Weekly Update for Government Contractors and Commercial Businesses – November 2021 #2

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GOVERNMENT CONTRACTS

GSA Polaris and the New SCRM Requirements: Supply Chain Risk May Put Your Proposal at Risk, November 22, 2021, Cy Alba
With the release of GSA Polaris around the corner, one looming issue remains: Contractors may lose out on an award or, perhaps worse, they may find themselves without access to task orders after being granted a Polaris award due to the increasingly stringent requirements of Supply Chain Risk Management (SCRM). In this blog, Isaias “Cy” Alba, a partner in PilieroMazza’s Government Contracts Group, and John Cofrancesco, VP of Government Security Solutions at Fortress, reveal what government contractors should know now about SCRM requirements before putting their Polaris proposal at risk. Read more here.

New Infrastructure Bill and Its Impact on Disadvantaged Business Enterprises in the Construction Industry, November 11, 2021, Jackie Unger
The Infrastructure Investment and Jobs Act (the Bill) will have significant impacts for construction contractors participating in the Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) Program. The Bill makes a portion of its $1.2 trillion available for surface transportation projects and addresses aid to federal highways, transit, highway safety, motor carrier, research, hazardous materials, and rail programs. DOT’s DBE Program permits states to set up DBE programs, in compliance with DOT standards, that promote contracting opportunities for DBE firms through infrastructure projects initiated by state and local governments and funded at least in part by DOT. To be certified as a DBE, a firm must be a for-profit small business and must be majority-owned and controlled by socially and economically disadvantaged individuals. PilieroMazza addresses three important aspects of the Bill that will impact contracting opportunities under the DOT’s DBE Program. Read more here.

Biden Signs $1 Trillion Infrastructure Bill into Law
The Hill reported that, on November 15, 2021, President Biden signed into law the $1.2 trillion bipartisan infrastructure bill, sealing a major accomplishment of his first term. Read more here.

House Passes Giant Social-Policy and Climate Measure
The Hill reported that House Democrats passed their mammoth social spending and climate plan, which will now head to the Senate. Read more here. The Congressional Budget Office’s Summary of Cost Estimate for H.R. 5376, the Build Back Better Act is available here.

Senate to Adjourn, Reconvene to Resume NDAA Consideration November 29th
MeriTalk reported that, despite the previous wish to pass the Fiscal Year 2022 National Defense Authorization Act before going on Thanksgiving break, the Senate has adjourned until November 29th, when it will again take up the defense spending bill. Read more here.

Congressional Leaders Concede Another Stopgap Spending Bill ‘Likely’ as Negotiations Remain at Standstill
Government Executive reported that Congressional leadership is warning members to expect another stopgap funding bill next month, as the path to setting full-year appropriations remains littered with obstacles. Read more here.

OMB Warns of Hiring Freeze, Funding Gaps, If Congress Pursues Full-Year Continuing Resolution
Federal News Network reported that, per the Office of Management and Budget (OMB), several agencies would lose out on the funding needed to address new and emerging priorities if budget stalemates persist for the rest of the year. Specifically, OMB detailed a long list of Biden Administration priorities it believes would be underfunded or misaligned if Congress could not pass dedicated, full-year funding for the rest of the fiscal year. The current continuing resolution, which provided agencies with temporary stop-gap funding needed to avoid a government shutdown at the end of September, expires December 3, 2021. Read more here.

Biden Signs Executive Order to Improve Safety, Justice for Native Americans
ABC News reported that, marking National Native American Heritage Month, President Biden participated in a tribal nations summit on November 15, 2021, announcing new steps by his administration to protect tribal lands and strengthen public safety. During the summit, Biden signed a new executive order directing the departments of Justice, Interior, Homeland Security and Health and Human Services to create a “comprehensive strategy to improve public safety and justice for Native Americans.” He also proposed a 20-year ban on federal oil and gas leases in Chaco Canyon and surrounding areas in northwestern New Mexico. Read more here.

