Insights

Stephen McBrady, a Washington, D.C.-based partner in the firm's Government Contracts Group talks with Compliance Week about new requirements for government contractors to disclose previous violations of labor and employment laws when submitting a bid. Under the proposed rules, contractors would need to obtain data about their sub-contractors. "That brings up a whole host of other issues," said McBrady. For example, it's not unusual for one company to have a sub-contractor that is its competitor on the next contract up for bid. That raises concerns about confidentiality. Among the other concerns, McBrady notes, "Is it reasonable to expect that a small business prime contractor will be able to analyze and collect the labor law compliance information from its large sub-contractor?"

Los Angeles-based attorneys, Mark R. Troy, Jeffrey H. Rutherford, and Mana Elihu Lombardo were recognized for one of the Daily Journal's top verdicts of 2014 for their representation of Lockheed Martin in the U.S. ex. rel. Hopper v. Lockheed Martin Corp. case. After a six-day trial in the U.S. District Court for the Central District of California in Los Angeles, a jury unanimously found in favor of Lockheed Martin Corporation in a lawsuit filed under the qui tam provisions of the civil False Claims Act.

Washington, D.C.-based Government Contacts Group partner, Peter Eyre, talks to Law360 regarding a final rule that will tighten restrictions on human trafficking in government contracting. Under its requirements, all contractors must disclose working conditions to employees, are barred from confiscating passports or other immigration documents, must ensure that workers aren't being charged any recruitment fees, and must provide the worker with return transportation for non-nationals. "I think another big question is: 'Who pays for this?'" Eyre said. "There are some very specific obligations, both the compliance plan ... and others. But who is going to pay for that?"

Law360 highlights the firm's Government Contracts Group and the recent webinar the Group conducted titled, "What Will the New Year Bring for Government Contractors?" This article details the five issues federal contractors should pay attention to in 2015, as forecasted by Crowell & Moring attorneys in their preview of the year ahead.

Stephen J. McBrady, a Washington, D.C.-based partner in Crowell & Moring's Government Contracts Group, discusses trends in government contracts litigation and their potential impacts. In particular, he notes that a recent Federal Circuit decision upholding the dismissal of an $80 billion overbilling suit against Sikorsky Aircraft Corp. may affect strategy for contractors and the government, as they can now potentially agree to toll the statute of limitations for the Contract Disputes Act, which establishes the procedures for handling claims related to federal government contracts. "Because the statute of limitations was jurisdictional, it could not be waived, or tolled my mutual agreement," McBrady said. "In that respect, Sikorsky is a game-changer."

Washington, D.C.-based Government Contracts partner, Peter Eyre, discusses the potential impact of executive orders on the government contracts industry, including a 2012 order that will recruit federal contractors in U.S. efforts to fight labor trafficking at home and abroad. "That proposal came out months ago. That is now, as far as we can tell, ready to come out in final form. Because of the compliance requirements of that rule, it's something that will get a lot of attention," Eyre said.

Washington, D.C.-based Government Contracts Group attorneys, Angela B. Styles and Stephen J. McBrady, discuss how President Obama might soon issue an executive order making it tougher for corporations that move overseas for tax purposes to win federal contracts. "How hard they will make it to do business with the U.S. government is anyone's guess," Styles said. The order requires contractors to disclose violations of more than a dozen state and federal labor laws and regulations. McBrady added that, "As a result, contractors should review labor law compliance and current arbitration agreements, as well as submit comments on any proposed regulations."

Washington, D.C.-based Government Contract Group partner, J. Chris Haile, discusses a recent Court of Federal Claims decision that exempts Federal Supply Schedule contracts from some streamlined commercial acquisition rules, which is causing some concern about the long-term relevance of commercial contracting rules. Because FAR Part 8.4 only provides that FAR Part 12 applies in three instances, it doesn't cover situations in which CMS deviated from commercial practices when making an order under the schedules. "The general presumption has been that the schedules are commercial item contracts, so that while they're subject to FAR Part 8, they're also subject to FAR Part 12," Haile said. "I think that the decision certainly could have come out differently."

