Weekly Update for Government Contractors and Commercial Businesses – January 2022

PilieroMazza PLLC

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LABOR & EMPLOYMENT

Government Contractors to Register for Affirmative Action Program Compliance Certification Beginning February 1, 2022, January 10, 2022, Sara Nasseri
In December 2021, the Office of Federal Contract Compliance Programs (OFCCP) launched its Affirmative Action Program Verification Interface through a new online portal (Portal).  Beginning on February 1, 2022, registration opens on the Portal, and covered prime and subcontractors are required to certify compliance of their Affirmative Action Program (AAP) by no later than June 30, 2022. Covered contractors are then required to annually certify.  The Portal also provides a secure platform for scheduled contractors to submit their AAP to OFCCP during compliance evaluations.  In this Client Alert, PilieroMazza’s Labor & Employment Group gives an overview of the Portal, the AAP compliance requirements, and important deadlines. Read more here.

Record Number of States Raise Minimum Wage
The Hill reported that millions of low-wage workers are starting the new year with a pay increase as new laws take effect in dozens of states and cities across the country. Minimum wages rose in 21 states and 35 cities and counties at the new year, according to the National Employment Law Project (NELP). Two of those states—California and New York—increased the minimum hourly wage to $15 for employees of large corporations. Read more here.

Ban the Box Hiring Law Now Applies to U.S. Federal Contracts
Bloomberg Law reported that federal contractors can no longer inquire about an applicant’s criminal history before extending a conditional job offer to work on a government contract. The new prohibition stems from a Trump-era defense policy law and is tucked into the National Defense Authorization Act for Fiscal 2020. The restriction took effect December 20, 2021, and a proposed rule that could guide compliance is expected in the coming days. Read more here.

PF 2022-15 Revisions to the Employee Compensation: Pay and Benefits Corporate H Clause
The Department of Energy published a policy flash to communicate revisions to the contractual requirements related to the Employee Compensation: Pay and Benefits Corporate H Clause, and to require Heads of Contracting Activities to establish local procedures to manage newly implemented flexibilities. The policy flash also mentions that Contracting Officers will have to take appropriate actions, including modifying existing contracts as appropriate to incorporate the revised H clause, no later than February 15, 2022. Read more here. Read the revised H clause here.

Department of Labor Finds Garland Home Healthcare Agencies Failed to Pay $1.2M in Minimum Wage & Overtime Wages
The Department of Labor announced that a DOL Wage and Hour Division investigation determined Vital Home Health Care Inc. and Comfort Home Health Care Inc. violated the Fair Labor Standards Act’s minimum wage and overtime requirements by failing to pay employees for all the hours they worked and failing to pay overtime as required. The employer also violated FLSA record-keeping provisions by failing to record all hours worked by employees. The investigation led the division to recover $1,218,320 in back wages for 202 workers. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: PubK Annual Review 2022 – Labor and Employment, January 24, 2022, Nichole Atallah. Read more here.

GOVERNMENT CONTRACTS

DOD Class Deviation Imposes New Requirements for Nonavailability Waiver Determinations Under the Buy American Statute, January 7, 2022, Jackie Unger and Anna Sullivan
The Department of Defense (DOD) recently published a class deviation that builds on directives to promote an accountable and transparent procurement policy while maximizing Government use of goods, products, and materials produced in, and services offered in, the U.S. Specifically, the class deviation outlines steps that contracting officers (CO) should take as they make individual nonavailability waiver determinations under the Buy American statute. Such waivers can exempt an acquisition from meeting Buy American requirements. This blog identifies key aspects of the class deviation and its impact on the process for obtaining individual nonavailability waiver determinations, which can alter the competitive landscape of an acquisition. Read more here.

Kevin Barnett Contributes to Latest Edition of Thomson Reuters’ Attorney-Client Privilege in the United States, January 6, 2022, Kevin Barnett
PilieroMazza’s Kevin Barnett is a contributing author to the latest annual edition of Attorney-Client Privilege in the United States. Since the primary author Professor Paul Rice’s untimely death in 2012, Kevin and five other colleagues diligently collaborate to update annual editions of this invaluable work.  As a result, Attorney-Client Privilege in the United States remains the most current and complete treatment of attorney-client privilege available and is routinely cited by U.S. Circuit Courts of Appeals, state Supreme Courts, and other federal courts, including in the seminal D.C. Circuit case, In re Kellogg Brown & Root, Inc. Read more here.