CMMC 2.0: 7 Key Takeaways to Help Government Contractors Prepare, November 15, 2021, Anna Wright
On November 4, 2021, the Department of Defense (DOD) dropped a bombshell press release stating it plans to retract the Cybersecurity Maturity Model Certification (CMMC) 1.0 and replace it with a simplified, streamlined 2.0. The press release does not explain how DOD plans to simplify and streamline CMMC, but an Advance Notice of Proposed Rulemaking issued concurrently with the press release (and removed later the same day) contains some insights into the key changes DOD intends to make. An archived copy of the notice is available here, and DOD provided the same information during a CMMC Accreditation Body town hall meeting on November 10, 2021. PilieroMazza’s Cybersecurity & Data Privacy Group offers 7 key takeaways government contractors need to know to prepare for CMMC 2.0. Read more here.

CMMC 2.0 Could Take as Long as Two Years to Come Online
Federal News Network reported that, while the Pentagon is encouraging defense contractors to follow cybersecurity practices laid out by the National Institute of Standards and Technology, new requirements will not appear in contracts for at least nine months, with the potential for the rulemaking process to stretch out as late as fall 2023. Read more here.

Biden Signs into Law Bill to Secure Telecommunications Systems Against Foreign Threats
The Hill reported that, on November 11, 2021, President Biden signed into law bipartisan legislation to secure telecommunications systems against potential foreign threats, particularly from those linked to China. The Secure Equipment Act will ban the Federal Communications Commission (FCC) from considering or issuing authorization for products from companies on the FCC’s “covered list,” which includes Chinese telecommunications groups Huawei and ZTE. Read more here.

White House Fact Sheet: Vice President Harris Announces Initiatives on Space and Cybersecurity
The White House published a fact sheet stating that Vice President Harris announced a number of collaborative initiatives that the U.S. will undertake alongside France and other countries to address global issues and emerging threats. These initiatives follow the Vice President’s meeting with President Emmanuel Macron and will include expanded cooperation on space and support for efforts to advance international cooperation in cybersecurity. According to the fact sheet, the U.S. is “committed to working alongside its allies and partners to advance cybersecurity and uphold established global norms in cyberspace.” Specifically, the U.S. will support the Paris Call for Trust and Security in Cyberspace, which the White House labeled as “a voluntary commitment to work with the international community to advance cybersecurity and preserve the open, interoperable, secure, and reliable internet.” Read more here.

OMB Official Reviews Progress Six Months After Cyber EO
Federal Computer Week reported that Director of Federal Civilian Cybersecurity for the Office of Management and Budget (OMB) Steven McAndrews, one of the federal officials tasked with overseeing the execution of President Biden’s cybersecurity executive order, said agencies have “come a long way” in meeting the executive order’s aggressive deadlines and ambitious targets. He further explained that his office was working closely with agencies and industry partners after laying out a vision through a series of guidelines to help stakeholders improve their cyber posture. The executive order required all federal agencies to adopt multi-factor authentication and encryption for data at rest and in transit by November 8, 2021, 180 days after President Biden announced the sweeping directives. Read more here.

Reducing Cyber Supply Chain Risks
The General Services Administration (GSA) published a blog on cyber supply chain risks. In the post, GSA provides information on current threats to the global supply chain ecosystem; proactive and operational technology acquisitions measures federal agencies can take to reduce their cyber supply chain risks; GSA resources available to help agencies reduce supply chain risk; and updates on the development of GSA’s Vendor Risk Assessment Program. Read more here.

White House Prepares Order to Clarify Top Cyber Roles in Federal Government
CyberScoop reported that, according to National Cyber Director Chris Inglis, the Biden Administration is working on an executive order to spell out the responsibilities of myriad top cybersecurity officials in the federal government. According to CyberScoop, the idea behind the order would be to solidify the position of the Office of the National Cyber Director, which was established by law only in January. The executive order would be the second major cybersecurity executive order of the administration, following May’s sweeping directive for federal agencies and contractors to improve their digital defenses. Read more here.

