Government Contracts Connection


Energy Savings Performance Contracts

The Department of Energy is extending the deadline for industry feedback on its Energy Savings Performance Contracts (“ESPC”) to May 17, 2013.

The Department of Energy website explains ESPCs as follows:

(more…)



OFCCP Echoes EEOC’s Recommendations on the Use of Criminal Records in Making Hiring Decisions

On January 29, 2013, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued Directive No. 306: “Complying with Non-Discrimination Provisions: Criminal Records Restrictions and Discrimination Based on Race and National Origin.”  The directive advises federal government contractors and subcontractors that hiring policies and practices that exclude workers with criminal records may violate employment discrimination laws because of racial and ethnic disparities that exist in the criminal justice system.  The OFCCP cautions that hiring policies “that exclude people from employment based on the mere existence of a criminal history record and that do not take into account the age and nature of an offense . . . are likely to unjustifiably restrict the employment opportunities of individuals with conviction histories.  Due to racial and ethnic disparities in the criminal justice system, such policies are likely to violate federal anti-discrimination law.”

To read the full article, click HERE.



CFIUS Report Highlights Concerns For Contractors Involved With Critical Technologies

The Committee on Foreign Investment in the United States (CFIUS) released December 20, 2012, the unclassified version of its Annual Report to congress for CY 2011.  For the first time CFIUS made a finding that the U.S. Intelligence Community “judges with moderate confidence that there is likely a coordinated strategy among one or more foreign governments or companies to acquire U.S. companies involved in research, development, or production of critical technologies for which the United States is a leading producer.”  The “critical technologies” at issue are defined with  reference to U.S. export control regulations, and include (1) defense goods and services controlled on the U.S. Munitions List; (2) certain items on the Commerce Control List that are controlled for reasons of national security, chemical and biological weapons proliferation, nuclear nonproliferation, or missile technology, as well as those that are controlled for reasons of regional stability or surreptitious listening;  (3) specially designed nuclear equipment, technology, software, etc.; and (4) select agents and toxins.  CFIUS views a “coordinated activity” as “a plan of action reflected in directed efforts developed and implemented by a foreign government, in association with one or more foreign companies, to acquire U.S. companies with critical technologies.  CFIUS does not consider the efforts of a single company in pursuit of business goals (such as entry into the U.S. market; increased market share; increased sales; access to new technologies; and diversification out of mature industries), absent indications of specific government direction, to be a coordinated strategy. (more…)



NEW EXECUTIVE ORDER ON IRAN PLACES U.S. PARENTS AND THEIR FOREIGN SUBSIDIARIES AT RISK OF U.S. SANCTION

On October 9, 2012, President Obama, issued the Executive Order required by Section 218 of the Iran Threat Reduction and Syria Human Rights Act of 2012.  The new Order for the first time applies Iranian sanctions to U.S.-controlled offshore subsidiaries and allows penalties against the U.S. parent or other controlling U.S. entity for the actions of its foreign
subsidiaries.  Now the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) has a power similar to that it already exercises under the Cuba sanctions to enforce U.S. law extraterritorially against U.S. controlled foreign subsidiaries.  Anticipating the President’s compliance with the Act, OFAC previously released a series of FAQs discussing Section 4 (See OFAC FAQs).

Most significant, immediately effective is Section 4 of the Order that now prohibits non-U.S. companies that are owned or controlled by a U.S. Person from engaging in transactions with Iran, as if that non-U.S. company was itself directly subject to U.S. jurisdiction.  Should that foreign owned entity engage in a prohibited transaction with Iran, the U.S. parent company, not the foreign owned entity, is subject to penalty.  The new Order provides that U.S. Persons can divest or terminate their Iranian business by February 6, 2013, but OFAC has indicated that the effective date for enforcement of the new Order remains its date of issuance.  OFAC also has indicated, however, that it will be receptive to reviewing applications for a specific license to permit a U.S. controlling entity to in effect “wind-down” its Iranian transactions by foreign subsidiaries of U.S. companies by the February 6, 2013 deadline. (more…)



Bid Protest Explosion – An Overview Of Federal Bid Protests

With more contractors fighting over procurements, it is important for companies that conduct business with the federal government, or that are thinking about conducting business with the federal government, to understand the bid protest process.  Such an understanding is necessary for businesses that want to be competitive in the federal marketplace.

