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  1. By Edward W. Bailey, A recent decision by the United States Court of Appeals for the Federal Circuit has expanded restrictions on government contractors’ ability to conduct post-award protests. In Inserso Corp. v. U.S., the United States Defense Information Systems Agency (“DISA”) posted a solicitation, titled Encore III, for the opportunity to sell information technology services to various federal government agencies. Encore III was split into a “full and open” competition and a competition reserved for small businesses. While qualifying bidders could submit offers in both competitions, the protester, Inserso Corporation (“Inserso”), only submitted a bid in the small business competition. Importantly, while both competitions required proposals to be submitted on the same date, bidders on the full and open competition were notified of their award status nearly a full year prior to those on the small business competition. Thus, through the de-briefing process of the full and open competition, contractors who submitted bids in both competitions became privy to information that their competitors in the small business competition did not have – e.g., the total evaluated price for all full-and-open awardees and information surrounding DISA’s evaluation methodology. After not receiving an award in the small business competition, Inserso filed a protest in the Court of Federal Claims arguing that the imbalance of information created an unlawful competitive disadvantage. The court rejected Inserso’s protest, finding that, despite any alleged competitive disadvantage, Inserso was not prejudiced by DISA’s award process. Inserso then appealed to the Federal Circuit which also found in favor of the government but on different grounds. Specifically, citing the well-known rule established in Blue & Gold Fleet, L.P. v. U.S. that prohibits post-award protests of patent ambiguities, the Court noted that if a bidder on a government contract “exercising reasonable and customary care would have been on notice of the now-alleged defect in the solicitation long before the awards were made”, it forfeits its right to protest. Thus, the court determined that if Inserso “had taken reasonable care”, it would have been aware of the potential for its competitors to gain an unlawful advantage many months prior to discovering its award-status on the small business competition. In light of the court’s holding in Inserso, government contractors can no longer assume their right to reserve grounds for protest, other than patent ambiguities, until after they are notified of their award-status – i.e., if you see something, say something. About the Author: Edward W. Bailey Associate Attorney Ed Bailey is an associate attorney whose practice focuses on government contracts law, employment law, and litigation. Ed recently graduated cum laude from George Mason University’s Antonin Scalia Law School where he was a member of the Law Review. The post If You See Something, Say Something: COAFC Expands Restrictions on Post-Award Protests appeared first on Centre Law & Consulting. View the full article
  2. By Heather Mims, Esq. The False Claims Act (FCA) generally provides that any person who knowingly submits a false claim to the government is liable for triple the government’s damages plus a penalty for each violation. Over recent years, the Department of Justice (DOJ) has gradually increased the penalty for each violation of the FCA, apparently owing to inflation. As the penalty accrues for each violation of the Act, penalties can run into the millions of dollars, as each improper invoice or certification can, in certain circumstances, count as a distinct violation. In 2019 alone, the DOJ recovered over $3 billion in judgments and settlements from civil cases involving fraud and false claims against the government. For reference, the law as enacted in 1986 set penalties at $5,000 to $10,000 per violation but the Act has since been amended to permit federal agencies to update penalties annually. While the penalties were not adjusted in 2019, on June 19, 2020, the Department of Justice published its final rule adjusting for inflation the civil monetary penalties assessed with various laws, including the FCA. This new rule increases the previous minimum penalty from $11,181 per violation to $11,665 per violation. Likewise, it increases the maximum penalty from $22,363 to $23,331 per violation. This new amount applies to all violations occurring on or before November 2, 2015 and not yet assessed. Given the weighty penalties for each violation of the FCA, it is even more important that contractors are paying close attention to the invoices and certifications it submits to the government. We have previously written about the heightened enforcement risks and audits that are likely to follow from the current economic stimulus plans and agency flexibility in place during the pandemic. Thus, it is even more imperative that contractors closely monitor their submissions in this unprecedented time. About the Author: Heather Mims Associate Attorney Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow. The post DOJ Continues to Increase False Claims Act Penalties appeared first on Centre Law & Consulting. View the full article
  3. By David Warner, Last week, the Equal Employment Opportunity Commission (EEOC) issued updated technical assistance questions and answers entitled “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws.” It was the second update to the guidance this month. If history is our guide, the science and guidance may be different by the end of next month; but the EEOC’s Q&A currently represents the most up to date direction for employers as they eye reopening offices and bringing employees back from remote work or layoffs. While employers are well-counseled to be familiar with the entirety of the Q&A, the June updates have clarified the EEOC’s position with respect to several issues. For example, the EEOC had previously stated that COVID-19 viral tests were permissible under the Americans with Disabilities Act because the disease posed a “direct threat” to other employees. The Commission has now clarified that antibody tests do not share the same status and that employers cannot utilize antibody tests as a prerequisite for employees to reenter the workplace. Another recent revision addresses the intersection of accommodation and age discrimination. Specifically, the EEOC clarified that, even though individuals over the age of 65 are at higher risk for a severe case of COVID-19, it would be a violation of the Age Discrimination in Employment Act for an employer to preclude older workers from returning to the workplace even if it was for the benevolent reason of protecting that individual from the risk of infection. The guidance similarly clarified that employers would also violate the law (here Title VII) if they precluded pregnant women from returning to work even if motivated by benevolent concern for their health. Another increasingly common question addressed by the guidance is an employer’s obligation to an employee who themselves may not be at risk of severe illness but who might expose a family member who is immunocompromised. The EEOC’s June 11 update clarified as follows: D.13. Is an employee entitled to an accommodation under the ADA in order to avoid exposing a family member who is at higher risk of severe illness from COVID-19 due to an underlying medical condition? No. Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment. The ADA does not require that an employer accommodate an employee without a disability based on the disability-related needs of a family member or other person with whom she is associated. For example, an employee without a disability is not entitled under the ADA to telework as an accommodation in order to protect a family member with a disability from potential COVID-19 exposure. The EEOC did note that an employer would be free to provide such flexibility if it chooses to do so, but such accommodation is not required as a matter of law. Consistent with that principle, the updated guidance also provides best practices for employers to invite employees to request flexibility in work arrangements more generally. The EEOC encourages employers to begin the discussion around accommodation now – i.e., while employees are currently teleworking to provide time for an interactive process. Broadcast communications to staff beginning such discussions are also advised to include CDC-listed medical conditions that may place people at higher risk of serious illness, provide instructions about who to contact, and indicate that the employer is willing to consider requests on a case by case basis. It’s a quickly evolving world for employers. Further updates as COVID-19 events and regulatory responses warrant!! About the Author: David Warner Partner David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices. The post COVID-19 and Employee Accommodations: Current State of EEOC Guidance appeared first on Centre Law & Consulting. View the full article
  4. By JW Butler The General Services Administration’s (GSA) Multiple Award Schedule (MAS) has several electronic contract management tools, referred to as “eTools”, to help contractors manage their MAS. A list of the GSA eTools can be found here. Below are the eTools that are most commonly used by contractors, as well as some additional eTools not covered on GSA’s website. Every contractor will have to register their contract for GSA’s eTools once their contract has been awarded prior to uploading their pricelist in the Schedules Input Program (SIP). After contractors register their contract in GSA’s eTools, the system will generate a password for the contractor to use in SIP as well as to access GSA eBuy. Schedules Input Program (SIP) SIP is where contractors go to upload their pricelists that are posted on GSA eLibrary and GSA Advantage!® after their contract is awarded or a modification has been approved. For more information on SIP and SIP uploads, please see our blog here. Federal Acquisition Service (FAS) Sales Reporting Portal (SRP) The FAS SRP is the system where contractors are required to submit sales monthly or quarterly and remit their Industrial Funding Fee (IFF) payments. For more information on how the MAS Consolidation has effected the FAS SRP, click here. GSA eBuy This is the online system where Request for Quotation (RFQ), Request for Information (RFI), and Request for Proposal (RFP) information can be found. eBuy notifies contractors via email when opportunities for their Special Item Numbers (SINs) appear on eBuy. Contractors can only see RFQs/RFIs/RFPs for the SINs they are awarded. Contractors can manage email notifications and eBuy points of contact in their eBuy profile. eOffer/eMod In this system contractors and prospective contractors submit new and streamlined offers and modification requests. Contractors will need an active digital certificate to access both systems. Be sure the name and email in your digital certificate match the name and email entered in the eMod system EXACTLY; if they do not match you will not be able to access the system. Authorized Negotiators will need to be assigned signature authority to sign modifications in eMod or new offers in eOffer. GSA Advantage!