DHA Performing Some Much-Needed IT System House Cleaning
Federal News Network reported that the Defense Health Agency (DHA) inherited hundreds of technology contracts when the Department of Defense created it to improve governance and coordination among military healthcare facilities eight years ago. According to Federal News Network, Pat Flanders, the Chief Information Officer at DHA, has said that these contracts were not developed to support a centralized infrastructure and that the agency now aims to consolidate and standardize more than 200 separate contracts down to less than 10 over the next three to four years. Read more here.

State Department CDO Makes Diversity Top Management Priority Under Data Strategy
Federal News Network reported that State Department (DOS) Chief Data Officer Matthew Graviss, along with an Enterprise Data Council, will oversee implementation of the State Department’s Enterprise Data Strategy. DOS’s Enterprise Data Strategy outlines the central role data plays in emerging technology and how it is needed to remain competitive against global threats. Additionally, the strategy calls for greater access to data across the DOS, increased data fluency across the workforce, and better governance to ensure data security. According to Federal News Network, Graviss said that the Enterprise Data Strategy “marks a commitment to culture change, which is the first goal of the [Enterprise Data Strategy].” The rollout of the Enterprise Data Strategy, he said, began with a management theme of diversity, equity, inclusion, and accessibility, as well as a mission theme of strategic competition, “which highlights the importance of using data as an instrument of diplomacy to engage competitor countries.” Read more here.

SBA Strategic Plan for Fiscal Years 2022–2026
The Small Business Administration (SBA) released its Strategic Plan for fiscal years 2022 through 2026. The Strategic Plan outlines SBA’s key goals and objectives for the upcoming years to ensure that its programs are managed effectively and efficiently. Public comments on SBA’s Strategic Plan are due November 19, 2021. Read more here.

A Discussion with SBA Administrator Isabella Casillas Guzman
The House Committee on Small Business met for a hearing with Isabella Casillas Guzman, Administrator of the Small Business Administration (SBA). Their discussion covered Administrator Guzman’s vision for the agency as it emerges from the pandemic and opportunities and challenges that exist for small businesses. Read more here. A recording of the hearing is available here.

GSA Funds 14 Digital Projects with $150M from American Rescue Plan
FedScoop reported that the General Services Administration (GSA) is using part of the $150 million it received under the American Rescue Plan Act to fund 14 citizen-facing digital service projects. Specifically, GSA’s Technology Transformation Services selected 14 projects to fit the plan’s themes of recovering, rebuilding, and reimagining emergency support and services to Americans affected by COVID-19. The projects include investing in cloud adoption and reuse, streamlining identity verification, and automating farmers’ debt relief processes. Read more here.

Upcoming Customer Experience Executive Order Underscores Biden’s Equity Goals
Federal News Network reported that the Biden Administration is working on an executive order focused on improving customer experience within government. This effort builds on the Administration’s ongoing work to improve the equity of public-facing services. According to Federal News Network, a draft version of the executive order reflects plans that date back to at least this summer. Read more here.

DHA’s Updated Plan to Resize Military Health System Is Similar to Pre-Pandemic Strategy
FedScoop reported that the Defense Health Agency’s (DHA) updated plan to “right size” the Military Health System involves moving about 200,000 TRICARE beneficiaries to private medical networks and closing less than 7% of the Defense Department’s military treatment facilities. The update comes after DHA was forced to rethink its path forward after the COVID-19 pandemic showed stress in some private healthcare networks and forced some clinics to close. Despite those variables, DHA has confirmed that the readjusted plan is similar to pre-pandemic expectations. Read more here.

USAID and OFAC Meeting for Implementing Partners in Afghanistan
The U.S. Agency for International Development (USAID) hosted a meeting with the Office of Foreign Assets Control on November 5, 2021, for Afghanistan Implementing Partners to answer frequently asked questions. Information on those questions and more are included in their slide deck, which is available here. Additional guidance and responses to frequently asked questions from USAID for Afghanistan Implementing Partners are available here and here.

