Weekly Update for Government Contractors and Commercial Businesses - January 2021 #2

PilieroMazza PLLCLABOR & EMPLOYMENT

2021 Labor and Employment Spotlight: A List of Key Legal Updates for Employers, January 13, 2021, Nichole Atallah, Sara Nasseri, and Sarah Nash
Undeniably, 2020 was a year like no other. Faced with a global pandemic and a tumultuous election, employers were presented with a unique set of challenges and a myriad of new—and at times, very vague—laws and regulations. Despite the start of a new year and a new administration in just a week, much of 2020 still lingers on, including some of its novel policies. However, the new year and new administration also signal a shift in direction for labor and employment law, and employers should be prepared. Below, we summarize the most critical legal updates of 2020, highlight some of the laws we expect in 2021, and outline some important takeaways for employers moving forward. Read more here.

DOL Suspends Executive Order Banning Diversity Training
The Department of Labor’s (DOL) Office of Federal Contract Compliance Programs (OFCCP) issued a notice regarding Executive Order 13950—pertaining to diversity training by government agencies and contractors—in light of the preliminary injunction issued by the United States District Court for the Northern District of California that prohibits OFCCP from implementing, enforcing, or effectuating certain sections of the Executive Order. Specifically, OFCCP stated that it will (1) cease use of hotlines to collect information regarding contractors’ alleged noncompliance with Executive Order 13950; (2) cease investigations of any alleged noncompliance; (3) not publish any additional requests seeking information from individuals or entities regarding the training programs provided to government contractor employees; and (4) not enforce any provision required by Section 4(a) of Executive Order 13950 contained in government contracts or subcontracts. Read more here.

DOD Issues Class Deviation Regarding Executive Order 13950
The Department of Defense (DOD) issued a class deviation providing a revised clause for inclusion in government contracts related to Executive Order 13950, Combatting Race and Sex Stereotyping. The revised clause includes a notice that identifies the clause as inoperable until further notice, which reflects the DOD’s implementation of the preliminary injunction issued by the United States District Court for the Northern District of California enjoining Sections 4 and 5 of the Executive Order. The class deviation instructs contracting officers to take all steps necessary to ensure Section 4 of Executive Order 13950 is not implemented or enforced until further notice. Read more here.

EEOC’s Conciliation Final Rule to Take Effect in February
An Equal Employment Opportunity Commission (EEOC) final rule that allows employers to receive more information during a conciliation process to resolve workplace bias claims is slated to take effect in mid-February. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: Pub K’s Government Contracts Annual Review 2021: Labor and Employment Panel, January 25, 2021, Nichole Atallah. Read more here.

WEBINAR: May the Clause Be with You: FAR 52.223-6, Drug-Free Workplace, January 26, 2021, Sarah Nash. Read more here.

LITIGATION & DISPUTE RESOLUTION

DOJ Announces Nation’s First Settlement of Civil Case for PPP Loan Fraud, January 15, 2021, Matt Feinberg
On January 12, 2021, the U.S. Department of Justice (DOJ) entered into a settlement with California-based SlideBelts, Inc. and its president and chief executive officer in what is advertised as the country’s first settlement in a civil case arising out of fraud in the Paycheck Protection Program (PPP) loan program initiated through the Coronavirus Aid, Relief, and Economic Security Act. This first-of-its-kind settlement is a reminder to small businesses that received PPP loans to take their representations and certifications very seriously, whether in pursing forgiveness or seeking any future recovery loan through a program made available through Congressional action. Failure to do so places your business in the cross hairs of potential penalties that include significant monetary or criminal liability. Read more here.

DOJ Recovers over $2.2 Billion from False Claims Act Cases in Fiscal Year 2020
DOJ released its Fiscal Year 2020 False Claims Act Statistics. According to the report, DOJ obtained more than $2.2 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending September 30, 2020. Read more here.

GOVERNMENT CONTRACTS

The VA Issues Class Deviation: Important Changes Governing Limitations on Subcontracting Effective Immediately, January 15, 2021, Sam Finnerty
On December 23, 2020, the Department of Veterans Affairs (VA) issued a class deviation to implement the Small Business Administration’s (SBA) formulation of the limitations on subcontracting (LOS) and nonmanufacturer rule (NMR) for all VA contracts awarded to small businesses or under SBA socioeconomic programs. SBA’s formulation is outlined in its May 31, 2016, final rule. The VA’s class deviation follows the release of a Civilian Agency Acquisition Council (CAAC) letter, which authorized civilian agencies to issue such class deviations to promote regulatory conformity. The class deviation requires VA contracting officers to use specified alternate clauses in all set-aside procurements. For all VA procurements, SBA’s formulation of the LOS and NMR now governs, at least until the Federal Acquisition Regulation (FAR) is updated to conform to SBA’s rule changes. Read more here.