2021 GAO Bid Protest Annual Report: What the Report Reveals About Bid Protests at the GAO, January 6, 2022, Jackie Unger and Anna Sullivan
The recently released 2021 Bid Protest Annual Report (Report) from the Government Accountability Office (GAO) covers cases filed with the agency, including protests, cost claims, and requests for reconsideration.  In this blog, PilieroMazza analyzes what the Report reveals about bid protests at the GAO, including how the information could affect a contractor’s decision to file a protest and its likelihood of success. Read more here.

Establishing Irreparable Harm in Bid Protests: Does the Value of the Lost Opportunity Really Matter?, January 5, 2022, Katherine Burrows and Eric Valle
In a recent bid protest, A.T. Kearney Pub. Sector & Def. Servs., LLC v. United States,[1] the U.S. Court of Federal Claims (COFC) created a wrinkle in its precedent when it denied the protester’s motion for a preliminary injunction. While obtaining permanent injunctive relief is arguably the most important goal of any bid protest brought at the COFC, obtaining preliminary injunctive relief, a stay of award or performance while the protest is resolved, can sometimes be equally significant for business purposes. The COFC’s decision in Kearney may signal a shift in its evaluation of motions for preliminary injunction, which could impact future outcomes for protesters who seek a stay until the protest is resolved. Read more here.

2022 NDAA Makes Significant Changes to Federal Procurement Policy, December 27, 2021, Kevin Barnett
On December 27, 2021, President Biden signed the FY22 National Defense Authorization Act (NDAA) into law, authorizing more than $700 billion in defense spending. The NDAA also contains several provisions that shape federal procurement policies and forecast areas that Congress believes warrant attention in the future. PilieroMazza examines three themes in this year’s NDAA that contractors should know to take advantage of contract opportunities and maintain compliance requirements. Read more here.

DOD Releases CMMC 2.0 Framework Documentation, December 22, 2021, Anna Wright
Earlier this month, the Department of Defense (DOD) released the new Cybersecurity Maturity Model Certification (CMMC) 2.0 framework, along with the self-assessment guides for the new Levels 1 and 2, scoping guidance for all Levels, and other helpful tools for contractors seeking to perform self-assessments. Each of these documents is available on DOD’s CMMC website under the Documentation tab. PilieroMazza notes key highlights from DOD’s CMMC 2.0 Documentation for small and mid-sized defense contractors. Read more here.

Don’t Delay: How the Harmonia Decision Impacts Contractors’ Ability to Win Protests, December 21, 2021, Katherine Burrows and Eric Valle
A highly anticipated decision recently issued by the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) represents the latest development in the Blue & Gold line of precedent regarding the timeliness of bid protest filings before the U.S. Court of Federal Claims (COFC). In Harmonia Holdings Group, LLC v. United States, issued on December 7, 2021, the Federal Circuit held that a timely filed, pre-award, agency-level protest preserves an offeror’s ability to later file the same protest post-award with the COFC. However, the Federal Circuit warned that delays in filing a protest may result in “adverse consequences,” implying that the COFC may negatively consider such delays in determining whether “injunctive relief is appropriate.” We summarize this important decision, its impact on future bid protests, and offer guidance to government contractors. Read more here.

SBA Awards $1.1 Million to Support Native American-Owned Small Businesses, December 20, 2021, Peter Ford
Isabella Casillas Guzman of the U.S. Small Business Administration (SBA) announced on December 15, 2021, that SBA’s Office of Native American Affairs awarded $1.1 million in grants and contracts to seven entities.  The grants will provide business development services, management, and technical assistance to Native American-owned small businesses across the country. This monetary investment is a step in the right direction to help native-owned, small-business government contractors gain access to contracting opportunities. Read more here.