®/eLibrary GSA Advantage!® is GSA’s online shopping system that holds all products and services offered by GSA contract holders through the MAS program. Contractors’ pricelists will appear here and in eLibrary after being uploaded and approved in the SIP program. GSA eLibrary will also allow contractors to view their awarded SINs, participation in the optional purchasing programs through the MAS, and their Contracting Officer’s contact information. Federal Acquisition Service (FAS) Schedule Sales Query (SSQ) Plus The previous system used for the FAS SSQ has been replaced by the FAS SSQ Plus. The SSQ can provide sales data that has been reported monthly or quarterly by contractors in the FAS SRP. The sales data can be searched for and displayed by several different factors such as contract number, SIN, or DUNS number. After reports are pulled in the “Control Panel” tab of the SSQ, the “Report Builder” tab can be used to further refine the search results by Fiscal Year (FY) or Quarter. FedBizOpps (Now in beta.SAM.gov) FedBizOpps is no longer active and has been fully integrated into beta.sam.gov under “Contract Opportunities”. This area on beta.sam.gov is the single location for government opportunities over $25,000. System for Award Management (SAM) All contractors who wish to do business with the US Government are required to be listed in SAM. SAM contains contractor information such as the company’s business type, business size, address, full business name including any “doing business as” (dbas), and NAICS codes. Companies can be searched for by name or DUNS number in this system. Contractors will need to be sure they have at least one applicable NAICS code for each SIN they are proposing in SAM prior to submitting an offer in eOffer. FAS MASS Modification System This system is where contractors will go to accept all MASS Modifications when they are released by GSA. To accept the MASS Modification contractors will enter their contract number in the search bar and select the open MASS Modification. Contractors will need the PIN sent to them from GSA for the assigned MASS Modification in order to accept the modification. If you have any questions on the above eTools please feel free to reach out to anyone on our GSA team and we will be happy to help. About the Author: JW Butler Consultant JW Butler is GSA/VA Contract Consultant at Centre Law & Consulting. JW supports the consulting team in preparing various contract modifications, market analysis for products/services, and GSA Advantage catalog updates for Schedule contracts. JW also assists in the preparation of both new Schedule and successful legacy proposals, as well as uses the Schedule Input Program (SIP) to upload catalogs to GSA eLibrary and GSA Advantage. The post General Services Administration’s eTools – Tools for Contract Management appeared first on Centre Law & Consulting. View the full article
  5. By Tyler Freiberger, Esq., A federal contractor has used a rare exception to keep its case for monetary damages against the Government out of the Court of Federal Claims (“COFC”). In J-Way Southern Inc. v. U.S., the United States District Court for the District of Massachusetts has denied the Government’s request to remove the case despite the long standing that the COFC has exclusive jurisdiction over contract claims against the U.S. in excess of $10,000. There are distinct advantages if contractors can keep their claims against the Government in a federal district court, e.g. the contractor can demand trial by jury. While it may be difficult to prove empirically, many plaintiff’s attorneys believe a jury is more likely than a judge to sympathize with a company’s frustrations in terms of dealing with the Government. The theory is that juries do not typically get as caught up in the details of protections the government gives itself in contract matters and typically rule in favor of the party that seems right. If you are pursuing a contract claim, such as a failed Request for Equitable Adjustment, having a sympathetic everyman/woman on the jury could tip things in your favor. However, the chances your case qualifies to stay in a federal district court are still rare. The exception applied in J-Way is just that, an exception. The judge focused on a little used provision of the Contract Disputes Act that only applies with maritime contracts, 41 U.S.C. § 7102(d). The decision does somewhat expand what qualifies for this exception. The contractor in J-Way used land-based construction equipment to dredge a small waterway. While this work appears to be typical construction, because the purpose of the contract was to support maritime activities, the court applied the maritime exception. While the circumstances remain rare, it is always worth considering exceptions like this to give your claim a better fighting chance when possible. About the Author: Tyler Freiberger Associate Attorney Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties’ human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia. The post Contractor’s Claim Against U.S. Stays Out of COFC appeared first on Centre Law & Consulting. View the full article
  6. By Heather Mims, Esq. An aptly titled bill, President Trump signed the Paycheck Protection Flexibility Act into law on June 5, 2020. The Act would ease several restrictions on companies that borrow money under the Paycheck Protection Program (PPP). You can read more about the Paycheck Protection Program here and here. Generally, the new Act gives businesses more time and flexibility to make qualifying expenditures on loan forgiveness as well as allowing businesses with forgiven loans to defer payroll taxes. Some of the more important provisions include: Extending the PPP loan forgiveness period to include costs incurred over 24 weeks (rather than the previously set 8 week period) after a loan is issued or through December 31st, whichever comes first. Current borrowers who received loans prior to the Act’s enactment may still elect the shorter 8 week period. Extending the period from June 30th to December 31st for businesses to restore previously reduced staffing or salary levels. This provision applies to worker and wage reductions made from February 15th through April 26th. Maintain forgiveness amounts for companies that document their inability to rehire workers employed as of February 15th, and their inability to find similarly qualified workers by the end of the year. Companies may also be covered separately if they show that they couldn’t resume business levels from before February 15th because they were following federal sanitization or social distancing requirements. Lowering the required payroll expenses threshold from 75% to 60% to qualify for full loan forgiveness. Raising the cap on the amount of forgivable loan proceeds for non-payroll expenses from 25% to 40%, while still maintaining the PPP’s existing restrictions on use of the loan proceeds. Extending the maturity date of newly issued PPP loans from 2 years to 5 years. About the Author: Heather Mims Associate Attorney Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow. The post Paycheck Protection Program Becomes More Flexible appeared first on Centre Law & Consulting. View the full article
  7. By Tyler Freiberger, Esq., As pandemic restrictions are beginning to ease, employers are increasingly challenged with knowing and meeting their obligations concerning COVID-19 prevention in the workplace. The confusion and shifting nature of these goal posts is best exemplified by the Department of Labor’s recent revised memorandum advising that employers are responsible for recording cases of COVID-19 occurring in the workplace. On first read, the new requirements can seem overwhelming, and the memorandum itself highlights how difficult it is to fit OSHA reporting requirements into a COVID-19 world. First, “low-risk” industries or employers with 10 or fewer employees are exempt from the reporting unless the illness results in a fatality or in-patient hospitalization. The OSHA list of low-risk industries is not adjusted for the unique nature of the pandemic. Retail, childcare services, restaurants, and even some outpatient care centers are considered “low risk,” even though these areas clearly will expose workers to the public. For employers not in these industries, a great deal of detective work will be needed to determine if the illness was truly “work-related.” The new guidance doesn’t change the definition of work related injury or illness. The DOL acknowledges that, under the standing definition, “it remains difficult to determine whether a COVID-19 illness is work-related, especially when an employee has experienced potential exposure both in and out of the workplace.” Indeed, requiring employers to essentially conduct their own form of contact tracing is a tough feat given experts warn COVID-19 poses new tracking challenges. But none of those challenges will excuse non-compliance. Employers are advised to perform a reasonable investigation when evaluating if they should report an employee’s COVID-19 illness to OSHA. Extensive medical inquiries are not advised. That opens an entirely new set of problems under the Americans with Disabilities Act. DOL advises employers meet their duty by asking the employee how they believe they contracted the COVID-19 illness; discussing work and out-of-work activities that may have led to the COVID-19 illness; and reviewing the employee’s work environment for potential SARS-CoV-2 exposure. Lastly, common sense is allowed. If multiple workers develop the illness after working closely together, this could require reporting. In the alternative, an illness is likely not work-related if the employee is the only one to contract COVID-19 and their job duties do not put them in contact with large numbers of the public. As businesses reopen, turn to your local and state health guidance. While the goals of OSHA are admirable, the protections and obligations it issues are not a good fit for the modern pandemic. About the Author: Tyler Freiberger Associate Attorney Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties’ human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia. The post Square Pegs and Round Holes – OSHA Reporting Requirements A Difficult Fit for COVID-19 appeared first on Centre Law & Consulting. View the full article
