Earlier this year, the U.S. Senate and House of Representatives passed different versions of the National Defense Authorization Act for Fiscal Year 2018 (“FY 2018 NDAA”). The Senate version contained dramatic bid protest reforms that, with the exception of the reforms to debriefing, were largely unpopular in the government contracting community. The House version did not contain these reforms. After meeting in conference over the past month to iron out the differences between the two bills, on Nov. 8, 2017, the House and Senate Armed Services Committees announced an agreement had been reached. Contractors can breathe a sigh of relief, as most (if not all) of the protest reforms that the contracting community viewed negatively were left out of the bill agreed to in conference. Continue Reading House and Senate Strike Deal on Bid Protest Reforms in FY 2018 NDAA
Under the National Defense Authorization Acts (NDAAs), Congress provides legislation on various aspects of how the Department of Defense (DOD) defines and purchases commercial items. In July, Government Accountability Office (GAO) released a study on detailing (1) trends in the DOD’s acquisition of commercial items; and (2) recent NDAA changes from fiscal years 2013-2017 related to procurement of commercial items and actions taken by DOD in response to this legislation.
The Federal Acquisition Streamlining Act of 1994, of course, established a preference within the federal government to procure commercial items rather than items developed exclusively for the government. “Commercial items” are generally defined as products and services readily available in the commercial marketplace. Purchasing commercial items enables the DOD to participate in the commercial marketplace (when appropriate) and to take advantage of market innovations and reduce its acquisition costs. Despite this preference, the GAO study shows the DOD has been slow to embrace the preference to buy commercial items – but why? Continue Reading GAO Reports Decrease in Department of Defense Commercial Item Acquisitions
Oles Morrison attorney Howard W. Roth commented to the L.A. Times on proposed “Buy American” provisions in NAFTA. Howard explained that while proponents for “Buy American” cite a Government Accountability Office review stating that the U.S. has available twice as much government procurement to foreign companies, a lot of other countries just do not have the same military budget and needs as the U.S. “Denmark sells us a lot of goods and services,” he said, “but there’s not a whole lot we can sell to Denmark. Its defense budget is next to nothing.”
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Nearly 100 days into the new presidency, all eyes are on which of his campaign promises President Trump will implement next. One such promise put into motion is the President’s estimated $1 trillion infrastructure plan. Touted during his campaign as a means to stimulate job growth, the President’s plan may come with more federal deregulation than the construction and government contracting industries anticipated, including possible repeal or suspension of the Davis Bacon Act (DBA).
Introduced in the midst of the Great Depression, Congress enacted the DBA as a means to prevent failing wages. Eighty years later, the DBA has become synonymous with federal contracting. Also known as the federal prevailing wage statue, the DBA requires payment of prevailing wages on federally funded or assisted construction projects for contracts in excess of $2,000. Critics of the DBA argue that the prevailing rates artificially and unreasonably increase project costs, and that the U.S. Department of Labor is unable to develop an efficient process for determining market-rate wages. Proponents – particularly labor unions – argue the DBA prevents a “race to the bottom,” increasing productivity and improving local economies. Continue Reading President Trump’s Comments Stir Rumors of Possible Repeal or Suspension of the Davis Bacon Act
Last month, we wrote about the House passing a resolution (H.J. Res. 37) pursuant to the Congressional Review Act to repeal the Fair Pay and Safe Workplaces rule (commonly known as the contractor “Blacklisting” rule). At the time we predicted the resolution would also pass the Senate and be signed by President Trump. On March 6, 2017, the Senate passed the joint resolution, and joint resolution was signed by President Trump yesterday, permanently nullifying the Blacklisting rule before it ever took effect. Continue Reading President Trump Signs H.J. Res. 37 Canceling the Fair Pay and Safe Workplaces (“Blacklisting”) Rule
Back in October 2016, we wrote about the Fair Pay and Safe Workplaces rule (commonly known as the contractor “Blacklisting” rule) and how its implementation had been temporarily halted by a federal court in Texas. The Blacklisting rule would have allowed agencies to essentially debar contractors on a contract-by-contract basis if a contractor had a labor law violation on its record. Many in the contracting community lobbied hard against this rule, arguing (among other things) that the Blacklisting rule would put contractors at risk of inconsistent disqualification from procurements without the same due process rights that go along with agency suspension and debarment programs. Well, it now looks like Congress has decided to step in and flex a rarely used law to get rid of the Blacklisting rule for good.
