Government Contracts Advisor | Legal, Legislative & Industry Insights

San Diego Briefing

July 17th, 2014 Posted in Compliance, Events, Government Contracts Briefing Series By Mike Rizzo

This post was authored by Mike Rizzo.

We are excited to announce that we will be back in San Diego on September 10 to perform our annual Government Contracts briefing. The event will take place at the spectacular Grand Del Mar. We have not yet decided on whether the briefing will be all day or morning only. Either way, we wIll showcase a lineup of speakers from several of McKenna Long’s key practice areas across Southern California. We will address government contracts, real estate, corporate and IP issues that impact contractors in the San Diego community. We are still finalizing the agenda, but the discussions will focus on compliance and risk issues. Continue Reading

Unmanned Aircraft Systems (UAS) Practice Group

July 17th, 2014 Posted in Events By Mark Dombroff

Webinar

Section 333 Approvals:

Preparing, Filing and Obtaining Them

September 8, 2014

1:00 – 3:00 pm EDT

RSVP HERE!

The Federal Aviation Administration (FAA) is currently scheduled to issue its small UAS Notice of Proposed Rulemaking (NPRM) in the fall of this year. This will mark the beginning of a formal rulemaking process that will last one to two years. In the meantime, the FAA has announced that it will accept applications under Section 333 of the FAA Modernization and Reform Act of 2012 to permit certain commercial UAS operations prior to the completion of the formal rulemaking process. Continue Reading

Proposed Update to DFARS Business Systems Rule Would Impose Significant Burden on Contractors to Self-Assess and Self-Report on System Compliance

July 16th, 2014 Posted in Business Systems, Compliance By Michael J. McGuinn

This post was co-authored by Michael McGuinn and Thomas Lemmer.

On Tuesday, July 15th, DOD issued a proposed rule that would update the DFARS Business Systems Rule to require contractors to self-assess and report on business system compliance. Contractors with estimating systems, accounting systems, and material management and accounting systems subject to the Business Systems Rule requirements would be required to provide a report on compliance with the relevant system criteria. These same systems also would be subject to a triennial audit by an independent contractor-selected Certified Public Accountant (“CPA”) to assess the contractor’s compliance with the applicable system criteria. Continue Reading

Final Rule issued for USML Category XI (Military Electronics)

July 14th, 2014 Posted in Export Controls By Jason Silverman

Export control reform took another step forward earlier this month, with the publication of the State and Commerce final rules relating to military electronics (USML Category XI). As with previous reform initiatives, the changes make the USML list of controlled items a positive one rather than a catch-all and moves certain formerly ITAR-controlled items to the Commerce Control List. Most of the changes will take effect December 30, 2014. The State Department rule also makes certain changes to Category VIII (Aircraft) that will take effect in August. These relate to wing folding systems. Links to the new rules are below.

https://www.federalregister.gov/articles/2014/07/01/2014-14683/revisions-to-the-export-administration-regulations-ear-control-of-military-electronic-equipment-and

https://www.federalregister.gov/articles/2014/07/01/2014-14681/amendment-to-the-international-traffic-in-arms-regulations-united-states-munitions-list-category-xi

Supreme Court to Decide Two Key False Claims Act Issues

July 11th, 2014 Posted in False Claims Act By Jason Workmaster

This post was co-authored by Sandra B. Wick Mulvany, Jason N. Workmaster and Mason J. Smith.

On July 1, the U.S. Supreme Court agreed to hear KBR’s appeal in KBR, Inc. v. United States ex rel. Carter (No. 12-1011). This sets the stage for a high court ruling that will clarify the applicability of the Wartime Suspension of Limitations Act to the False Claims Act’s (“FCA”) six-year statute of limitations and whether the FCA’s “first-to-file” rule will continue to preclude new waves of copycat complaints after original FCA claims with substantially similar allegations are dismissed or settled. The granted certiorari petition can be found here.

ASBCA Decision Finds that Contractor’s CDA Claim is Not Time Barred; Serves as Useful Teaching Tool

July 3rd, 2014 Posted in Claims & Disputes By Justin M. Ganderson

This holiday weekend presents a good time to reflect on the recent uptick in jurisdictional decisions before the Court of Federal Claims and the Boards of Contract Appeals related to the Contract Disputes Act’s (CDA) six-year statute of limitations. Most recently, we reported about the ASBCA’s decision in Laguna Constr. Co., Inc., ASBCA No. 58569 (May 29, 2014), which held that the government’s $3.8 million claim was time-barred by CDA’s statute of limitations. There the ASCBA found that the government’s claim accrued when DCAA issued an audit report more than six years prior to the final decision being issued. Now, in Zomford Company, ASBCA No. 59065 (June 10, 2014), the government argues that the contractor’s claim should be time-barred. As will be discussed below, this decision serves as a teaching tool with respect to the CDA statute of limitations and document preservation issues.