Across the board, the volume of bid protests is up, way up.  Both the Government Accountability Office (GAO) and the United States Court of Federal Claims have seen huge increases in their protest dockets over the past couple of years.  As the Obama Administration moves forward with its goal of cutting wasteful spending on contracts and getting better value for the taxpayer dollar, there is no doubt that this bid protest frenzy will likely continue.

This coming Wednesday, April 25, 2012, Michael R. Golden and Heather Kilgore Weiner, Pepper Hamilton LLP, are presenting a Webinar entitled “Bid Protest Explosion – An Overview of Federal Bid Protests.”  Topics will include an overview of the different bid protest forums including agencies, GAO and the Court of Federal Claims, and the pros and cons of each forum, as well as a discussion on how to decide whether to protest or intervene in a protest.  In addition, this webinar with discuss common issues related to pre-award and post-award bid protests, the importance of a government debriefing and the implications of the statutory Competition in Contracting Act (CICA) stay of contract performance and temporary restraining orders.

For more information about this Webinar or to sign up, click here.


Additional questions, feel free to contact Michael R. Golden
(202-220-1244) or 
Heather Kilgore Weiner(202-220-1212)



Practical Responses to the New FAPIIS “Seven-Day Window” Rule

The Federal Awardee Performance and Integrity Information System (FAPIIS) – the Government’s new on-line clearinghouse for contractor performance data – is already undergoing changes that will require contractors to respond.

As we reported in a previous post, the FAPIIS system creates a clearinghouse for contractor-related data, including past performance evaluations; nonresponsibility determinations; default terminations; criminal, civil, and administrative proceedings in connection with federal contracts; suspensions and debarment information; administrative agreements; and contracts terminated for fault.  Contracting officers began to insert the new FAPIIS clause (FAR 52.209–9) into contracts on January 24, 2011, and the system went “live” on April 15, 2011.

However, on January 3, 2012, a final rule was released that fine-tunes the ways in which companies must respond to information the Government posts to FAPIIS.  As we reported previously, companies must diligently scrutinize their FAPIIS entries to avoid the inadvertent disclosure of inaccurate or confidential information.  Under the new rule, companies will now have seven calendar days in which to review information proposed for public release on FAPIIS and to make a formal objection to the posting.

The types of information that the Government could post to FAPIIS include:

  • Terminations for Default
  • Non-responsibility Determinations
  • Recipient Not Qualified Determinations
  • Defective Pricing Determinations
  • Administrative Agreements, and
  • DoD Determinations of Contractor Fault

Under the new procedure, all information posted by the Government will be subject to a 14-day waiting period before it becomes publicly available on FAPIIS.  The Government will provide notice to the contractor when the new information has been put on the FAPIIS system, at which point the contractor will then have 7 calendar days (not working days) to object to the public release.  The information will not be available to the public until the end of the 14-day period.

If the contractor objects, it must cite to the FAPIIS FAR reporting clause and request removal of the information.  Importantly, the contractor must also explain how the information falls under one of the disclosure exemptions to the Freedom of Information Act (FOIA) that protects the information from public release.  Some of the most frequently used FOIA exemptions include:

  • The information relates to classified matters of national defense or foreign policy (Exemption 1)
  • The information is protected by another law that specifically exempts the information from public release (Exemption 3)

At the end of the day, as we have previously advised, contractors must be proactive in monitoring their past performance and other conduct that may bear upon their responsibility, including all of the information concerning the contractor and its past performance that is contained in any government database or in news articles, or that is obtainable by an Internet search of the contractor. This way, contractors can act immediately to correct any information that may be inaccurate or misleading.



Congress Extends Executive Compensation Cap under Defense Contracts to “All Contract Employees”

Under Section 803 of  the recently-enacted National Defense Authorization Act for Fiscal Year 2012, Congress has extended the cap on allowable contractor executive compensation under Defense contracts– currently set at $693,951 annually (including total amount of wages, salary, bonuses and deferred compensation) – to “all contractor employees.”

Previously, the $693,951 limit only applied to contractors’ top five highest-paid executives.  Under the new legislation, this limitation will apply to all employees whose labor is charged to government contracts.  So, what does this mean for contractors. (more…)




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