There have been several legal developments in the past month that may affect and be of interest to government contractors. This article gives a brief overview of some of those developments.
- Government Shutdown Avoided. On February 15, President Trump signed into law H.J. Res. 31, the Consolidated Appropriations Act, 2019, avoiding a second government shutdown. The act provides funding for several federal agencies, including the Department of Homeland Security and the Department of Justice, among others.
- Proclamation—National Emergency at the U.S. Southern Border. Also on February 15, President Trump issued a proclamation declaring a national emergency at the southern border of the United States, directing the Secretary of Defense to order reserves to active duty to assist and support the activities of the Secretary of Homeland Security at the southern border and directing the Secretaries of Defense, Interior, and Homeland Security to take all appropriate actions, including, as necessary, the transfer and acceptance of jurisdiction over border lands.
- Policy Directive—United States Space Force. On February 19, President Trump issued Space Policy Directive 4, "Establishment of the United States Space Force," to create a new sixth branch of the U.S. military—the United States Space Force—to be placed within the Department of the Air Force initially. The Department of Defense (DoD) subsequently proposed legislation creating the U.S. Space Force, with a five-year phased stand-up to begin at the start of the 2020 fiscal year (FY) (October 1, 2019). Vice President Pence has called on Congress to modify Title 10 of the U.S. Code to establish the new branch.
- Executive Order—Buy American Preferences. On January 31 (released in the Federal Register on February 5), President Trump issued his second executive order related to Buy American preferences, "Strengthening Buy-American Preferences for Infrastructure Projects." Venable's coverage of the new Buy American executive order can be found here.
- Executive Order—Artificial Intelligence. On February 11, President Trump issued an executive order setting forth the national strategy for promoting artificial intelligence, "Maintaining American Leadership in Artificial Intelligence." DoD subsequently released a summary of and fact sheet for its artificial intelligence strategy. Venable's coverage of the artificial intelligence executive order can be found here.
Small Business Updates
- SBA Veteran-Owned Small Business Meetings. The Small Business Administration (SBA) is holding two meetings soon regarding veteran-owned small businesses. The Interagency Task Force on Veterans Small Business Development ("Task Force") is meeting on March 6, 2019 to "discuss efforts that support service-disabled veteran-owned small businesses, updates on past and current events, and the Task Force's objectives for fiscal year 2019." Additionally, the Advisory Committee on Veterans Business Affairs (ACVBA) is meeting on March 7, 2019 to "discuss efforts that support veteran-owned small businesses, updates on past and current events, and the ACVBA's objectives for fiscal year 2019." Both meetings are open to the public, but advance notice of attendance is requested.
- Impact of Shutdown on Small Businesses. On February 6, the House of Representatives Committee on Small Business held a hearing, "The Shutdown: Economic Impact on Small Businesses." On February 11, the Ranking Member of the Senate Committee on Small Business and Entrepreneurship and the Chairwoman of the House Committee on Small Business sent a letter to the Comptroller General requesting that the Government Accountability Office (GAO) evaluate the negative impact of the government shutdown on small businesses and the SBA. The Senate Committee on Small Business and Entrepreneurship also held a hearing on February 13, "Oversight of the U.S. Small Business Administration," which also addressed how small businesses were affected by the government shutdown.
DoD Regulatory Updates
DoD issued several final rules, proposed rules, and information collection notices this past month, a few of which are outlined below:
- Antiterrorism Training Requirements. On February 15, DoD issued a final rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the requirements for antiterrorism training for contractors as set forth in DoD Instruction O-2000.16, Volume 1, DoD Antiterrorism (AT) Program Implementation: DoD AT Standards. The final rule creates new DFARS clause 252.204-7004, Antiterrorism Awareness Training for Contractors, the purpose of which is to "advise DoD contractors of the requirement for its employees (and those of its subcontractors, if applicable) to complete Level I antiterrorism awareness training within 30 days of requiring access and annually thereafter, if, as a condition of contract performance require routine physical access to a Federally-controlled facility or a military installation."
- Design-Build Selection Procedures. On February 15, DoD issued a final rule amending the DFARS to implement Section 823 of the National Defense Authorization Act (NDAA) for FY 2018, which modified 10 U.S.C. § 2305a to provide that, if the contract value exceeds $4 million and the solicitation is issued pursuant to an indefinite-delivery, indefinite-quantity (IDIQ) contract for design-build construction, more than five offerors may be selected. For non-IDIQ contracts when the solicitation is for a contract that exceeds $4 million, more than five offerors may be selected if the contracting officer's decision is approved by the head of the contracting activity. If the contract does not exceed $4 million, the contracting officer has discretion to select the number of offerors.
- Undefinitized Contract Actions. On February 15, DoD proposed to amend the DFARS to implement Section 811 of the NDAA for FY 2017 and Section 815 of the NDAA for FY 2018, which modified restrictions on undefinitized contractual actions regarding risk-based profit, time for definitization, and foreign military sales, and established limitations on unilateral definitizations of undefinitized contractual actions, respectively. Comments on the proposed rule are due by April 16, 2019.