Here the contractor performed additional work pursuant to a contract modification issued on January 5, 2007. On January 21, 2007, the contacting officer emailed the contractor a notice terminating the contract and stating that “[n]o payments will be made” thereunder. (Apparently the contractor never received the termination notice.) Then in a March 9, 2007 email, the contractor informed the contracting officer that it had completed all work under the contract and attached an invoice. Another contracting officer replied, indicating that “payment has been sent out, please allow 30 days [i.e., around April 9, 2007] for payment to post.” Because no payment was made, the contractor submitted a claim on February 5, 2013 to recover for the work it performed.

GSA Discusses the Road Ahead for Federal Property and Public Private Partnerships

July 2nd, 2014 Posted in Public Private Partnerships By Justin M. Ganderson

This blog post was co-authored by Justin Ganderson and John Sorrenti.

Last month, we attended the 2014 Federal Property and Private/Public Partnership Summit in Washington, DC. Norman Dong (Commissioner, Public Building Service, GSA) and Julia Hudson (Regional Administrator for the National Capital Region, GSA), along with other panelists, discussed the impact of the current fiscal environment on real property spending, and provided important insights about the road ahead over the next fiscal for real property transactions and PPPs, including:

COFC Decision Provides Valuable Lessons to Contractors About Termination for Defaults, Fixed Price Contracts and Fraud Counterclaims

June 26th, 2014 Posted in Claims & Disputes, Contract Terminations & Restructures By Justin M. Ganderson

This blog post was written by Justin Ganderson and Beth Ferrell.

Those looking for an intriguing summer read should look no further than Judge Bruggink’s 84-page opinion in Liquidating Trustee Ester Du Val of Ki Liquidation, Inc. v. United States, CoFC No. 06-465C (June 2014). This story stems from the government’s decision to terminate for default Kullman Industries’ (Kullman) contract to build the U.S. Embassy compound in Dushanbe, Tajikstan. After trial, the Court of Federal Claims ruled on a myriad of claims. Pertinently, it (i) upheld the government’s termination for default decision; (ii) denied the Kullman’s $4.3 million claim for geotechnical work allegedly performed outside the terms of the contract; and (iii) granted the government’s fraud counterclaims based on the violations of the False Claims Act. This decision provides a few valuable lessons:

MLA Team Attends Camp Pendleton Day

June 25th, 2014 Posted in Events By Hillary Hulce

Attorneys Mark Budwig, Laurence Phillips and Richard Oliver (left to right) pose at the MLA exhibitor table (also in attendance, but not pictured, Brian Cruz.)

On June 19, 2014 the Orange County and San Diego posts of the Society of Military Engineers (SAME) hosted Camp Pendleton Day at the U.S. Marine Corps Base in Oceanside, California. For the fourth consecutive year, the McKenna, Long & Aldridge Government Contracts Practice Group participated as an exhibitor.

Brigadier General John W. Bullard, Jr. discusses his efforts regarding, “Sustaining Camp Pendleton’s Mission.”

During the event, nearly 500 participants gathered at the Pacific Views Event Center to network and learn the status of regional Marine Corps opportunities, federal incentives and future platforms at Camp Pendleton, MCIWEST and NAVFAC Southwest. This year’s theme was “Right Place, Right Time.” The speakers included Colonel David P. Casey, Assistant Chief of Staff, Plans, First Marine Expeditionary Force, and Brigadier General John W. Bullard, Jr. Commanding General MCI West – MCB Camp Pendleton, amongst others.

Proposed FAR Rule Seeks to Expand Counterfeit Reporting Obligations

June 11th, 2014 Posted in Compliance, Procurement Issues By Michael J. McGuinn

This blog post was co-authored by Mike McGuinn, Phil Seckman and Chris Myers.

Yesterday, the FAR Council issued a proposed rule requiring expanded contractor reporting of nonconforming items. See 79 Fed. Reg. 33164. The proposed FAR rule would require reporting for counterfeit electronic items and for certain major or critical nonconforming items. The proposed rule would broadly apply to contractors and subcontractors at any tier providing supplies to the Government, including commercial item and small business vendors.

The proposed rule creates a number of new compliance obligations, including:

GIDEP Reporting
CO Reporting
GIDEP Screening
Mandatory Flowdown

Contractors and subcontractors potentially affected by this proposed rule are strongly encouraged to consider submitting comments on the proposed rule. For additional information please see our advisory here.