Today, by a vote of 236-187, the House of Representatives passed a disapproval resolution pursuant to the Congressional Review Act to repeal the Blacklisting rule. Continue Reading House Votes to Repeal the Fair Pay and Safe Workplaces (“Blacklisting”) Rule
President Trump’s Executive Orders have been front page news for the past week, many of which have been quite controversial. Yesterday the President issued another Executive Order that, although unlikely to garner major media buzz, may be the most impactful yet for government contractors. The Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs, which some have referred to as the “Two-for-One” Order, is aimed at reducing the number of regulations across the federal government. The gist of the Order is that for every one new regulation that an executive branch agency proposes, it must repeal two existing regulations. In addition, the agency’s estimated cost of any new regulations must be offset by reductions in cost by repeal of existing regulations.
The Order makes exceptions for regulations pertaining to the “military, national security, or foreign affairs function of the United States,” “regulations related to agency organization, management, or personnel,” and any other category of regulations exempted by the Director of the Office of Management and Budget (“OMB”).
The problem with this Order is that its terms are vague, and the person charged with providing additional guidance on the Order has yet to be confirmed by the Senate. Continue Reading Trump’s Executive Order on Reducing Regulations Leaves Questions Unanswered
Two pieces of federal legislation that recently became law will have a major impact on government contractors seeking to protest Department of Defense (DoD) and Civilian Agencies task order awards. Some changes are for the worse, others are for the better. However, the best news for contractors is probably that some of the changes that were proposed did not make it into the final legislation.
2017 NDAA Divests GAO of Protest Jurisdiction Over of DoD Task Order Awards Between $10 Million and $25 Million
Signed into law Dec. 23, 2016, the 2017 National Defense Authorization Act (2017 NDAA) amends 10 U.S.C. § 2304c(e)(1)(B) by increasing the GAO’s jurisdictional threshold value for DoD task order protests from $10 million to $25 million. Naturally, this large increase greatly impacts contractors on DoD acquisitions. No legal remedy to protest DoD task orders less than $25 million will now exist, unless the protestor contends that the the order increases the scope, period, or maximum value of the contract under which the order is issued. Since DoD lobbied for this large increase, contractors can expect DoD will aim to issue task orders under the new $25 million threshold knowing those task order awards will not be subject to a protest at GAO.
Civilian Task Order Act Restores GAO’s Protest Jurisdiction Over Protests of $10 Million+ Civilian Agency Task Order Awards
The Government Accountability Office (GAO) Civilian Task and Delivery Order Protest Authority Act of 2016 (Civilian Task Order Act), signed into law Dec. 14, 2016, restores GAO’s protest authority over civilian task orders valued at over $10 million. The reinstatement of civilian task order protest jurisdiction at GAO is welcome news for disappointed offerors on civilian task order procurement, since they had no remedy during the prior three months to protest civilian agencies’ task order awards.
Although the increase in the DoD threshold to $25 million is unwelcome news, contractors can breathe a sigh of relief that other proposed protest reforms were not part of the final enacted 2017 NDAA. Those proposed changes included an attempt to require contractors earning more than $100 million in annual revenue to reimburse GAO for costs incurred for processing an unsuccessful GAO bid protest and to make an incumbent contractor-protestor forfeit profits earned on a bridge contract or extension received during the resolution of an unsuccessful GAO bid protest, and to preclude contractors from filing a bid protest at the Court of Federal Claims after unsuccessfully pursuing a protest at GAO. However, these proposed changes may not be dead forever. The 2017 NDAA mandates that DoD contract with an independent research entity to carry out a comprehensive study on the prevalence and impact of bid protests on Department of Defense acquisitions, including protests filed with contracting agencies, the Government Accountability Office, and the Court of Federal Claims. One of the focuses of the report is too analyze bid protests filed by incumbent contractors. Contractors should keep an eye out for this report, as it could be used as ammunition to limit bid protests rights in the future.
Recently, the U.S. Export-Import Bank (EXIM) issued a proposal that would align its size standards for determining whether a business qualifies as a “small business” with the Small Business Administration’s (SBA) current SBA Loan Program standards. Such a change would decrease inconsistencies among the entities, and potentially increase EXIM lending opportunities for small businesses that otherwise do not meet the SBA’s industry-based size standards as defined under the North American Industry Classification System (NAICS).
The EXIM Bank Charter requires the EXIM Bank to make at least 25 percent of its overall loan, guarantee, and insurance authority to supporting financing of exports by “small business concerns,” as defined by the Small Business Act, Section 3. Historically, the EXIM Bank relied on the SBA’s industry-based size standards to determine which participants in its programs may be considered small businesses. Continue Reading Export-Import Bank Proposes to Adopt Small Business Jobs Act Standard for Size Determination