Definition of Surviving Spouse for Service-Disabled Veteran-Owned Small Businesses and Change to 8(a) Business Development Contracting Thresholds
The Small Business Administration (SBA) published a direct final rule to make technical changes to SBA regulations that conform those regulations with recent statutory changes. The direct final rule:

  • incorporates a required change to SBA’s ownership requirements for small business concerns owned and controlled by service-disabled veterans, adopting changes to the treatment of certain surviving spouses made by the 2020 National Defense Authorization Act;
  • incorporates changes to the dollar thresholds for certain contracting actions authorized for the 8(a) Business Development program made by the 2020 National Defense Authorization Act; and
  • adjusts the competitive threshold dollar levels authorized for SBA’s contracting programs to changes made to the Federal Acquisition Regulation due to inflation.

The rule is effective on February 7, 2022. Comments are due December 8, 2021. Read more here.

DOD Class Deviation: Prohibition on Use of the Governmentwide Commercial Purchase Card for Certain Contracts
The Department of Defense published a class deviation, which states that, effective immediately, contracting officers shall not authorize use of the Governmentwide Commercial Purchase Card as a method of purchase or payment against a contract that contains Federal Acquisition Regulation clause 52.229-12, Tax on Certain Foreign Procurements. The class deviation remains in effect until it is incorporated into the Defense Federal Acquisition Regulation Supplement or otherwise rescinded. Read more here.

Stakeholder Forum Recap: Get a Unique Entity ID at SAM.gov
On November 3, 2021, the General Services Administration’s Integrated Award Environment hosted an online stakeholder forum regarding Unique Entity IDs in SAM.gov. The presentation walked through how entities can get the new Unique Entity ID at SAM.gov when they do not need to complete the full entity registration. The presentation slide deck is available here and a recording of the forum is available here.

Upcoming Government Contracts Presentations

WEBINAR: Construction Webinar Series: The Infrastructure Bill’s Impact on DOT’s Disadvantaged Business Enterprise Program, December 8, 2021, Jackie Unger and Anna Sullivan. Read more here.

WEBINAR: Minimizing Your Legal Risk for Whistleblower Claims Under the False Claims Act, December 16, 2021, Matt Feinberg. Read more here.

LABOR & EMPLOYMENT

Biden Administration Revives Nondisplacement of Qualified Workers Under Service Contracts, November 19, 2021, Nichole Atallah
On November 18, 2021, the Biden Administration announced an executive order (EO) bringing back to life what was formerly EO 13495, Nondisplacement of Qualified Workers Under Service Contracts. The EO establishes that, where a federal government contract subject to the Service Contract Act expires and a follow-on contract is awarded for the same or similar services at the same location, a successor contractor must grant a right of first refusal to the predecessor contractor’s employees (other than management and supervisory employees) before offering the positions to non-predecessor employees. Government contractors need to be aware of the forthcoming regulations as they plan for new contracts. Read more here.

January 18 Marks New Deadline for Covered Federal Contractors to be Fully Vaccinated, November 12, 2021, Nichole Atallah, Sarah Nash, Sara Nasseri, and Matthew Stokes
On November 10, 2021, the Safer Federal Workforce Task Force updated its guidance regarding the deadline for covered contractors to meet vaccination requirements. The update extends the initial December 8, 2021, deadline to January 18, 2022. The updated guidance is available here and includes links to FAQs, which were also updated to address circumstances where the Centers for Disease Control and Prevention recommends delaying vaccination; to explain that the January 18th deadline applies to work performed at both contractor and federal agency workplaces; and to provide sample signage for contractors to post at covered workplaces. Read more here.

OSHA Suspends Enforcement of COVID-19 Vaccine Mandate for Businesses
The Hill reported that the Occupational Safety and Health Administration (OSHA) is suspending enforcement of the Biden Administration’s COVID-19 vaccine mandate for large private businesses after a federal appeals court upheld a stay on it. OSHA said in a statement that, while it is confident in its power to protect workers amid the pandemic, it is suspending activities related to the mandate, citing the pending litigation. Read more here.