  8. By Julia Coon, The General Services Administration (GSA) will be releasing refresh #2 to the Multiple Award Schedule (MAS) solicitation in June 2020. All current MAS contractors will receive a PIN to accept the mass modification and will have 90 days to accept the mass modification. The upcoming refresh will include the following changes. Photo Requirements for Product Vendors: Clause SCP-FSS-001 Instructions Applicable to All Offerors will be updated to provide contractors with better guidance on current photo requirements for designated Special Item Numbers (SINs). Contractors with designated SINs must submit Universal Product Codes (UPC) and product photos for each item offered on GSA Advantage! General Clause Updates: The following clauses will be updated to remove references to the submission of paper price lists and modifications: 552.238-77 Submission and Distribution of Authorized Federal Supply Schedule Price Lists, 552.238-82 Modifications, and I-FSS-600 Contract Price Lists. The note regarding clause 52.204-24 Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment will be updated to reflect that the representation is now completed in the System for Award Management (SAM). If the Offeror represents that they “do provide” covered telecom, the representation required by provision 52.204-24 must be completed and uploaded in eOffer. A note will be added to clause 552.238-77 Submission and Distribution of Authorized Federal Supply Schedule (FSS) Price Lists directing contractors to follow the guidance and requirements provided in the ‘GSA Advantage Requirements’ section on the GSA ‘Available Offerings and Requirements’ page (www.gsa.gov/mascategoryrequirements). Service Contract Labor Standards (SCLS) Wage Determinations (WD) Updates: The updated WD index will be incorporated in the solicitation. There are no clause or policy changes to the application of SCLS. Contractors should ensure pricing and the WD numbers are updated and included in their SCLS matrix. Implement FAR Rule 2014-002: On February 27, 2020 a final rule was issued amending the Federal Acquisition Regulation (FAR) to implement regulatory changes made by the Small Business Administration. These changes provide Governmentwide policy for partial set-asides and reserves and for set-asides of orders for small business concerns under multiple award contracts. The final rule can be found here for additional details. Special Item Number (SIN) Changes: A new SIN will be added to include Fourth-Party Logistics Supplies and Services (4PL) solutions. GSA is making corrections to data for various SINs in refresh #2. GSA is also correcting the eligible subcategories for SIN ANCRA – Ancillary Repair and Alternations. If you have any questions regarding the upcoming MAS solicitation refresh, please reach out to our GSA Consulting Team here. About the Author: Julia Coon Consultant Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA price lists. The post Upcoming Multiple Award Schedule (MAS) Solicitation Refresh appeared first on Centre Law & Consulting. View the full article
  9. By Hon. Jack Delman Our new COVID-19 (COVID) world brings special risks and unanticipated cost in the performance of federal contracts, particularly for those contractors holding fixed price contracts. Below we suggest various ways through which a contractor can mitigate some of these challenges. YOUR RIGHTS UNDER YOUR CONTRACT AND THE LAW If COVID impacts the timeliness of your performance, you should be entitled to additional time to perform your contract. It is likely that COVID will be considered an “excusable delay” under your contract and the law. The amount of time to which you will be entitled however will depend on the extent to which COVID impacts your delivery schedule. A “Request for Equitable Adjustment “(REA) should be timely filed with the Contracting Officer (CO) when all the relevant facts are known, showing the connection between COVID and your performance delay. If the REA is denied in whole or in part, you can convert the REA into a claim by submitting a claim to the CO under the Disputes clause of the contract per the Contract Disputes Act, 41 U.S.C. 7101. Generally, the government is not obligated to compensate a contractor for increased costs to perform the contract work caused by unforeseeable “force majeure” events, such as COVID, absent a statute, contract clause, or regulation that provides for such relief. Some possible avenues of relief under these three categories are set out below. If you are an eligible small business, you may apply through SBA for funds made available under the new CARES Act, Section 1102, to support payroll costs impacted by COVID. The Act also provides “economic injury disaster loans” and limited “grants” through the SBA, as well as limited debt relief on pre-existing SBA loans. The CARES Act, Section 3610, also authorizes your contracting agency to modify your contract to reimburse costs of “paid leave” for employees unable to work due to government facility closures or other access restrictions. The government may also look with favor upon a request for reimbursement of unanticipated PPE cost that is necessary to keep both contractor and federal employees safe. You will have a better chance of recovering these costs if you keep the CO in the loop early in the conversation, rather than submitting a “bill” after the fact. You should always keep track of any changes to the scope of the contract work ordered by the CO; generally, such orders will be compensable (increased costs plus profit) under the Changes clause of your contract. FAR 52.243-1, -2, -3. In such a case, you should submit a REA to the CO providing prompt notice of the change and its impact. Keep records of all increased costs. (Note that under a commercial items contract, the CO may not unilaterally order a change to the contract; all changes to terms and conditions must be by written agreement of the parties, FAR 52.212-4(c).) If you are working under a contract that includes a “Value Engineering” clause, FAR 52.248-1, -2, -3, consider proposing a Value Engineering change to the government. If the government accepts your proposal, the result may be remarkably profitable. See FAR 48.1. To the extent that COVID causes you to miss your delivery schedule or interim milestones, you should make sure that your “Contractor Performance Evaluation” takes this into account. See FAR 42.15. For this purpose, it is wise to keep records of all COVID impacts and to provide your CO with regular notice of the same. Performance in the COVID environment will have its challenges for federal contractors. A prudent contractor will use the tools available under its contract, the regulations and the law to help mitigate these risks to the extent possible. About the Author: Hon. Jack Delman Retired Judge, Armed Services Board of Contract Appeals Jack Delman served as a judge on the Armed Services Board of Contract Appeals for 29 years and has extensive experience in the adjudication and mediation of large and complex contract disputes, including equitable adjustments, terminations and cost and pricing issues. Jack has extensive experience with claims analysis, FAR and DOD agency regulations and BCA practice and procedure. The post Contractor Claims in a COVID-19 World appeared first on Centre Law & Consulting. View the full article
  10. By Edward W. Bailey, A recent decision from the Civilian Board of Contract Appeals (“CBCA”) serves as a warning to government contractors as they incur increased expenses stemming from the ongoing COVID-19 crisis. However, it also reveals what contractors can do to protect themselves. In Pernix Serka Joint Venture, CBCA 5683 (Apr. 22, 2020), a government contractor, Pernix Serka Joint Venture (“Pernix”), had a firm fixed price contract with the State Department to construct a rainwater capture and storage system in Freetown, Sierra Leone. However, when an Ebola epidemic began there in March of 2014, Pernix reached out to its contracting officer (“CO”) for guidance on how to proceed. The CO responded by telling Pernix that “the decision for your people to stay or leave for life safety reasons rests solely on your shoulders”. Shortly thereafter, the World Health Organization declared the Ebola outbreak an “international public health emergency” and Pernix made the unilateral decision to shut down the project and evacuate its personnel. Several months later, Pernix submitted a request for an equitable adjustment on its contract to the State Department to compensate it for the additional costs it incurred in responding to the Ebola outbreak. When the State Department denied its request, Pernix appealed to the CBCA. Pernix’s key arguments on appeal were that the Ebola outbreak caused a “cardinal change” to the contract and/or a “constructive change”. The CBCA first rejected the argument that a cardinal change had occurred and described a cardinal change as one “so drastic that it effectively requires the contractor to perform duties materially different from those found in the original contract.” The CBCA then explained that there was no cardinal change to Pernix’s contract because its duties under the original contract remained entirely unchanged. Instead, it was simply Pernix’s own unilateral decision to modify its performance in response to the Ebola outbreak. Similarly, the CBCA then rejected Pernix’s argument that a constructive change occurred by explaining that a constructive change is one “where a contractor performs work beyond the contract’s requirements without a formal order, either by an informal order or due to the fault of the government.” Thus, the CBCA again explained that the government never directed Pernix to do anything and was not otherwise at fault for the burden placed on Pernix by the Ebola outbreak. In summarizing its holding in favor of the government, the CBCA stated that Pernix simply failed to cite to “any clause in the contract that served to shift the risk to the government for any costs incurred due to an unforeseen epidemic.” Despite this seemingly harsh result, the CBCA’s decision does not appear to foreclose all recovery for contractors making similar decisions in response to the COVID-19 pandemic. Instead, considering the key element in the CBCA’s decision was Pernix’s unilateral decision-making, to the extent contractors obtain guidance from their respective agencies or contracting officers, courts are likely to view such circumstance much differently. Encouragingly, in light of the much wider effect that the COVID-19 epidemic is having, many agencies, government facilities, and contracting officers have been providing the kind of guidance that was lacking in the CBCA’s decision in Pernix. However, contractors should nonetheless ensure they make every effort to verify whether such guidance is in place before making decisions in response to the ongoing COVID-19 crisis. About the Author: Edward W. Bailey Associate Attorney Ed Bailey is an associate attorney whose practice focuses on government contracts law, employment law, and litigation. Ed recently graduated cum laude from George Mason University’s Antonin Scalia Law School where he was a member of the Law Review. The post A Lesson from the CBCA on Recovering COVID-19 Related Costs on Your Government Contract appeared first on Centre Law & Consulting. View the full article