Washington, D.C.-based Government Contacts Group partner, Peter Eyre, discusses the expanded authority of the Defense Priorities and Allocations System (DPAS) and how it will effect various companies and agencies, especially the U.S. Department of Homeland Security and its contractors. "Contractors and subcontractors that traditionally haven't dealt with rated orders are more likely to see them because of this expansion. Companies will need to become familiar with these obligations," Eyre said. "And I suspect that civilian agencies — especially DHS — are going to be figuring out how to use the expanded coverage and authority."

Washington, D.C.-based Government Contacts Group partner, Peter Eyre, speaks with Law360 regarding the lingering questions on contractor labor violation reports. When speaking to the mandatory disclosure rule, Eyre says, "It's taken years to get clarity on what happens to the information when it's disclosed [under the mandatory disclosure rule], and here, too, industry will need clarity on how the government will weigh and act upon these new disclosures."

Government Contracts Group counsel Stephen McBrady discusses how over the past few years prosecutors have attempted to halt contractors' appeals before the Armed Services Board of Contract Appeals (ASBCA) because of alleged similarity to litigation taking place in district court. McBrady says, "when the government seeks to suspend contract claims pending the outcome of criminal or civil cases, the board, following Supreme Court's decision in Landis v. North American Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936), requires the government to 'make out a clear case of hardship or inequity in being required to go forward'" if the stay may cause harm.

When asked whether Government-Industry Data Exchange Program (GIDEP), which is managed by the Pentagon, is the most appropriate vehicle for the new reporting framework, Government Contracts partner Peter Eyre told Law360, "I think you'll see comments about GIDEP itself and whether GIDEP is equipped for this type of activity," Eyre said. "This could be a significant expansion because contractors would be reporting directly into GIDEP and using GIDEP to screen, prior to purchasing supplies. Incorporating that screen into your procurement process is potentially quite onerous and might necessitate enhancements to the GIDEP system itself."

Government Contracts Group partner Peter Eyre offers his thoughts on the U.S. Department of Defense's final rule issued on May 6 intended to remove counterfeit electronic parts from its supply chain. He says, "DOD is very serious about the integrity of the supply chain and they recognize that carving out off the shelf items leaves a gap in their coverage,…The final rule demonstrates that DOD expects visibility and coverage from top-to-bottom of the supply chain."

In reaction to recent U.S. Court of Federal Claims (COFC) decisions that have used different standards to determine recovery of bid preparation and proposal costs, Washington, D.C.-based Government Contracts Group partner John McCarthy tells BNA that he "anticipates future cases in which costs that fall under the marketing or pre-contract logistics categories noted in Innovation Development are recognized as part of a substantial proposal submission effort."

Washington, D.C.-based counsel and member of the firm's Government Contracts Group, Steve McBrady, discusses the recent decision released by the GAO that, according to the article, the Department of Veterans Affairs held misleading discussions because it failed to identify a critical quotation deficiency. McBrady says the case is, "a reminder to all contractors considering their protest options that simply because the agency characterizes an exchange (or in this case, numerous exchanges) as 'clarifications', that does not mean that GAO will necessarily agree."

When asked about what regulations and legislation government contracts and lawyers will be watching this new year, Washington, D.C.-based Government Contracts partner Peter Eyre says, "I think there's going to be much more focus on sources and how prime contractors supervise and monitor subcontractors in their supply chain. There's also a question of who's going to bear those costs. …There are dollars associated with closer scrutiny of the supply chain."

With new rules for whistleblower protections for employees at federal contractors and their sub-contractors, there could be more enforcement actions against companies in the defense companies if there are issues not handled correctly. Washington, D.C.-based Government Contracts Group partner Peter Eyre discusses how the new rules mandated by the National Defense Authorization Act will change how both sub-contractor and sub-contractor employees are now covered by these rules.

Washington, D.C.-based Government Contracts Group partner, Peter Eyre, speaks to Government Contracts Law360 about new anti-trafficking regulations. The regulations are aimed at fighting human trafficking and implement parts of the 2013 National Defense Authorization Act and a September 2012 executive order on trafficking that force prime contractors to take more responsibility for vetting their subcontractors and recruiters. According to Eyre, "The question is going to be: What else might the government expect above and beyond those minimum requirements? It's unclear what entity will opine on the sufficiency of these plans, and that too is a likely area for comment."