Spending, Tax Fights Loom for Congress After a Bustling 2021
Bloomberg Government reported that, as Congress reconvenes, taxes, climate initiatives, and how best to help U.S. companies compete against China will figure prominently in the legislative agenda, in addition to continued struggles over President Biden’s social safety net promises. The article details key legislation on the congressional agenda leading into 2022. Read more here.

IT GWAC Roundup
The General Services Administration (GSA) published a blog post to summarize the latest news about its small business Governmentwide Acquisition Contracts (GWACs) for industry leading into 2022. GSA’s small business GWACs enable the important missions of agencies across the federal government and drive progress on vital public policy objectives. GWACs also make it easier for new suppliers, especially small and disadvantaged businesses, to gain valuable growth opportunities through the federal IT marketplace. The highly qualified companies on GSA GWACs (and those to come) can complete almost any IT service requirement including agile software development, artificial intelligence (AI), cloud computing, and other emerging technologies. Looking toward 2022, GSA will remain focused on providing important solutions for its industry partners and customer agencies; it will remain a top priority for GSA in the new year. Read more here.

GSA Government-Wide Cloud Multiple Award Blanket Purchase Agreement Coming in 2022
The General Services Administration (GSA) published a blog post on its intent to establish on a competitive basis a Government-wide Cloud Multiple Award Blanket Purchase Agreement (BPA) against the Multiple Award Schedule (MAS) 518210C “Cloud and Cloud-related IT Professional Services,” 54151S “IT Professional Services,” Order Level Materials (OLM), and Ancillary Special Item Numbers (SINs) — the Ancillary SIN is optional. The supplemental special notice can be viewed on SAM.gov: Special Notice: GSA Government-wide Cloud Blanket Purchase Agreement (BPA). Read more here.

Statement by GSA Administrator Carnahan on President Biden’s Executive Order on Improving Customer Experience and Government Services for the American People
The General Services Administration (GSA) published GSA Administrator Robin Carnahan’s statement on President Biden’s Executive Order on Improving Customer Experience and Government Services for the American People. According to Carnahan’s statement, under the Executive Order, GSA will:

  • Create a product roadmap for creating shared services organized around major life experiences;
  • Develop a digital ‘federal front door’ that includes USA.gov, and explore bringing in sites like benefits.gov, and grants.gov into that federal front door;
  • Dedicate multi-disciplinary teams to support High Impact Service Providers (HISPs), which are public-facing services designed to have a high impact on the public, while aligning with state and local governments as much as possible; and
  • Work with the Department of Veterans Affairs (VA) to provide seamless integration with login.gov accounts for customers that eliminate outdated and duplicative sign-in options.

Read more here.

CMMC Assessments Could Resume in January
Federal Computer Week (FCW) reported that assessments could resume in early 2022 for the Department of Defense’s unified cybersecurity standard for contractors, the Cybersecurity Maturity Model Certification (CMMC) program. According to FCW, Jon Hanny, the director of operations and chief information security officer for the CMMC Accreditation Body, said during a December 20, 2021, virtual town hall that procedures for certified third-party assessment organizations (C3PAOs) should resume by the end of January. Read more here.

Treasury Awards $8.7 Billion for Lending in Minority Communities
USA Today reported that the U.S. Treasury Department announced the release of $8.7 billion to help increase lending to small and minority-owned businesses and people living in poorer communities with limited access to banking. The funds from the Emergency Capital Investment Program will go to 186 community-based financial institutions. Read more here.

Identification of Federal Financial Assistance Infrastructure Programs Subject to the Build America, Buy America Provisions of the Infrastructure Investment and Jobs Act
The Office of Management and Budget (OMB) published a memorandum that provides initial OMB guidance regarding identification of programs that agencies must include in 60-day reports required by the “Build America, Buy America Act,” (the Act) which was signed into law as part of the Infrastructure Investment and Jobs Act. The Act requires that within 60 days of its enactment on January 14, 2022, each agency must submit to the OMB and Congress a report listing all federal financial assistance programs for infrastructure administered by the agency. In these 60-day reports, agencies are required to identify and provide a list of which of these programs are “deficient,” as defined in the Act. Additional OMB guidance will be forthcoming to address additional requirements in the Act. Read more here.

