Construction Law and Federal Contracting Breakfast Series: Miller Act (Payment Bond) Actions on Federal Projects

Join us on March 12^th at 8:30 am for the third briefing of the six-part “Construction Law and Federal Contracting” breakfast series hosted by MLA and the San Diego Chapter of the Associated General Contractors of America (AGC). This session titled “Miller Act (Payment Bond) Actions on Federal Projects” will be led by MLA attorney Laurence Phillips. Under the Miller Act, prime contractors are required to furnish payment and performance bonds before any contract of more than $100,000 is awarded for any public work of the Federal Government. During this briefing, you will learn what you need to know about the Miller Act, including enforcement, subcontractor flow down issues and common defenses.

Full 2015 Breakfast Series Schedule:

Click here for more details and to register.

MLA DC Office to Host ABA Committee Panel on Recent Trends in Subcontractor Claims and Disputes

On Wednesday, February 11, 2015, at noon MLA’s DC office (located at 1900 K Street NW) will host a joint meeting between ABA PCLS Contract Claims and Disputes Resolution Committee and the Strategic Alliances, Teaming and Subcontracting Committee. This lunch meeting will feature a panel discussion about recent trends in subcontractor claims and disputes. The panel will be moderated by McKenna Long & Aldridge colleague John Sorrenti, and will feature the following panelists: Linda Maramba (Northrop Grumman), Lewis Wiener (Sutherland Asbill & Brennan), Beth Ferrell (McKenna Long & Aldridge), Jeff Regner (Department of Justice) and Kyle Chadwick (Trial Attorney, United States Army Legal Services Agency Contract and Fiscal Law Division). Please contact Andrea Tanner if you would like to attend in-person. If you wish to participate by phone, please use the following dial-in number: 1-888-887-4214 (access code: 584917).

COFC Decision Rejects Government’s Argument That The Contractor Was Required To File A Claim To Assert An Affirmative Defense

This post was co-authored by Elizabeth A. Ferrell, Justin M. Ganderson and Sandeep N. Nandivada.

When the Federal Circuit issued its 2010 Maropakis decision, many in the government contracts bar immediately grew concerned about the potential application and scope of that decision.  However, subsequent Court of Federal Claims (COFC) and Boards of Contract Appeals (BCAs) decisions have generally (and appropriately) placed certain boundaries on Maropakis, and provided some clarification about its scope.  The COFC’s decision in Total Engineering is no different, but presents an additional twist.  

Pertinently, in Total Engineering, the contractor appealed the government’s affirmative claim seeking payment of approximately $2.3 million due to the contractor’s allegedly defective work, and asserted a “defective specifications” defense.  The government filed a motion to dismiss the amended complaint for lack of jurisdiction, arguing that, under Maropakis, the contractor was required to submit an affirmative CDA claim before it could assert its defense.  (The government argued that the contractor was really asserting an impracticability claim.)  The Court rejected the government’s argument, and distinguished the facts in this case from the situation in Maropakis.  Here, the Court found that the contractor was not seeking any separate monetary relief or adjustment to the contract’s terms based on its “defective specifications” defense.  Rather, the contractor only was arguing that the government’s design was the root of the alleged defective work, not the contractor’s workmanship – i.e., the contractor merely followed the government’s specifications which resulted in the defective work.  Further, the Court noted that “a favorable resolution of [the contractor’s] defense would not result in any separate contract adjustment or monetary relief to [the contractor],” and a result, the Court found that the contractor’s defense was not a claim as defined in FAR 2.101.  (It is also worth noting that the contracting officer’s final decision considered and rejected the same “defective specifications” defense.)

Ultimately, this decision is a pragmatic one, and as the Court states, “[t]he CDA does not require the contractor to jump through such an extra hoop and refile its defense to a Government claim as a so-called contractor’s ‘claim’ where it is not seeking any separate monetary relief or contract adjustment.”  However, because the application of Maropakis generally is based on the specific facts and “defenses” presented, contractors still must consider whether or not to submit a CDA claim to the contracting officer (or how to frame a CDA claim) in order to preserve/assert certain defenses at the trial level.  Total Engineering presents a somewhat unique fact pattern that will not apply in every instance.

Construction Law and Federal Contracting Breakfast Series: Federal Prevailing Wage Requirements and Issues on Construction Projects

Come join us for the second briefing of the six-part breakfast series entitled, Construction Law and Federal Contracting, hosted by MLA and the San Diego Chapter of the Associated General Contractors of America (AGC). On February 12^th, MLA attorneys Laurence Phillips and Jim McNeill will lead a session titled “Federal Prevailing Wage Requirements and Issues on Construction Projects” covering key provisions of the Davis-Bacon Act and related issues involving construction projects. Don’t miss the chance to interact with key personnel from MLA during this 90-minute discussion.

Full 2015 Breakfast Series Schedule:

Click here for more details and to register.

Cuba’s Doors Begin To Open To U.S. Government Contractors

This post was co-authored by Allen B. Green, Jason M. Silverman and Sandeep N. Nandivada.