Determination of Acting OMB Director Regarding Revised Safer Federal Workforce Task Force Guidance for Federal Contractors and Revised Economy & Efficiency Analysis
The Office of Management and Budget (OMB) published a notice of determination and request for comments, which communicates the OMB Director’s approval of the COVID-19 workplace safety protocols detailed in the Safer Federal Workforce Task Force guidance issued on November 10, 2021, based on its determination that compliance by federal contractors and subcontractors with the guidance will promote economy and efficiency in federal contracting. The notice rescinds and supersedes a prior notice issued on September 24, 2021, and comments are due December 16, 2021. Read more here.

DHS Chief Procurement Officer Message on New Procedures for Contractors in Response to the Ongoing COVID-19 Pandemic
The Department of Homeland Security (DHS) Chief Procurement Officer published a special notice regarding ongoing testing requirements for unvaccinated contractor employees. The notice clarifies that DHS’s implementation of Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, and all of the guidance provided by the Safer Federal Workforce Task Force concerning COVID-19 Workplace Safety: Agency Model Safety Principles, remain in effect. Read more here.

NASA Class Deviation from FAR for Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors
The National Aeronautics and Space Administration updated its procurement class deviation from the Federal Acquisition Regulation that implements the requirements of Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors. Among other items, the revised class deviation includes updates regarding cooperative agreements, tracking implementation of Executive Order 14042, and Federal Procurement Data System reporting. Read more here.

DOE Policy Flash Regarding Effective Dates for Including the COVID Contract Clause in Federal Contracts
The Department of Energy published a policy flash to explain that, while there have been revisions to the deadlines for contractor employee vaccinations, there has been no change to the effective dates in Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors. The policy flash goes on to say that this includes requirements to modify covered existing contracts at the point of option exercise or extension and to include the COVID-19 clause in new contracts awarded on or after November 14, 2021, (1) from solicitations issued before October 15, 2021, or new orders awarded on or after November 14, 2021, and (2) from solicitations issued before October 15, 2021, under existing indefinite-delivery contracts. Read more here.

GSA / FAS Launches Customer Tool to Track Progress for Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors
The General Services Administration published a blog post to announce that the Federal Acquisition Service (FAS) is assisting customer agencies in complying with Executive Order 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors, by bilaterally modifying all existing contracts and “contract-like instruments” awarded before October 15, 2021, to include the clause at FAR 52.223-99, as applicable. The post goes on to explain that, for indefinite-delivery, indefinite-quantity (IDIQ) contracts, including all Federal Supply Schedule contracts, Multi-Agency Contracts, and Governmentwide Acquisition Contracts, contractors must sign the modification no later than November 14, 2021, to be eligible for new orders. The post concludes by stating that FAS has developed the COVID Safety Protocols for Federal Contractors, an interactive dashboard that tracks modification status and lists it as “Accepted”, “Closed/Cancelled”, or “Pending”, and that Contracting Officers are encouraged to check the Modification Status Tracker before placing orders against FAS-managed IDIQ vehicles. Read more here.

Federal District Court Denies Two Initial Attempts at Blocking Federal Vaccine Mandate for Employees
Federal News Network reported that on November 8, 2021, a federal district court declined to block the Biden Administration’s vaccine mandate for employees, denying plaintiffs in two separate cases a chance at relief from President Biden’s September executive order. Read more here.

Labor Department Works to Rescind ‘Problematic’ Contractor Rule
Government Executive reported that the Department of Labor (DOL) announced that it is working to rescind a rule issued under the Trump Administration that clarified religious protections for federal contractors. According to Government Executive, Jenny Yang, Director of the DOL’s Office of Federal Contract Compliance Programs, claimed this was a “problematic” rule and that DOL’s proposal “would preserve the exemption for religious employers under Executive Order 11246,” which President Johnson issued in 1965 to prohibit discrimination in hiring and employment by federal contractors. Read more here.