SBA to Publish Interim Final Rule on Extension of 8(a) Participation, January 12, 2021, Meghan Leemon
Both the Appropriations Act and the 2021 National Defense Authorization Act (NDAA) permit businesses who were participants in the 8(a) Business Development program on or before September 9, 2020, to extend their participation in the program for a period of one year. Accordingly, SBA is expected to publish a final rule incorporating this mandate tomorrow, January 13, 2021. This post gives key takeaways for government contractors seeking to extend participation in the 8(a) program. Read more here.

SBA Provides Direction for PPP Round Deux Loans and Second Draw Loans, January 12, 2021, Cy Alba
On January 6, 2021, SBA issued its first round of formal guidance for the new Paycheck Protection Program (PPP) and the second-draw PPP loans, which we first discussed here. SBA also gave some indication of plans for the second round of the PPP. SBA’s guidance can be found here for the next phase of PPP and here for the second-draw program. This post covers key updates for businesses that need access to this important source of relief funding. Read more here.

SBA Re-Opening PPP to All Lenders on January 19
The Small Business Administration (SBA) announced that it will re-open the Paycheck Protection Program (PPP) loan portal to submit First and Second Draw loan applications on January 19, 2021. Read more here.

SBA and Treasury Incorporate Economic Aid Act Amendments in PPP for New Loans
The Small Business Administration (SBA) and the Department of the Treasury (Treasury) published an interim final rule that incorporates amendments from the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) to the Paycheck Protection Program (PPP). The Economic Aid Act extended SBA authority to make PPP loans through March 31, 2021, and revised certain PPP requirements. The interim final rule incorporates the Economic Aid Act amendments required to be implemented by regulation within 10 days of enactment. It is intended to govern new PPP loans made under the Economic Aid Act, as well as applications for loan forgiveness on existing PPP loans where the loan forgiveness payment has not been remitted, and should not be construed to alter or affect the requirements applicable to PPP loans closed prior to its enactment, unless the provisions apply retroactively consistent with specific applicability provisions of the Economic Aid Act as identified in the rule. Unless otherwise specified, the provisions of the interim final rule are effective January 12, 2021. Comments are due February 16, 2021. Read more here.

SBA Implements Section 311 of the Economic Aid Act
The Small Business Administration (SBA) published an interim final rule which implements section 311 of the Economic Aid Act. The Economic Aid Act authorized SBA to guarantee additional loans under the temporary Paycheck Protection Program. Section 311 of the Economic Aid Act adds a second temporary program to SBA’s 7(a) Loan Program titled, “Paycheck Protection Program Second Draw Loans.” This interim final rule implements the key provisions of section 311 of the Economic Aid Act and requests public comment. The rule is effective January 12, 2021. Comments are due February 16, 2021. Read more here.

MAS Catalog Migration by March 31, 2021, and Overall Catalog Compliance
The General Services Administration (GSA) published a reminder that, to be in full compliance with the Multiple Award Schedule (MAS) Consolidation Mass Mod A812, all contractors must complete two important steps by March 31, 2021:

  • update their catalog in GSA Advantage; and
  • update their Price List.

To avoid catalog removal from GSA Advantage, contractors’ Schedule Input Programs or Electronic Data Interchange catalogs must be updated to the consolidated MAS Special Item Numbers prior to March 31, 2021. Read more here.

GSA Removes Drones from the Schedules
The General Services Administration (GSA) announced that most drones will be removed from the Schedules program because of the risk of non-compliance with the Trade Agreements Act and Section 889 of the 2019 NDAA. Only drones approved by the DOD Blue sUAS Program will remain on the Schedules. Read more here.

OMB Memo on Contract Type Decisions
The Office of Management and Budget (OMB) issued a memorandum that requires agencies to strengthen their attention to the consideration of contract type and risk. Read more here.

Amendment to LPTA Source Selection Process
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration published a final rule amending the FAR to implement a section of the NDAA for Fiscal Year 2019 that applies criteria for and limitations on the use of the lowest price technically acceptable (LPTA) source selection criteria in solicitations. The rule is effective February 16, 2021. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Where Is the Money? Agency Forecasts for 2021, January 25, 2021, Peter Ford. Read more here.

WEBINAR: Your Guiding Light to GSA’s New GWAC – Join Us for an In-Depth Review of GSA’s New Polaris RFP, January 27, 2021, Cy Alba. Read more here.

WEBINAR: COVID-19 Relief in 2021: What Small Businesses Need to Know, February 2, 2021, Cy AlbaNichole Atallah, and Kathryn Hickey. 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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