- DSS Collection Notice. On February 11, the Defense Security Service (DSS) issued an information collection notice regarding the collection of six items deemed "necessary so that DSS can provide proper monitoring and oversight of companies with Foreign Ownership, Control, or Influence (FOCI), while those companies provide services on a U.S. government contract." The items are (1) Outside Director/Proxy Holder (OD/PH) Nominee Package, (2) Nominating Official Package, (3) Self-Assessment Form, (4) Peer Evaluation Form, (5) Group Assessment Form, and (6) OD/PH Continuous Training Certificate. The purpose of the information collection is "to prevent foreign interests from influencing the company's performance of classified contracts in matters of U.S. national security." Comments on the information collection are due by April 12, 2019.
GAO and CRS Reports
- Contractor Workplace Safety. The GAO released a new report, GAO-19-235, "Defense Contracting: Enhanced Information Needed on Contractor Workplace Safety." The NDAA for FY 2018 included a provision requiring GAO to review issues related to the safety and health record of DoD contractors. In this report, GAO analyzed the incidence of prior safety and health violations by certain DoD manufacturing and construction contractors and how DoD addresses contractor workplace safety and health during the acquisition process. GAO found that of the 192 companies that it reviewed, 106 had been inspected by the Department of Labor's Occupational Safety and Health Administration (OSHA) or similar state agencies and 83 companies were cited for at least one violation (and 52 companies had at least one serious violation). GAO recognized that the OSHA inspection data did not include information on whether the violations occurred during the performance of DoD contracts, however. GAO found that DoD contracting officials have opportunities to address contractor workplace health and safety issues during the acquisition process.
- Contractor Business Systems. The GAO released a new report, GAO-19-212, "Contractor Business Systems: DOD Needs Better Information to Monitor and Assess Review Process." The NDAA for FY 2018 included a provision for GAO to evaluate how DoD has implemented legislation that is intended to improve DoD's contractor business system review process. Contractor business systems and associated internal controls are intended to act as safeguards against fraud, waste, and abuse. In this report, GAO examined the changes that DoD has made to the review process and the extent to which DoD has ensured timely business system reviews. GAO found that the Defense Contract Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA), which are responsible for conducting the reviews, have not been consistently conducting the reviews in a timely manner and in accordance with established policies. GAO recommended that DCMA and DCAA develop a mechanism to monitor and ensure that contractor business system reviews are conducted in a timely manner.
- Small Business Size Standards. The Congressional Research Service (CRS) released a new report—"Small Business Size Standards: A Historical Analysis of Contemporary Issues"—that provides a historical analysis of SBA's size standards, along with an examination of various statutes touching upon the definition of a small business, including the Small Business Jobs Act of 2010, the NDAA for FYs 2013 and 2017, the recently enacted Small Business Runway Extension Act of 2018, and recently introduced legislation.
- Trusted Workforce 2.0. On February 28, the Office of the Director of National Intelligence (ODNI) and the Office of Personnel Management (OPM), along with the Performance Accountability Council (PAC), unveiled a plan to debut the finalized framework for Trusted Workforce 2.0, which will substantially overhaul how federal background investigations are conducted, to the White House and Congress. For the past year, the government has been working to reduce the backlog of background investigations from 725,000 in early 2018 to 551,000 today. Trusted Workforce 2.0 will streamline many aspects of the background investigation process, including by reducing the number of investigative tiers from five to three (public trust, secret, and top secret), allowing for the transfer of clearances between federal agencies, upgrading of clearances to a higher risk level, and allowing for digital and other secure interview channels for lower-risk issues not requiring an in-person interview, among many other changes.
- DoD Cloud Strategy. DoD has released its Cloud Strategy from December 2018. The strategy identifies seven strategic objectives and guiding principles that "focus implementation activities on two fundamental types of work: first is the stand up of cloud platforms ready to receive data and applications, and second is the ongoing work to migrate existing applications and to develop new applications in the cloud." Also useful in this regard is the DoD Cloud Computing Acquisition Guidebook, which provides best practices and guidance for program managers, contracting officers, and staff to use in conducting cloud acquisitions.
- GSA INFORM Pilot. GSA is in the process of expanding its post-award communication process through the In-Depth Feedback through Open Reporting Methods (INFORM) pilot system. INFORM will "provid[e] each offeror with an unsolicited customized evaluation statement, an opportunity for an in-person oral feedback meeting with the GSA evaluation team, and the option to submit written follow-up questions." GSA hopes that adding information and transparency to the post-award feedback process will demonstrate the fairness and impartiality of award decisions to offerors. The INFROM pilot program will consist of a test group of approximately 50 competitive acquisitions representing a sample of GSA acquisitions. The pilot is set to run through September 30, 2019 or until the final procurement in the pilot is awarded, whichever is sooner. Additional guidance on the INFORM pilot can be found here. The INFORM pilot is one of several current federal agency initiatives to expand post-award communications and debriefings, also exemplified by the DoD's Enhanced Post-Award Debriefing Rights and aspects of DHS's Procurement Innovation Lab.
- Section 809 Panel. As Venable mentioned last month, the Section 809 Panel recently released its third and final report recommending changes to the structure and operations of DoD acquisitions. This month, the Section 809 Panel has released a report, "A Roadmap to the Section 809 Panel Reports," which provides a synopsis of how all of the Section 809 Panel's recommendations are intended to work in concert. The Pentagon has indicated that implementing the Panel's recommendations will be challenging.
- Migration of FBO.gov. Fed Biz Opps (FBO.gov) will migrate to beta.SAM.gov in late 2019.