On December 17, 2014, President Obama announced that the United States would establish diplomatic relations with Cuba and reduce the travel and trade restrictions that have been in place for more than five decades.  Today, the Department of the Treasury’s Office of Foreign Assets and Control (OFAC) and the Department of Commerce's Bureau of Industry and Security (BIS) took the first steps toward making that a promise a reality.  OFAC and BIS each issued final rules to implement President Obama’s new Cuba policy. 

BIS's new rule amends the Export Administration Regulations (EAR) (15 C.F.R. Parts 730-774 ) to broaden an existing license exception regarding personal communications devices.  Additionally, the rule establishes a new license exception permitting a set of narrowly-described transactions designed to further civil society in Cuba.

OFAC’s new rule amends the Cuban Assets Control Regulations (CACR) (31 C.F.R. Part 515) to facilitate travel to Cuba for authorized purposes, the provision by travel agents and airlines of authorized travel services and the forwarding by certain entities of authorized remittances.  The rule also raises the limit on remittances to Cuba, allows U.S. financial institutions to open correspondent accounts at Cuban financial institutions and authorizes certain transactions with Cuban nationals outside of Cuba.  Additionally, the rule authorizes transactions that establish mechanisms to provide commercial telecommunications services linking third countries and Cuba in Cuba and allows persons subject to U.S. jurisdiction to provide additional services incident to internet-based communications and related to certain exports and re-exports of communications items.

Although these new rules are a significant step, there are several others that must be taken before U.S. government contractors can fully take advantage of the shift in U.S.-Cuba trade policy.  These steps include revisiting Cuba’s designation as a state sponsor of terrorism and publishing a list of independent Cuban entrepreneurs with whom the new OFAC rules permit trade.  U.S. government contractors interested in pursuing contracting opportunities in Cuba will  therefore need to carefully assess the amendments to the CACR and the EAR to determine the permissible scope of activities and transactions in Cuba and continue to monitor developments regarding the implementation of the President’s policy.

Please see our recent advisory here for more detail on this topic.

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2015 Construction Law and Federal Contracting Breakfast Series

2015 is just a few weeks away.  Before your calendar fills up, make sure you save time for a six-part breakfast series entitled, Construction Law and Federal Contracting, hosted by MLA and the San Diego Chapter of the Associated General Contractors of America (AGC).  The breakfast series will be held on the second Thursday of each month at the AGC’s San Diego headquarters.  Join us on January 8, 2015, for the kick-off breakfast, “The Federal False Claims Act on Construction Projects.”  During this 90-minute session, MLA attorneys Laurence Phillips and Jae Park will lead a discussion regarding FCA provisions, how they apply on federal construction projects, recent changes and trends and best practices to mitigate exposure to liability.

Full 2015 Breakfast Series Schedule:

Click here for more details and to register.

Cybersecurity Legislation Heating Up

This post was co-authored by Elizabeth A. Ferrell and Michael J. McGuinn.

Congress recently passed a host of significant cybersecurity bills highlighting the government’s increased emphasis on cybersecurity.  Legislation passed last week mandates reporting of cyber incidents for “operationally critical contractors,” codifies the increased cybersecurity roles of the Department of Homeland Security and the National Institute of Standards and Technology, contains important updates to the Federal Information Security Management Act of 2002, and emphasizes the government’s need to develop qualified government cybersecurity personnel.

Please see our recent advisory for more detail on this topic.

MLA DC Office to Host ABA Committee Panel on Government Claims

On Wednesday, November 12, 2014, at noon MLA’s DC office (located at 1900 K Street NW) will host the ABA PCLS Contract Claims and Disputes Resolution Committee’s monthly meeting, which will feature a panel discussion about government claims.  Justin Ganderson will be moderating a panel comprised of Judge Lynda T. O'Sullivan (ASBCA), Beth Ferrell (MLA, Partner), Paul Pompeo (Arnold & Porter, Partner), David Koeppel (Counsel for Procurement and Contracts at United States Department of Labor, Office of the Solicitor) and Robert Neill (Trial Attorney, Contract & Fiscal Law Division, U.S. Army Legal Services Agency).  They will be discussing a variety of topics, including the CDA’s 6-year statute of limitations, the impact of the Federal Circuit’s 2010 M. Maropakis Carpentry decision (finding that the contractor was required to file a claim in order to raise certain defenses to the government’s liquidated damages assessment and set-off), the ASBCA’s recent Beechcraft Defense Company decision (ordering the government to file a complaint regarding its underlying claim), the factors the government reviews when deciding whether to assert a claim against a contractor.  Please contact Justin Ganderson if you would like to attend in person or by phone.

Commerce Department Imposes New Restrictions on Exports to Venezuela

Today, the Bureau of Industry and Security (BIS) imposed military end use and end user licensing requirements on exports to Venezuela.  This new restriction parallels the existing restrictions in place regarding China (for military end uses) and Russia (for both military end uses and end users).  It prohibits unlicensed exports to Venezuela of certain items subject to the EAR that the exporter knows are destined for military end users or end uses, as those terms are defined in the rule. 

For exporters, this change reinforces the importance of knowing the EAR’s end use and end user restrictions and conducting effective due diligence on customers and other parties to export transactions.

Unlike similar changes of this type, BIS gave exporters a bit of a break by not making the restriction retroactive to contracts signed prior to November 7, 2014.

For more information, the full Federal Register notice is available here.