In New Guide, OPM Urges Agencies to Weave Telework, Remote Work into Workforce Culture
Federal News Network reported that, to help contextualize the continued evolution of telework as a critical workplace option and to provide federal agencies with policy guidance on remote work, the Office of Personnel Management released a new telework and remote work guide to replace guidance it originally published in 2011. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: FLSA and Wage-and-Hour Issues for Restaurants, December 7, 2021, Matt Feinberg. Read more here.

LITIGATION & DISPUTE RESOLUTION

HHS OIG Updates the Health Care Fraud Self-Disclosure Protocol
Pub K reported that the Department of Health and Human Services Office of Inspector General released an update to its Health Care Fraud Self-Disclosure Protocol (SDP). The SDP can be used by healthcare providers, suppliers, or other individuals or entities subject to civil monetary penalties to voluntarily disclose self-discovered evidence of potential fraud. Among other items, the updated SDP increases the minimum amounts required to settle under the SDP to match new statutory minimum penalty amounts; requires SDP submissions to be made through HHS OIG’s website; and clarifies that disclosures must include damages to each affected federal healthcare program and the sum of all damages. The update made no changes to the timeline and content requirements of disclosures, the methods for calculating damages, or the approach of timely settlements with a lower multiplier and an exclusion release. Read more here.

DOD OIG Fiscal Year 2022 Oversight Plan
The Department of Defense (DOD) Office of Inspector General (OIG) published its Fiscal Year 2022 Oversight Plan. The plan describes the specific oversight projects the DOD OIG intends to conduct in Fiscal Year 2022 and how those projects are related to the top management challenges facing the DOD. Read more here.

Kaléo Inc. Agrees to Pay $12.7 Million to Resolve Allegations of False Claims for Anti-Overdose Drug
The Department of Justice reported that kaléo Inc. agreed to pay the U.S. $12.7 million to resolve allegations that kaléo caused the submission of false claims for the drug Evzio, an injectable form of naloxone hydrochloride indicated for use to reverse opioid overdose. Read more here.

Laboratory Owner Sentenced to 82 Months in Prison for COVID-19 Kickback Scheme
The Department of Justice reported that a Florida owner of multiple diagnostic testing laboratories was sentenced in the Southern District of Florida to 82 months in prison for a scheme to defraud the U.S. and to pay and receive kickbacks by exploiting regulatory waivers put in place to ensure access to healthcare during the COVID-19 pandemic. Read more here.

Medical Device Company Arthrex to Pay $16 Million to Resolve Kickback Allegations
The Department of Justice reported that Arthrex Inc. agreed to resolve allegations that it violated the False Claims Act by paying kickbacks that caused the submission of false claims to the Medicare program. According to the settlement, Arthrex Inc. has agreed to pay $16 million for allegedly paying kickbacks to a Colorado-based surgeon. Read more here.

Three Men Admit Roles in $50 Million Healthcare Fraud and Kickback Scheme
The Department of Justice reported that three men admitted their roles in a healthcare fraud and kickback scheme. According to documents filed in these cases and statements made in court, each defendant played a role in defrauding healthcare benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for completed doctors’ orders for durable medical equipment, namely orthotic braces. The defendants caused losses to Medicare, TRICARE, and CHAMPVA of approximately $50 million. Read more here.

Former U.S. Army Employee Sentenced for Kickback Scheme to Steer U.S. Government Contracts
The Department of Justice reported that a former civilian employee of the U.S. Army’s Directorate of Public Works was sentenced to two years in prison for a kickback scheme to steer government contracts for work at Camp Arifjan, a U.S. Army base in Kuwait. Read more here.

Upcoming Litigation & Dispute Resolution Presentations

WEBINAR: FLSA and Wage-and-Hour Issues for Restaurants, December 7, 2021, Matt Feinberg. Read more here.

WEBINAR: Minimizing Your Legal Risk for Whistleblower Claims Under the False Claims Act, December 16, 2021, Matt Feinberg. 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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