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Government Contracts Update

In March 2018, several federal agencies implemented significant new changes required by the National Defense Authorization Act for Fiscal Year 2018 (NDAA FY18), including Department of Defense (DoD) enhancements to debriefings issued pursuant to Federal Acquisition Regulation (FAR) 15.506(d), which allow unsuccessful offerors to ask follow up questions within two business days of the debriefing. This article provides an overview of these and other legal developments in the past month that may affect government contractors.

Regulatory Developments in Government Contracts
  • Enhanced DoD postaward debriefings provide opportunities for unsuccessful offerors to ask questions. On March 22, 2018, Shay Assad, Director of Defense Pricing/Defense Procurement and Acquisition Policy in the DoD issued Class Deviation 2018-O0011 to implement the postaward debriefing rights required under Section 818 of the NDAA FY18. Effective immediately, when providing postaward debriefings conducted pursuant to FAR 15.506(d), DoD contracting officers are required to provide an opportunity for unsuccessful offerors to submit additional questions within two business days after receiving the debriefing. The agency then has five business days to respond in writing and the agency will not consider the debriefing concluded until the agency delivers its written response. Further, the agency must suspend performance pursuant to FAR 33.104(c) within:
    • Ten days after the date of contract award;
    • Five days after a debriefing date offered to the protester under a timely debriefing request and no additional questions related to the debriefing are submitted; or
    • Five days after the Government delivers its written response to additional questions submitted by the unsuccessful offerors, whichever is later.

    March 22, 2018 Class Deviation 2018-0011. Prior to this deviation, unsuccessful offerors risked losing an automatic suspension of performance if they waited for additional information from a DoD agency before filing a protest at the Government Accountability Office or the agency. Hopefully this deviation encourages DoD agencies to provide thorough and clear debriefings.

  • Procurement through Commercial e-Commerce Portals. On March 16, 2018, the General Services Administration (GSA) and the Office of Management and Budget (OMB) issued their joint implementation plan pursuant to Section 846 of NDAA FY18. Of note, the plan recommends the following legislative changes to simplify commercial product procurement:
    • Raise the micro-purchase threshold to $25,000;
    • Give GSA the statutory flexibility to develop the program requirements;
    • Clarify and broaden the definition of commercial e-commerce portals.
  • Updated Contracting Purchasing System Review. On March 1, 2018, the Defense Contract Management Agency (DCMA) released a new version of its Contracting Purchasing System Review Guidebook. The purpose of the guidebook is to provide "guidance and procedures to Government personnel for evaluating contractor's purchasing systems and preparing the CPSR [contractor purchasing system review] reports."

Legislative Developments

  • Accelerated Payments for Small Businesses Act of 2018. On March 20, 2018, Representative Stephen Knight introduced the bipartisan H.R. 5337. The bill would require the government and prime contractors with small business subcontractors to establish a goal of paying small business contractors within 15 days of receiving a proper invoice.
  • Encouraging Veteran Employment Act of 2018. On March 6, 2018, Representative Stephen Knight (R-CA) introduced the bipartisan H.R. 5177, which would "authorize the Secretary of Defense, in awarding a contract for the procurement of goods or services, to give a preference to offerors that employ veterans."
  • Department of Homeland Security Authorization Act. On March 7, 2018, the Senate Committee on Homeland Security and Governmental Affairs ordered H.R. 2825, which addresses DHS acquisition accountability and efficiency, to be reported favorably as amended. Ranking Member, Senator Claire McCaskill, stated that the bill will "codify a lot of the agency's acquisition oversight mechanisms" and includes "basic, good government policies that will reduce wasteful spending and failed acquisition programs."
  • The Municipal Infrastructure Savings and Transparency Act. On March 15, 2018, Representative Brian Babin introduced H.R. 5310, which would require federally funded infrastructure projects to use open, competitive bidding procedures for all materials. In other words, State and local authorities would not be able to require use of a particular construction material.
  • Freedom from Government Competition Act of 2017. On March 2, 2018, Representative John Duncan (R-TN) introduced H.R. 1339, which would, subject to limited exceptions, require federal agencies to "obtain all goods and services necessary for or beneficial to the accomplishment of its authorized functions by procurement from private sources." The bill has 16 cosponsors.
  • Artificial Intelligence. On March 7, 2018, the House Subcommittee on Information Technology of the Committee on Oversight and Government Reform held a hearing on the government's engagement of Artificial Intelligence (AI). Of note, the Subcommittee heard testimony from Keith Nakasone, Deputy Assistant Commissioner in the Office of Information Technology Category at the General Services Administration (GSA), who discussed GSA's development of AI tools to handle compliance monitoring tasks.

Legal Developments

  • Potential Liability of Prime for Subcontractor's Labor Law Compliance. The District Court for the District of Columbia denied a government contractor's motion to dismiss claims by its subcontractor's employees that they had not been paid wages required under the Fair Labor Standards Act, the D.C. Minimum Wage Act, the D.C. Living Wage Act, and the D.C. Wage Payment and Collection Act. Because this case involves application of fair wage laws to contractors regarding their subcontractors' employees, it is a case to watch.

Federal Reports

  • CRS Summarizes Mentor-Protégé Programs. The Congressional Research Service (CRS) issued R41722, titled "Small Business Mentor-Protégé Programs." The report summarizes and compares the program regulations and participant benefits for mentor-protégé programs run by the Federal government, specifically the Small Business Administration, the Department of Defense, the Department of Homeland Security, and the Department of Transportation.
  • GAO Report on FITARA. The Government Accountability Office (GAO) issued GAO-18-460T noting that Federal agencies are still lagging in updating their management of information technology (IT) acquisitions and operations. The GAO reports that the federal government plans to invest more than $96 billion for IT in fiscal year 2018 but that agencies have only implemented about 59% of the GAO recommendations made during fiscal years 2010 through 2015.