  11. By Heather Mims, Esq. In these unprecedented times, when the Government is handing out literally trillions of dollars of cash, a certain amount of unscrupulous behavior is almost certainly to follow. While the economic stimulus plan will provide desperately needed help to plenty of worthy small businesses, it will also surely be rife with fraud – and the Government will be on the lookout for deceitful contractors. The Government is acting quickly to hand out payments to those in need but ambiguities related to Agency memorandums or temporary guidance abound. For example, agencies continue to issue copious memorandums related to COVID-19 guidance and payments to contractors, but the guidance can be confusing (the Department of the Defense has issued at least seventeen various pieces of guidance alone) and the law is being interpreted differently between agencies as well as between contracting officers. As this funding amounts to the largest-ever federal stimulus program, Contractors receiving COVID-19 payments should be aware that enforcement actions are likely to follow. With the sheer amount of money involved, it would likely be impossible for Inspectors General, oversight boards, or agency auditors, among others, to completely police these payments. The Government will likely turn to whistleblowers and other compliance programs to ensure that the guidelines are properly being met by contractors, particularly contractors supplying services or goods to the federal government for the first time. Indeed, the Department of Justice has already set up a hotline for the American public to generally report fraud related to COVID-19 and the DOJ has likewise already filed its first enforcement action. While these items do not relate specifically to contractors, contractors should be wary of the attention that COVID-19 fraud schemes have already garnered and be sure that they have compliance programs in place. Contractors certainly will not want to be confronted with a False Claims Act violation so contractors should be diligent in documenting all costs expended related to COVID-19 (and documenting those costs separately to the extent possible), as well as any document associated delays in performance or performance related issues. In this regard, contractors should likewise comply with all record-keeping requirements and be sure to retain those records for the applicable amount of time even after performance is complete. Companies should also invest in compliance programs, particularly for newer contractors that might be unfamiliar with the sometimes mysterious government contracting rules and regulations. Attorney General Barr noted the importance of enforcement in a memo to U.S. Attorneys, “The pandemic is dangerous enough without wrongdoers seeking to profit from public panic and this sort of conduct cannot be tolerated.” Thus, enforcement actions are sure to follow so contractors should make sure to have everything documented now to protect yourself against a potential audit, investigation, or claim in your future. About the Author: Heather Mims Associate Attorney Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow. The post COVID-19 Funding Brings Enforcement Risks appeared first on Centre Law & Consulting. View the full article
  12. By David Warner, One of the key provisions of the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the Paycheck Protection Program (PPP). As explained in a prior Centre Blog Post the cornerstone of the PPP is a loan program under which small businesses can borrow the equivalent of two months’ worth of payroll costs. Most importantly, the PPP loan will be forgiven if used for appropriate purposes – i.e., 75% used for payroll costs and 25% available to pay rent and utilities. It would be a massive understatement to refer to the PPP as merely “popular” given the firehose of applications received and the fact that Congress had to add an additional $310 billion to the initial funding of $349 billion. As of April 14, the Small Business Administration (SBA) indicated that a total of 1,680,000 loans for an aggregate total of $268,000,000,000 had been approved. But behind the rush for effectively “free money,” always lurked the specter of abuse and the twin hammers of the federal False Claims Act and False Statements Act. And recently, the federal government has indicated that scrutiny regarding PPP borrowers is coming in the near future. From a compliance perspective, the key issue under PPP is the borrower’s certification that the loan was actually needed. In that regard, the PPP required a prospective borrower to certify that it has “current economic uncertainty that makes this loan request necessary to support the ongoing operations of the applicant.” There was no guidance as to the contours of “economic uncertainty” or “necessary” when the PPP commenced. On April 23, 2020 – twenty (20) days after applications for PPP loans could first be submitted – the SBA and U.S. Department of Treasury finally addressed the issue of “need”. Specifically Question #31 of the Agencies’ Frequently Asked Questions (FAQ) states in relevant part: Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. (Emphasis added.) While the FAQ’s example was a large, publicly traded company, on April 28, 2020 Treasury issued FAQ #37 which provides: Question: Do businesses owned by private companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan? Answer: See response to FAQ #31. In other words, SBA and Treasury have now clarified that all companies with the ability to access other sources of money sufficient for their operations likely do not meet the standard of necessity required for a PPP loan. Underscoring the regulatory scrutiny on the horizon, the same day FAQ #37 was released, Secretary of Treasury Steven Mnuchin announced that the SBA intended to conduct a “full review” of every PPP loan of $2,000,000 or more to confirm that borrowers of such amounts met program requirements before the loan would be forgiven. Perhaps in recognition that more than 1.6 million loans had issued before the standard of necessity was established, the current FAQ also provides that the government will deem a borrower’s certification to have been made in “good faith” if two criteria are met. First, the borrower must have applied for loan before April 23, 2020; AND, the borrower must repay the loan in full by May 7, 2020. Unfortunately, it is unlikely that SBA or Treasury will further refine the concepts of “adequate sources of liquidity” or “significantly detrimental to the business” in the next seven days. As a practical matter, the May 7 date provides an effective off-ramp for PPP borrowers that may have been “coloring a bit outside the lines” with their declaration of need and those who simply favored “free money” over other viable financing options available to them. Given the potential for civil or criminal liability for false certifications, PPP borrowers who believe they may be on the horns of this particular dilemma are well advised to seek counsel. About the Author: David Warner Partner David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices. The post Reckoning (and a May 7 “Mulligan”) On The Horizon For Paycheck Protection Program Abusers appeared first on Centre Law & Consulting. View the full article
  13. By JW Butler With the General Services Administration’s (GSA) release of the Multiple Award Schedule (MAS), there have been many changes to GSA’s systems, and the Federal Acquisition Service (FAS) Sales Reporting Portal (SRP) is no exception. While there are some minor changes to the system, there have been NO changes to the sales reporting and Industrial Funding Fee (IFF) payment requirements. This means now that Quarter Two of Fiscal Year (FY) 2020 has ended, all contractors must complete the sales reporting and IFF requirements by April 30th in accordance with Clause 552.238-80. All non-Transactional Data Reporting (TDR) contractors will submit their sales report and remit the IFF payment for Quarter Two of FY 2020 by April 30th. Contractors that are participating in TDR will complete their monthly sales report for March of 2020 as well as remit their IFF payment for Quarter Two of FY 2020 by April 30th. Logging into the FAS SRP Logging into the FAS SRP has not changed. If you are not currently registered in the FAS SRP you will need to register before logging in. Contractors who are registered will still select contractor login, enter their email address and password, and be taken through the multi-factor authentication process to gain access to the FAS SRP. You do not need a digital certificate to access the FAS SRP. Reporting in the FAS SRP Once you log in, follow the below steps to report your sales. Navigate to the “Reporting” and select your method of reporting, either “Form Entry” or “File Upload”. This will pull up an area where you will be prompted to enter your contract number. If you are using the File Upload method, you will use GSA’s template and upload the file as usual. If you are using the Form Entry method, you will enter the transactional level data if you have accepted TDR or you will enter your quarterly sales by Special Item Number (SIN). Even if you have no sales, you must submit a sales report for the reporting period showing $0. After all your sales are reported correctly, click submit. Your new MAS SINs as well as your legacy Schedule SINs will be shown in the system the first time you login after accepting the MAS Consolidation MASS Modification. For all future sales reporting periods, you will only see the MAS SINs. During this transition reporting period, there are 3 options for reporting sales. You can report all sales for the reporting period under the legacy SIN, for example SIN 132-51 for the legacy Schedule 70. You can report all sales for the reporting period under the new MAS SIN, for example SIN 54151S under the new MAS. (SIN 54151S is the MAS equivalent SIN to legacy SIN 132-51). You can report your sales based on the specific legacy or MAS SIN. This means if you accepted the MAS Consolidation MASS Modification on 3/1/2020, all sales before 3/1/2020 would be reported under legacy SIN 132-51, and all sales after 3/1/2020 would be under MAS SIN 54151S. Remitting Your IFF Payment After you submit your sales reports, follow the below steps to remit your IFF payment. Navigate to the “Payment” tab on the left side of your screen and select “make a payment” You will be prompted to enter your contract number again. You will then be asked if you would like to pay your “Payable Balance” or “Past Due Balance”, select what you would like to pay and click “Pay Now”. This will take you to a separate website where you can select on how to make your IFF payment. Once your payment has been submitted you will be taken back to the FAS SRP where you will see your payment status as pending. If you have any questions on reporting your sales or making your IFF payment, please feel free to reach out to anyone on our GSA Consulting Team and we would be happy to assist you. About the Author: JW Butler Consultant JW Butler is GSA/VA Contract Consultant at Centre Law & Consulting. JW supports the consulting team in preparing various contract modifications, market analysis for products/services, and GSA Advantage catalog updates for Schedule contracts. JW also assists in the preparation of both new Schedule and successful legacy proposals, as well as uses the Schedule Input Program (SIP) to upload catalogs to GSA eLibrary and GSA Advantage. The post MAS Updates to Industrial Funding Fee (IFF) Payments and Sales Reporting Due April 30 appeared first on Centre Law & Consulting. View the full article
