal Bureau of Investigations are also involved in various aspects of export controls.  This results in overlapping enforcement actions, multiple investigations based on the same violation, and fundamentally confuses U.S. exporters.  It also creates numerous compliance risks because it potentially exposes the same U.S. exporter to multiple agencies based on a single incident.
Disharmonized Enforcement Tools: Before the export control review started, different laws had inconsistent penalties for similar violations which offered unpredictable results for the U.S. Government.  For example, in some cases, the maximum penalty for criminal violations of the U.S. Munitions List controls was only ½ of the comparable sentence for violations of the Commerce Control List.
Multiple Export Lists: U.S. exporters were required to spend a lot of time and resources reviewing various screening lists maintained by the U.S. Departments of Commerce, State, and the Treasury before they could make an export.  This made it difficult for them to ensure compliance.  They had to review the U.S. Munitions List, the Commerce Control List, embargo lists, excluded parties list and entities, and others.
The New and Improved Export Controls Regime
The revisions of the export control and enforcement regime are far from over, but this is what the U.S. Government has accomplished thus far:
Consolidated Screening List:  The U.S. Government made substantial improvements to consolidate all the screening lists.  In 2015, the U.S. Government introduced a new feature which helps to conduct searches without knowing the exact spelling of different entities listed.  This will help U.S. exporters to conduct due diligence but may also require them to review their current compliance policies.
Export Coordination Enforcement Center: Pursuant to the Executive Order 13558, Export Coordination Enforcement Center, the U.S. Government has set up the mandatory de-confliction and coordination of government-wide export enforcement activities.  This is designed to address the jurisdictional and enforcement overlap that currently exists between different U.S. departments involved in export controls and enforcement.  The new center also allows the U.S. Government to better coordinate its enforcement actions.
According to the 2015 Government Accountability Report CRITICAL TECHNOLOGIES Agency Initiatives Address Some Weaknesses, but Additional Interagency Collaboration Is Needed, multiple agencies have responsibility for export controls and for protecting U.S. critical technologies.  The export coordination enforcement center is designed to consolidate enforcement, investigations, and public outreach activities related to enforcement of U.S. export controls in one place.  The chart below lists various programs involving export controls and critical technologies and each agency involvement.
Program Lead Agencies and Stakeholder Agencies International Traffic in Arms Regulations export controls State (lead), Defense, Homeland Security, and Justice Export Administration Regulations export controls Commerce (lead), State, Central Intelligence Agency, Defense, Energy, Homeland Security, and Justice Anti-Tamper Policy Defense Foreign Military Sales Program State (lead), Defense, and Homeland Security National Disclosure Policy Committee Defense (lead), State, and intelligence community Militarily Critical Technologies Program Defense Committee on Foreign Investment in the United States Treasury (lead), Commerce, Defense, Energy, Homeland Security, Justice, State, and others  
Harmonization of Criminal Penalties for Illegal Exports:  The Comprehensive Iran Sanctions, Accountability, and Divestment Act has harmonized the various statutory criminal penalties for export control violations.  According to the U.S. Government, criminal convictions are now all standardized to up to $1 million and or 20 years in prison or both.  Some of the recent enforcement actions include an attempted illegal export of up to five tons of carbon fiber to China.  The individual was sentenced to 46 months in prison and lost export privileges for 10 years.  In another example, a California based company illegally exported pressure transducers to Israel, Malaysia, China and Singapore.  The company was fined $850,000 or which $600,000 was suspended.
Key Takeaways:
The new export control reforms will benefit U.S. exporters and small businesses because they consolidate the regulatory oversight and reduce compliance costs.  At the same time, the U.S. Government is enhancing its enforcement tools to better address violations and coordinate its control efforts.  In order to benefit from the new reforms, and avoid the penalties, it is important to revise compliance policies.
Webinar:
If you would like to learn more about the U.S. Export Control Reforms, please consider attending the “New Opportunities for Small Businesses and U.S. Exporters” webinar on June 23, 2016 between 12 and 1 PM EST.  This webinar will address the ITAR, EAR, and OFAC, major export control reforms and opportunities, new enforcement mechanisms, and cost-effective export compliance practices for small businesses.
 
Register Now
Join the LinkedIn Group:
Centre has also recently created a Trade Agreements Act Forum on LinkedIn to provide a world-wide forum to discuss best practices for Trade Agreement Act (TAA) and Buy American Act (BAA) compliance issues and new developments.
The post The Overhaul of the U.S. Export Controls Will Benefit Small Businesses appeared first on Centre Law & Consulting.

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Centre Law & Consulting
Mrs. Kinosky has been invited to speak during the “Enterprise Risk Management Session – Managing Fraud Risk through ERM and current trends with GSA Price Reductions” on Thursday, May 5, 2016 at 11:10am in Tysons Corner, VA.
About Barbara Kinosky
Barbara Kinosky is the Managing Partner of Centre Law and Consulting and has over twenty-five years of experience in all aspects of federal government contracting. Barbara is a nationally known expert on GSA and VA Schedules and the Service Contract Act. She has a proven track record of solving complex issues for clients by providing strategic and business savvy advice. Barbara was named a top attorney for federal contracting by Smart CEO magazine in 2010, 2012 and 2015. Prior to establishing Centre, Barbara was the head of a government contracts practice group at a major law firm. She started Centre is 2002 to provide integrated legal, GSA consulting and training services.
About the 21st Annual Government Contracting Update
“Doing business with the US Government is extremely challenging. This event has provided an annual update for the Government Contracting industry for the past 20 years. This year, we will be presenting the update utilizing different formats including panels and breakout sessions with DHG industry leaders, attorneys, and industry representatives who face and address contracting issues and challenges on a daily basis.”
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