NSA, CISA, Add Original Equipment Manufacturers to Audience for 5G Security Guidance
Nextgov reported that the National Security Agency (NSA) and Cybersecurity and Infrastructure Security Agency (CISA) issued guidance on securing the largely virtualized computing architectures that are expected to reign in the future.  The guidance addresses original equipment manufacturers of networking gear and stresses the importance of establishing trust through the hardware level. This guidance on ensuring the integrity of cloud infrastructure and resources—such as image files referred to as containers because they carry all the code necessary to run an application—is the final installment of a four-part series the agencies produced on 5G security. Other publications in the series dealt with detecting and preventing lateral movement across networks, effectively isolating network resources, and protecting data while in-transit, in-use, and at-rest. Read more here.

Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability
The Executive Office of the President published a memorandum that provides direction for agency compliance with President Biden’s Executive Order on Catalyzing Clean Energy Industries and Jobs through Federal Sustainability (E.O.). The memorandum provides direction on immediate actions and further requirements to meet the policies and goals of the E.O., which requires bold action to transform federal procurement and operations and secure a transition to clean energy and sustainable technologies. Specifically, the memorandum provides direction to agencies on establishing agency targets to meet E.O. goals and sets forth associated planning and reporting requirements. It also outlines governance, oversight, and management functions for E.O. implementation, including duties of heads of agencies, appointment of an Agency Chief Sustainability Officer, and direction to specific agencies to provide coordination and support for government-wide implementation efforts. Read more here. Bloomberg Law’s coverage of how the executive order could impact contractors is available here.

Small Business Administration: Steps Taken to Verify Tribal Recognition for 8(a) Program
The Government Accountability Office published a report on its work to evaluate the effectiveness of Small Business Administration’s (SBA) verification of the tribal recognition of Indian tribes associated with 8(a) businesses applying to the program. The report addresses the extent to which business applicants certified to participate in the 8(a) program were associated with a recognized Indian tribe as claimed for fiscal years 2018 through 2020 and what covert testing results demonstrated about SBA’s verification of tribal recognition status in fiscal year 2021. Read more here.

Top Fiscal Year 2022 DOD Management Challenges
The Department of Defense (DOD) Office of Inspector General published its annual statement to summarize what it considers to be the most serious management and performance challenges facing DOD. The statement also assesses DOD’s progress in addressing those challenges. Read more here.

NAICS Revision for 2022: Update of Statistical Policy Directive No. 8, NAICS: Classification of Establishments, and Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises
The Office of Management and Budget (OMB) published a notice to announce its final decisions to accept the recommendations of the Economic Classification Policy Committee (ECPC) for 2022 revisions to the North American Industry Classification System (NAICS), as well as the recommendations to update OMB Statistical Policy Directive No. 8, NAICS: Classification of Establishments and to eliminate OMB Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises. In large part, the revisions for NAICS are designed to address decreasing usefulness of employing the mode of delivery (online versus in store / print) as an industry delineation criterion in the Wholesale Trade, Retail Trade, and Information sectors, since the internet has developed from a specialized activity to a generic method of delivery for goods and services. Therefore, the 2022 revisions to NAICS reflect a deemphasis on the delivery method as an industry function used in NAICS classification. In addition, OMB accepted ECPC recommendations with respect to biobased products manufacturing and renewable chemicals manufacturing topic areas, including the decision to continue research and outreach in the emerging area. Read more here.

FAR: Trade Agreements Thresholds
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration published a final rule that amends the Federal Acquisition Regulation to incorporate revised thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the U.S. Trade Representative. Approximately every two years, the thresholds are adjusted according to predetermined formulae under the agreements. The rule went into effect on January 1, 2022. Read more here. A summary presentation of a final rule is available here, and a corresponding small entity compliance guide is available here.

DFARS: Trade Agreements Thresholds
The Department of Defense published a final rule that amends the Defense Federal Acquisition Regulation Supplement to incorporate revised thresholds for application of the World Trade Organization Government Procurement Agreement and the Free Trade Agreements, as determined by the U.S. Trade Representative. The thresholds are adjusted every two years according to predetermined formulae set forth in the agreements. The rule went into effect on January 1, 2022. Read more here.