  14. By Hon. Jack Delman In XOTECH, LLC v. UNITED STATES, 950 F.3d 1376 (Fed. Cir. 2020) (XO), the Federal Circuit recently affirmed the overturn of an award to a service-disabled-veteran-owned (SDVO) LLC small business on the grounds that the LLC failed to show that its decisions were controlled by the SDV as required by law. THE BACKGROUND In 2017, the Army issued an RFP –set aside for SDVO small business –to provide logistical support for certain Army Reserve facilities. XO submitted a proposal and was awarded the contract. An unsuccessful bidder protested to the SBA, the agency responsible for making eligibility determinations, contending that XO was not eligible to obtain this award as an SDVO small business. The SBA agreed. In brief, the SBA determined that XO failed to show that an SDV “controlled” XO’s decisions as required by law. XO then filed its own protest with the Court of Federal Claims. The court agreed with the SBA. XO then filed this appeal to the Federal Circuit. The Circuit affirmed. THE FEDERAL CIRCUIT’S ANALYSIS In general, for a contractor to have SDVO status it must show SDV ownership and control. Here the issue was SDV “control.” SBA regulations, insofar as pertinent, require that for an LLC to be controlled by an SDV, the SDV must have control over all decisions of the LLC. 13 C.F.R. 125.13(d). Under XO’s “Operating Agreement” (OA), management authority was vested in three managers. Each manager had one vote, and management decisions required a majority. The problem here was that one manager was an SDV, but the other two managers were not. Thus, the SDV manager needed the vote of a non-SDV manager to make decisions. Moreover, the two non-SDV managers – acting as a majority—could make management decisions without regard to the SDV. The Court held that to establish SDV control of the LLC, the SDV must independently control all decisions of the LLC without the need for consent of non-SDVs. This was not the case here. The Court concluded that the SDV did not exercise control of all decisions of the LLC as required by the regulations. Accordingly, XO was ineligible to obtain the award of this contract that was set aside for SDVO small business. XO argued that under its OA the SDV had the authority to unilaterally remove the other managers, and thus the SDV maintained firm control of the business. The Court was not persuaded, stating among other things that this authority did not grant the SDV the power to annul or undo management decisions once they were made. THE TAKEAWAY For years prior, it appears that XO had SDVO small business status– the SDV was the sole member and sole manager of the LLC under its OA. For reasons unexplained in the Court’s opinion, XO amended its OA in 2012 to change XO from a “single manager” company to a “multiple manager” company, which ultimately led to the problems here. OAs may be structured in many ways for many different reasons, but that structure must ensure that the special SDVO legal status of the business is not jeopardized. About the Author: Hon. Jack Delman Retired Judge, Armed Services Board of Contract Appeals Jack Delman served as a judge on the Armed Services Board of Contract Appeals for 29 years and has extensive experience in the adjudication and mediation of large and complex contract disputes, including equitable adjustments, terminations and cost and pricing issues. Jack has extensive experience with claims analysis, FAR and DOD agency regulations and BCA practice and procedure. Have you signed up for our FREE weekly webinars? The post SDV Not In “Control” – Court Affirms Overturn of Set Aside Award! appeared first on Centre Law & Consulting. View the full article
  15. By Tyler Freiberger, Esq., By now, you’ve heard about the CARES Act and the $350 billion put aside for small businesses. I’m assuming the word is out, given Bank of America alone received 10,000 applications in just the first hour it opened it’s online portal to accept the applications. If you haven’t, the short story is that private lenders are beings tasked to provide loans to small businesses that cover 100% of eight weeks’ payroll, nicknamed the “PPP loans.” The best part, these loans will be paid back by the government, not you, as long as you keep your employees and keep their wages (relatively) the same. While everyone scrambles to get an application in, its worth taking a step back and looking at if this is too good to be true. First, its concerning the application is so simple and inclusive. Even independent contractors have the ability to apply for a PPP loan as long as they are not disbarred from business with the government or guilty of a recent felony. The certifications required on the loan application boil down to: That the small business has “current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant;” That the small business will provide the required documents; and That the applicant is not lying. If there is a concern, it lies with number 1 above. During the most dire economic crisis in recent history what business is not experiencing “economic uncertainty?” Unfortunately, there simply is no official guidance on this. Agency guidance on PPP loans don’t acknowledge it, and despite clear confusion on the issue the SBA still has not given a definition in its FAQ published April 8, 2020. So to answer my own question, no, it really appears like the CARES Act has created a program to write checks to small businesses with fairly little risk. That is, if businesses can actually get their application through and the program’s cash keep up with the demand. With this seemingly barn sized open door to the money, its helpful to consider a few restrictions on what you can do with it. Under the SBA’s proposed rule and guidance, 75% of the loan must go to payroll cost and less than 25% could go to rent and utilities. Keep in mind “payroll costs” are capped at $100,000 on an annualized basis for each employee- i.e. if you pay an employee 110,000 annually, the weekly equivalent of that extra 10 thousand would be considered “non-payroll costs” and therefore would be a hit against your loan forgiveness. This cap specifically only applies to cash compensation, not to non-cash benefits. Lastly, independent contractors have to apply for their own loan and cannot be counted in this spend. About the Author: Tyler Freiberger Associate Attorney Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties’ human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia. The post Free Money? Are The Payroll Loans Too Good to Be True? appeared first on Centre Law & Consulting. View the full article
  16. By Julia Coon, As you are completing your annual spring cleaning, do not forget to spruce up your Multiple Award Schedule (MAS) contract. It is important to regularly review and update your MAS contract to ensure your company is in compliance with your contract requirements. Some of the key areas to review when sprucing up your MAS contract are highlighted below. Digital Certificates & Authorized Negotiators: All contractors should ensure their digital certificates are active and the information entered in eMod matches your digital certificate. It is highly recommended that at least two authorized negotiators with signature authority maintain active digital certificates. It is also important to review and adjust, if necessary, the authorized negotiators and contract points of contact. If this information is not updated, you could be missing important communication from your Contracting Officer. Mass Modifications: GSA periodically issues mass modifications to incorporate solicitation changes to your contract. Current Schedule contractors should have received mass modification #A812 for the MAS Consolidation. Ensure that you have reviewed and accepted this mass modification before the deadline of July 31, 2020. Sales Reporting & Industrial Funding Fee (IFF) Payments: All contractors are required to submit either monthly or quarterly sales reports in the FAS Sales Reporting Portal (SRP) within thirty (30) days following the end of the reporting period. The IFF of 0.75% must be remitted to GSA within thirty (30) days following the end of each quarter. Contractors should verify in the FAS SRP that all sales reports and IFF payments have been submitted. Electronic Subcontracting Reporting System (eSRS) Reports: Contractors who are an Other than Small Business and have a small business subcontracting plan incorporated into their contract must submit their Individual Subcontract Reports (ISR) and/or the Summary Subcontract Report (SSR). Contractors with a commercial subcontracting plan must submit one SSR for the 10/01 – 09/30 period by October 30th. Contractors with individual subcontracting plans, must submit the ISR for the 10/01 – 03/31 period by April 30th and the ISR for the 04/01 – 09/30 period and the SSR for the 10/01 – 09/30 period by October 30th. GSA Advantage Pricelist: The recent MAS Consolidation mass modification #A812 requires contractors to upload a new price list reflecting the new Multiple Award Schedule and Special Item Numbers (SINs) within thirty (30) days after acceptance of the mass modification. If you have already accepted the mass modification, ensure you have submitted a new price list in the Schedules Input Program (SIP). Contract Modifications: Contractors should continually review their product/service offerings, pricing, and terms and conditions on contract. If any updates are required, a formal modification must be submitted in eMod to your Contracting Officer. GSA recently released modification guidance for the Multiple Award Schedule that all contractors must follow when preparing new modifications. Centre’s Consulting Team is ready to assist you with cleaning up your MAS contract. If you have any questions, you may reach out to us here. About the Author: Julia Coon Consultant Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA price lists. The post Spring Cleaning: It’s Time to Spruce Up Your Multiple Award Schedule appeared first on Centre Law & Consulting. View the full article
  17. By JW Butler Multiple Award Schedule Modification Guidance On March 6, 2020, GSA released the final MAS Modification Guidance package. The new MAS Modification Guidance package can be found here. GSA previously had different modification guidelines for the 24 different legacy Schedules, but with the release of this modification package all contractors under the new MAS will follow the same guidelines for modifications. There are still specific instructions for each type of modification, but regardless of the modification type all modification cover letters must address the following administrative information: Schedule Refreshes/MASS Modifications – Contractors will need to provide a statement that all MASS Modifications have been accepted in the MASS Modification System. Subcontracting Plans and Reporting – Contractors will need to confirm a valid Small Business Subcontracting Plan is incorporated into the contract and that all eSRS reports have been completed on time. This is not applicable for contractors who are small businesses. FAS Sales Reporting Portal (SRP) – Contractors will need to confirm all GSA sales have been reported in the FAS SRP, as well as the Industrial Funding Fee (IFF) payments have been completed in a timely manner. The MAS modification guidance package also brought some major changes to the price proposal templates and how they are to be submitted. The modification package includes two price proposal templates, one for products and one for services. Each price proposal template will require the below two tabs to be completed. Tab A – This tab will include ALL offerings currently awarded on the Schedule as well as any of the adjustments that will be made as a result of the modification. The purpose of this is to make it easier for contractors to have a database of all offerings for when an Industrial Operations Analyst (IOA) assessment happens. This will also allow GSA and contractors to more easily review what is on Schedule. Tab B – This tab will include ONLY items that are impacted by the modification. For example, if you are adding products only the products being added should be included in this tab, and if you are submitting a service/product descriptive change, only the effected items and their updated descriptions should be included. Other major takeaways from the MAS Modification Guidance: A revised GSA Advantage catalog in accordance with I-FSS-600 reflecting the modification changes highlighted in yellow is now required for almost all modification requests, other than administrative and certain technical modifications. The cover letters for modifications are now required to be much more in depth. There is now specific information that must be included in your cover letter for each modification. Contractors will need to be sure to fully read the modification checklist applicable to the specific modification they are preparing to ensure all necessary information has been included. Documentation requirements for many of the modifications have also changed. Be sure to carefully read all notes in the modification checklists to ensure all documents required for the modification are included. COVID-19 Update: Due to the concerns of COVID-19, GSA Advantage has seen an influx of orders and sent a warning on March 16 advising customers to contact the vendor(s) of products they are purchasing to ensure they have the stock/availability to fill the order. Because of the lowered availability, the General Services Administration (GSA) has received reports of companies claiming to be GSA vendors attempting to exploit concerns customers have regarding the COVID-19 pandemic and the availability of supplies. If you receive a notice that a company is a GSA vendor selling a specific product you are looking for, please verify and confirm the prices they provide you are in GSA Advantage or validate their information in GSA eLibrary. If you have concerns you can ask the company to provide their contractor information page in GSA eLibrary to view their full list of offerings to verify their information. Even if the information seems to be credible, take a moment to verify. If contractors have any additional questions in submitting a modification using the new MAS Modification Guidance, please feel free to reach out to anyone on our Consulting team and we would be happy to assist you. About the Author: JW Butler Consultant JW Butler is GSA/VA Contract Consultant at Centre Law & Consulting. JW supports the consulting team in preparing various contract modifications, market analysis for products/services, and GSA Advantage catalog updates for Schedule contracts. JW also assists in the preparation of both new Schedule and successful legacy proposals, as well as uses the Schedule Input Program (SIP) to upload catalogs to GSA eLibrary and GSA Advantage. The post Single Multiple Award Schedule (MAS) Modification Guidance Package Released and COVID-19 Update appeared first on Centre Law & Consulting. View the full article
  18. By David Warner, Last week, the National Labor Relations Board (NLRB) published its final rule setting out the standards for determining when two entities might both be considered an employer of an individual for purposes of coverage under the federal National Labor Relations Act (NLRA). Under the NLRB’s promulgated rule, entities will be considered joint employers only if “the two share or codetermine the employees’ essential terms and conditions of employment, which are exclusively defined as wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction.” Joint employment status is an important concept insofar as it exposes both employing entities to obligations under federal law. For example, for purposes of the NLRA if an employee is employed by two entities, both might be subject to union organizing and bargaining activity on that individual’s behalf. Similarly, for purposes of anti-discrimination statues, an employee of two entities would have the right to pursue claims under Title VII, the Americans with Disabilities Act (ADA) and other authorities against both employers. The concept is particularly important to government contractors who often augment their own workforces with that of subcontractors and staffing firms. The NLRB’s new rule comes on the heels of similar rule making out of the U.S. Department of Labor’s Wage-Hour Division (WHD), which on January 12, 2020 announced its own joint employer standard, which is scheduled to take effect on March 16, 2020. In addition to providing several examples applying the guidance in various factual settings, the WHD’s rule: specifies that when an employee performs work for the employer that simultaneously benefits another person, that person will be considered a joint employer when that person is acting directly or indirectly in the interest of the employer in relation to the employee; provides a four-factor balancing test to determine when a person is acting directly or indirectly in the interest of an employer in relation to the employee; clarifies that an employee’s “economic dependence” on a potential joint employer does not determine whether it is a joint employer under the FLSA; and specifies that an employer’s franchisor, brand and supply, or similar business model and certain contractual agreements or business practices do not make joint employer status under the FLSA more or less likely. The referenced four-factor test is taken from an earlier decision of the U.S. Court of Appeals for the Ninth Circuit, which examine whether a given entity: (1) hires or fires the employee; (2) supervises and controls the employee’s work schedule or conditions of employment to a substantial degree; (3) determines the employee’s rate and method of payment; and (4) maintains the employee’s employment records. No single factor is dispositive in determining joint employer status; however, the WHD’s rule does state that “maintenance of employment records factor alone does not demonstrate joint employer status.” Not to be left behind, late last year the Equal Employment Opportunity Commission (EEOC) publicly indicated its intent to engage in rule making on the question of joint employment under the various anti-discrimination statutes which the agency enforces. Although the initial rule tracking data suggested that a notice of proposed rulemaking would issue in December, to date EEOC has not yet formally engaged that process. While it would of course be easier for contractors and all employers to have a single federal standard to determine joint employer status, the varying standards are necessary because of the varying definitions of who is an “employer” under the varying federal statutes at issue. Thus, an “employer” for purposes of the NLRA may not be an employer for purposes of the FLSA, Title VII, ADA, etc. That said, it does appear that the varying efforts are geared toward more narrowly defining the scope of joint employment, which is a boon to contractors who often utilize resources other than their own employees in performing government work. Proof of the “pro-employer” aspect of the recent rule-making is perhaps best reflected in a recent lawsuit filed in the U.S. District Court for the Southern District of New York filed by seventeen (17) Democratic attorney generals of sixteen states and the District of Columbia asserting that the WHD’s final rule concerning joint employment is arbitrary and capricious under the federal Administrative Procedure Act. Heavily politicized litigation over labor policy in a presidential election year? Wherever have we seen that before?? About the Author: David Warner Partner David Warner is a seasoned legal counselor with extensive experience in the resolution and litigation of complex employment and business disputes. His practice is focused on the government contractor, nonprofit, and hospitality industries. David leads Centre’s audit, investigation, and litigation practices. The post Trump Administration Continues To Align “Joint Employer” Standard Government-Wide appeared first on Centre Law & Consulting. View the full article
  19. By Edward W. Bailey, Section 7 of the National Labor Relations Act (“NLRA”) guarantees employees the right to organize and collectively bargain through representatives and applies to a wide range of employer conduct including the contents of employee handbooks. Until recently, the National Labor Relations Board’s (“NLRB”) standard for determining whether employee handbooks violated the NLRA was relatively employee friendly and found handbook policies to be unlawful if they could merely be “reasonably construe[d]” as prohibiting activity protected by the NLRA. However, in 2017, the NLRB’s decision in The Boeing Co., 365 NLRB No. 154 (Dec. 14, 2017) created a new standard under which an employee handbook policy will be deemed unlawful only if “the nature and extent of the potential impact on NLRA rights” outweighs the “legitimate justifications associated with the rule.” Despite the new standard, some Administrative Law Judges (“ALJ”) have continued to find even seemingly innocuous handbook policies to infringe on employees’ rights under the NLRA. For example, a recent ALJ decision went so far as to find an employer’s handbook unlawful for including a policy that simply prohibited employees from using the employer’s email system for personal use. See Argos USA LLC d/b/a Argos Ready Mix, LLC, 369 NLRB No. 26 (Feb. 5, 2020). However, to the relief of employers across the nation, the NLRB made it clear that, pursuant to Boeing, the ALJ in Argos went too far. Thus, the NLRB overturned the ALJ’s decision on the ground that the employer was a “typical workplace” and did not prevent its employees from communicating verbally or prohibit the physical distribution of literature concerning their rights protected by the NLRA. The NLRB also applied Boeing to overturn the ALJ in two other respects: The Handbook’s Confidentiality Agreement Applying Boeing, the ALJ determined that employees would reasonably interpret the Confidentiality Agreement to cover the employees’ own wages and personal information. Alternatively, in overturning the ALJ’s decision, the NLRB found it dispositive that the agreement “clearly appl[ied]” only to the employer’s own proprietary business information. In making this determination, the NLRB focused on language in the agreement that