Class Deviation: U.S.-Mexico-Canada Agreement
The Department of Defense published a class deviation that updates the trade agreements thresholds as published by the U.S. Trade Representative in the Federal Register. Specifically, the class deviation implements the U.S.-Mexico-Canada Agreement (USMCA). The class deviation requires contracting officers to comply with deviations from the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement that implement the USMCA. The class deviation went into effect on January 1, 2022. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Small Business Subcontracting Plans: Making a Good Faith Effort and Compliance Tips, January 18, 2022, Cy Alba and Kevin Barnett. Read more here.

WEBINAR: Office of Hearing and Appeals (OHA) Year-In-Review: Impactful Decisions from 2021, January 19, 2022, Peter Ford and Meghan Leemon. Read more here.

WEBINAR: Unlocking the Secrets of Debriefings, Gov’t Evaluation of Proposals and Protests, January 25, 2022, Peter Ford and Meghan Leemon. Read more here.

BUSINESS & TRANSACTIONS

PilieroMazza Elevates 3 Attorneys to Partnership Ranks in 2022, January 5, 2022
PilieroMazza, a business law firm, is proud to announce that Jackie Unger and Sam Finnerty of the Firm’s Government Contracts Group and Dave Shafer of the Business & Transactions Group were promoted to partner as of January 1, 2022. Commenting on the new partners, Managing Partner Tony Franco remarked: “Jackie, Sam, and Dave are key contributors to the Firm’s success, offer the highest quality of service to our clients, and demonstrate sound judgment and commitment to our values. We’re delighted to welcome them as PilieroMazza’s newest partners.” Read more here.

Oracle Buys Medical Records Company Behind VA’s EHR Modernization for $28B
Federal News Network reported that Oracle is buying electronic medical records company Cerner in an all-cash deal valued at about $28.3 billion. Oracle will pay $95 per Cerner share, and the deal is expected to close this year. Cerner is the lead contractor on the Department of Veterans Affairs electronic health records modernization project. Read more here.

Upcoming Business & Transactions Presentations

WEBINAR: PubK Annual Review 2022 – Mergers and Acquisitions, January 26, 2022, Kathryn Hickey. Read more here.

LITIGATION & DISPUTE RESOLUTION

Oversight Committee Urges SBA to Take Action to Combat Fraud and Protect Disadvantaged Small Businesses
The House Committee on Oversight and Reform announced that members sent a letter to Small Business Administration (SBA) Administrator Isabella Casillas Guzman requesting documents and information about SBA’s efforts to mitigate the longstanding problem of fraud in small business set-aside contracting programs and to improve the certification process of eligible businesses. The bipartisan letter addresses longstanding concerns about fraud in small business set-asides, including the 8(a) Business Development, Women-Owned, Service-Disabled Veteran-Owned, and Historically Underutilized Business Zone (HUBZone) programs. Read more here.

Information Technology Contractor Agrees to Pay More Than $1.3 Million to Settle Federal False Claims Act Allegations of Overbilling
The Department of Justice reported that Telophase Corporation has agreed to pay the U.S. $1,389,509 to resolve federal False Claims Act allegations that it overbilled the National Aeronautics and Space Administration for labor hours worked and for labor rates and costs in excess of those actually incurred. Read more here.

Six Aerospace Executives and Managers Indicted for Leading Roles in Labor Market Conspiracy that Limited Workers’ Mobility and Career Prospects
The Department of Justice reported that a federal grand jury returned an indictment charging a former manager of a major aerospace engineering company and five executives of outsource engineering suppliers (Suppliers) for participating in a long-running conspiracy to restrict the hiring and recruiting of employees among their respective companies. The conspiracy affected thousands of engineers and other skilled workers in the aerospace industry who perform services in the design, manufacturing, and servicing of aircraft components for both commercial and military purposes. The indictment is the first in an ongoing investigation into labor market allocation in the aerospace engineering services industry. Read more here.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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