stated that employees may not disclose “confidential company information.” Moreover, the NLRB found that nothing in the confidentiality agreement suggested it applied to employees’ wages, contact information, or other terms and conditions of employment protected by the NLRA. The Handbook’s Cell Phone Policy The ALJ had also found the employer’s cell phone policy, which prohibited its drivers from possessing cell phones while operating the employer’s commercial vehicles, to violate the NLRA because it could “potentially” interfere with their rights protected by the NLRA. Alternatively, in upholding the employer’s policy, the NLRB looked primarily to the policy’s legitimate purpose to protect its drivers and the general public. Moreover, as with the employer’s electronic communications policy, the policy was limited in scope and did not prevent employees from utilizing other modes of communication to discuss their NLRA protected rights. In sum, this recent decision from the NLRB brings much needed reassurance to employers that they will not be penalized for drafting reasonable workplace policies that are narrowly directed towards furthering their legitimate business interests such as employee safety, efficient utilization of company resources, and protection of confidential information. About the Author: Edward W. Bailey Associate Attorney Ed Bailey is an associate attorney whose practice focuses on government contracts law, employment law, and litigation. Ed recently graduated cum laude from George Mason University’s Antonin Scalia Law School where he was a member of the Law Review. . . The post Good News for Employers! NLRB Upholds Employee Handbook Policies Tailored to Legitimate Business Purposes appeared first on Centre Law & Consulting. View the full article
  20. By Hon. Jack Delman The Court of Federal Claims recently awarded an equitable adjustment (EA) to a contractor providing reimbursement of legal fees to successfully defend a False Claims Act (FCA) action. The Tolliver Group v. United States, No. 17-1763C, 1/22/20. The Facts In 2011 the Army awarded the contractor a firm fixed price level of effort contract to develop and deliver technical manuals for an Army mine clearing vehicle. The PWS required the Army to deliver government furnished property (GFP) to the contractor after award, including a technical data package (TDP) to facilitate performance of the contract. The Army never delivered the GFP but insisted that the contractor continue to perform. The contractor incurred additional costs. The Army ultimately recognized these additional costs and in 2013 issued Mod 8 to compensate the contractor. In 2014, a subcontractor employee (relator) filed a FCA suit against the contractor, contending that the contractor wrongfully certified compliance with the TDP despite never having received it. The Army was of course fully aware of these facts, and not surprisingly the United States refused to intervene in the action. The FCA suit was dismissed and affirmed on appeal. However, the FCA litigation extended over three years and the contractor incurred huge legal fees. In 2017, the contractor submitted a claim to the Army CO seeking an equitable adjustment under the Army contract for $195,889 for these legal fees. The CO denied the claim, and the contractor filed this action with the court. The Court’s Analysis In brief, the court ruled that the Army’ s defective/imperfect specification breached the implied warranty of the specifications which led to the filing of the FCA action and the legal fees for which the Army was responsible. The Court also held that the relator was not akin to a third party in accordance with those cases that forbid a contractor from recovering costs to defend against third party claims. The court held that an EA — presumably under the Changes clause of the Army contract– was the appropriate legal basis to award this relief. The court remanded the case to the parties to address the reasonableness of the amount requested. The Impact From a contractor perspective, this is a significant case that serves notice that the government will be held responsible for all the legal consequences of its contract failures — in this case the breach of its implied warranty and the contractor legal costs that flowed therefrom. From the government’s perspective, this is a significant case that exposes the government to a liability, i.e., the FCA legal fees, that arguably were not foreseeable. Will the government appeal? Stay tuned! About the Author: Hon. Jack Delman Retired Judge, Armed Services Board of Contract Appeals Jack Delman served as a judge on the Armed Services Board of Contract Appeals for 29 years and has extensive experience in the adjudication and mediation of large and complex contract disputes, including equitable adjustments, terminations and cost and pricing issues. Jack has extensive experience with claims analysis, FAR and DOD agency regulations and BCA practice and procedure. The post Court Awards Equitable Adjustment for Legal Fees to Defend Qui Tam Suit! appeared first on Centre Law & Consulting. View the full article
  21. By Tyler Freiberger, Esq., Nearly half a century after passage of the Age Discrimination in Employment Act (ADEA), the American workplace remains confused as to the line between an innocent joke and potential legal exposure. While jokes involving race at last have found their way to the “hard no” category, the debate over pop culture trends like “Ok Boomer” has made its way to the U.S. Supreme Court. Consequently, both employers and employees could benefit from a review of where the law stands on jokes in the workplace. Spoiler: a “don’t be a jerk policy” goes a long way. Actor Adam Driver recently appear on Saturday Night Live playing his Star Wars character, Kylo Ren, in yet another “Undercover Boss” spoof. The biggest laugh from the clip comes when Driver’s character is trying, unsuccessfully, to fit in with young interns. Specifically, when introducing himself to the other interns, Driver spurts out “OK BOOMER” (the joke being that the phrase is such a well-known part of internet pop culture that it has become an out of touch boss’s way to try and connect with the kids). While certainly unintentional, the clip is eerily similar to a recent hypothetical posed by Chief Justice Roberts in Babb v. Wilkie, a case considering the causation standard under the Age Discrimination in Employment Act (ADEA). At issue in Babb was whether federal employees are entitled to the same rights as employees of private companies or state governments, i.e., whether they can successfully bring an ADEA suit if they can show an adverse action would not have been taken against them “but for” the fact that they are more than 40 years old. During oral argument, Justice Roberts asked, “Let’s say in the course of the, you know, weeks-long [hiring] process, you know, [there is] one comment about age,” “the hiring person is younger, [and] says, you know, ‘OK, boomer’ … once to the applicant.” Following a pause for laughter, the employee’s counsel responded: “I think if the decision makers are sitting around the table and they say, we’ve got Candidate A who’s 35 and we’ve got Candidate B who’s 55 and is a boomer and is probably tired and, you know, doesn’t have a lot of computer skills, I think that absolutely would be actionable.” While the Court has not issued its opinion yet, counsel’s response may well be a good predictor of how the Court eventually rules, i.e., an actionable claim of age discrimination requires more than simply a joke about an employee’s generation. This makes sense, as workplace discrimination laws were never meant to be a “general civility code for the American workplace.” Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75, 80 (1998). Instead, they are in place to put a check on employment actions taken specifically because of a person’s protected characteristic/status. This is an important distinction to keep in mind when discussing generational issues. While comments like “ok boomer” or “millennial snowflake” are certainly pejorative , they should not be confused with racial slurs. In the end, it’s probably not a great idea to try and bring internet meme culture into the office but rude Twitter responses won’t support a lawsuit on their own. About the Author: Tyler Freiberger Associate Attorney Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law and litigation. He has successfully litigated employment issues before the EEOC, MSPB, local counties’ human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia. The post “Ok Boomer”- Cringy But Not Discrimination (Yet) appeared first on Centre Law & Consulting. View the full article
  22. By Julia Coon, The General Services Administration (GSA) has begun issuing the mass modifications for Phase II of the Multiple Award Schedule consolidation. Current GSA contract holders will be receiving a mass modification for each contract updating the Special Item Numbers (SINs) and terms and conditions in accordance with the new consolidated Multiple Award Schedule (MAS). Your contract number, period of performance, and items on your contract will NOT change as a result of this mass modification. Contractors will have until July 31, 2020 to accept the mass modification. If you are in the process of exercising an option for your current contract, GSA recommends you consult with your Contracting Officer (CO) before accepting the mass modification. If you do not respond to the mass modification by July 31, 2020, GSA will remove your offerings from GSA eLibrary and GSA Advantage. Below is the release schedule for the Phase II mass modifications. Contractors with pending “Add SIN” or “Delete SIN” modifications in eMod will not receive the mass modification until the pending “Add SIN” or “Delete SIN” modification is accepted, rejected, or withdrawn. Phase II Mass Modification Release Date Legacy Schedules Impacted 1/31/2020 03FAC, 23V, 36, 48, 51V, 58I, 599 2/3/2020 00CORP 2/4/2020 00CORP 2/5/2020 IT70 2/6/2020 IT70 2/7/2020 71, 71 IIK, 72, 73, 56, 66, 67 2/10/2020 736, 738X, 75, 751 2/11/2020 76, 78, 81 I B, 84 BEFORE Accepting the Mass Modification: Understand the new SIN mappings and terms and conditions in the MAS solicitation Compare the North American Industry Classification System (NAICS) codes in your System for Award Management (SAM) registration against the new MAS solicitation to ensure you have the appropriate NAICS for the new SIN structure Verify if there are any exceptions taken in your current contract and determine if you intend to keep those exceptions. If so, you will need to resubmit any exceptions in this mass modification. Ensure there are no pending add or delete SIN modifications in eMod AFTER Accepting the Mass Modification: Check to confirm your contract is showing in eLibrary under the new MAS contract under the correct SINs The following legacy SINs have a mapping to more than one new SIN in the new MAS: 096 4N, 096 3N, 874 4, 096 2N, 871 1, 871 2, 871 3, 871 4, 871 211. Work with your CO to delete any new SINs that you do not need. Within 30 days, initiate a “merge” of the SINs in the Schedules Input Program (SIP) and update the textfile in accordance with I-FSS-600 and the new SIN structure. NOTE: Contractors that offer products and have legacy SINs that map to more than one new SIN may not be able to use the “merge” feature in SIP and will need to submit new SIP files. Update any marketing materials to reflect the new MAS If you have any questions on the Phase II mass modification, please contact our GSA Consulting team at info@centrelawgroup.com or call us at 703-288-2800. About the Author: Julia Coon Consultant Julia Coon is GSA and VA Contract Consultant at Centre Law & Consulting. Julia works with the GSA/VA team in preparing new schedule proposals and post-award contract administration. She has experience in producing schedule renewal packages, various modification packages, small business subcontracting plans, and updates to GSA price lists. The post Current GSA Contractors Alert – Consolidation Mass Modification Rollout Begins appeared first on Centre Law & Consulting. View the full article
  23. By William Weisberg, Esq., A dreary day in late January–too late for a “Predictions for the Coming year” blog post, and a little too early for “Emerging Trends in Procurement So Far This year.” So, a few thoughts, (or maybe predictions, anyway): The Amazon JEDI protest is going to come to a head sooner than anyone thought. DOD awarded the JEDI Cloud contract to Microsoft, “because of/in spite of” the President’s…interest. Amazon protested to the U.S. Court of Federal Claims (“COFC”). The Court was not forced to to decide whether to issue a Temporary Restraining Order (“TRO”) stopping performance, because DOD agreed to not really do anything, or have Microsoft do anything, that couldn’t be easily undone if Amazon won the protest. (This is actually pretty common in COFC protests.) That semi-standstill is over; DOD and Microsoft are moving forward, and Amazon formally requested the Judge to issue a TRO. Here is why this is a big deal: the key legal standard for a TRO is that the plaintiff (Amazon) have a “substantial likelihood of success on the merits.” That means the Judge’s decision on Amazon’s TRO motion will telegraph whether or not Amazon is likely to win the protest. (Many protesters drop their protest if their TRO motion is denied; the government often settles cases where the protester’s TRO motion is granted.) The current trend away from LPTA procurements will generate more protests. Why? For all its faults (don’t get me started), LPTA is, from a source selection standpoint, pretty… Remember how relaxed it was taking a class Pass/Fail? Sort of like that. But, the more Best Value procurements you have, the more subjective judgement calls you have, and the greater FAR and GAO case law strictures you have on how those judgement calls get made. Bottom line: the protest docket will tick up. The government will continue getting more aggressive in going after greater rights in contractor’s technical data. This is a little bit like Back to the Future; those of us old enough to have practiced in the 1980s remember how the government in general, and DOD in particular, used the ASBCA decision in Bell Helicopter Textron as a blueprint to claim unlimited rights in technical data when there was some government money involved. (FAR part 27/DFARS part 227 write all of this down.) After all these years, the government seems to be realizing that variations of government purpose license rights work just as well, particularly if the government defines “government” very broadly. GAO helped with a couple of recent protest decisions allowing solicitations with requirements for the contractors to provide the government broad rights in technical data. Momentum is building… And, finally, since we are heading into an election season, we will see the return of a perennial procurement word: “wastefraudandabuse.” In its procurement use as one big word, every candidate will discover that stopping this one word is the way to balance the budget and reinvent government. (h/t Al Gore.) (Bonus use of the word: health care costs.) About the Author: William Weisberg, Esq Of Counsel William Weisberg is a government contracts attorney with 30 years of experience. Bill received his undergraduate degree from the University of Virginia (where he was an Echols Scholar) in 1983 and his law degree from the George Washington University in 1986. Bill practiced with large international law firms for over 25 years, the last 10 of which he led his firms’ Government Contract and Grant practice groups. Bill formed his own boutique government contract firm in 2013. The post Random Procurement Musings in the Dog Days of January appeared first on Centre Law & Consulting. View the full article
  24. By Edward W. Bailey, Soon after the end of fiscal year 2019, the Department of Labor (“DOL”) reported that its Wage and Hour Division (“WHD”) had made record breaking recoveries against employers. In its year-end report, the DOL revealed that it collected a remarkable $322 million in back-wages owed to workers. WHD’s new administrator, Cheryl Stanton, stated the following in response to the news: We are delivering more back wages for workers than ever before, and we are steadfastly eliminating any unfair economic advantage employers may try to gain by skirting the rules. We are protecting those who do the right thing, pay their employees what they have legally earned, and operate in compliance. True to Ms. Stanton’s comment, the DOL’s report did not only tout its enforcement but also the guidance the agency provides to employers to help them stay in compliance. For example, in its report, the DOL noted that it hosted over 3,700 educational events for employers in fiscal year 2019 and mentioned the educational resources it provides employers via its website. These lectures and guidance materials provided by the DOL can be a great way to keep up with employer’s ever-evolving wage and hour obligations. This is particularly highlighted by recent changes to certain critical exemptions from the Fair Labor Standard Act’s (“FLSA”) overtime requirements. For example, as of January 1, 2020, the salary threshold that most salaried employees must earn to be exempt from overtime increased, for the first time since 2004, to $35,568 from $23,660. Likewise, the threshold for “highly compensated employees” rose from $100,000 to $107,000. However, while government resources can provide basic guidance on what the state of the law is, the best thing employers can do to protect themselves from the DOL’s ever-increasing enforcement activity is to conduct a self-audit. Key items to include in any such audit are: Verifying whether your workers are independent contractors or employees by closely examining how much control you have over their day-to-day tasks, where they are performing their work, and whether they are responsible for providing their own work-materials Reviewing time-keeping systems and procedures to ensure that non-exempt employees are being properly compensated. For example, a common pitfall is to automatically withhold compensation to employees for scheduled meals and breaks without confirming that that those breaks were actually taken Closely examining the roles of employees who you have found to be exempt by reviewing their job descriptions to ensure that it actually reflects the work the employee is performing. Likewise, as discussed above, ensure that the relevant salary amounts are met before exempting an employee. Finally, whenever possible, an audit should be overseen by either in-house or outside counsel in order to protect the audit’s findings under attorney-client privilege. Should you have any concerns regarding your organization’s wage and hour obligations, be sure to contact us at http://centrelawgroup.com/contact/. About the Author: Edward W. Bailey Associate Attorney Ed Bailey is an associate attorney whose practice focuses on government contracts law, employment law, and litigation. Ed recently graduated cum laude from George Mason University’s Antonin Scalia Law School where he was a member of the Law Review. The post DOL Breaks Records in Wage & Hour Enforcement: How Employers Can Protect Themselves in 2020 appeared first on Centre Law & Consulting. View the full article
  25. By Heather Mims, Esq. The Government Accountability Office (“GAO”) published a report on November 25, 2019 which recommended that the Department of Defense (“DOD”) should include an assessment of risks related to contractor ownership as part of its ongoing efforts to conduct fraud risk assessments. See Ongoing DOD Fraud Risk Assessment Efforts Should Include Contractor Ownership. In coming to this recommendation, the GAO reviewed thirty-two adjudicated cases between 2012 and 2018, including cases where contractors created the appearance of competition by operating through multiple companies owned by the same entity, contractors received contracts they were not eligible to receive, and, perhaps most egregiously, a foreign manufacturer received sensitive information and produced faulty equipment through a U.S.-based company. In one case, a contractor (which should have been deemed ineligible to contract with DOD) illegally exported sensitive military data and provided defective and nonconforming parts that led to the grounding of 47 fighter aircraft. These thirty-two contractors used shell companies to help obscure their overseas ties and the fact that some were making U.S. military equipment abroad, where military technical drawings can leak out. This problem could well be more widespread than the GAO Report lets on – the GAO Report was not intended to measure or estimate the scope of DOD contractors with opaque ownership. Indeed, DOD generally accounts for about two-thirds of federal contracting activity, awarding over $350 billion in contracts, with over 570,000 new contracts, to approximately 38,000 companies. DOD’s extensive contracting demonstrates the need for it to address contractor ownership issues. DOD isn’t the only agency in hot water. Another recent GAO Report, Agencies and OMB Need to Continue Implementing Recommendations on Acquisitions, Operations, and Cybersecurity, found that since 2010, agencies have only implemented 61% of the GAO’s 1,320 recommendations on IT acquisitions and operations and 76% of the 3,323 recommendations on cybersecurity. However, the GAO gave itself a pat on the back in its Performance and Accountability Report Fiscal Year 2019, in which it noted that the GAO saved a “record” $214.7 billion for taxpayers in fiscal year 2019 by preventing payment errors, improving the efficiency and effectiveness of federal programs, and preventing fraud. About the Author: Heather Mims Associate Attorney Heather Mims is an associate attorney at Centre Law & Consulting. Her practice is primarily focused on government contracts law, employment law, and litigation. Heather graduated magna cum laude from the George Mason School of Law where she was the Senior Research Editor for the Law Review and a Writing Fellow. The post GAO Finds That DOD Faced Fraud and National Security Risks From Contracting in 2019 appeared first on Centre Law & Consulting. View the full article
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