Weekly Update for Government Contractors and Commercial Businesses – October 2021

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BUSINESS & TRANSACTIONS

PilieroMazza’s GovCon M&A Team Advises MicroTech on Sale of Subsidiary Defined Technologies to Comcast Corporation, October 18, 2021
PilieroMazza is proud to announce that the Firm advised client MicroTechnologies, LLC (DBA MicroTech) in the successful sale of its subsidiary, Defined Technologies, to Comcast Corporation (NASDAQ: CMCSA). Leading the legal transaction team was Government Contracts partner, Isaias “Cy” Alba, joined by PilieroMazza Mergers & Acquisitions attorneys Dave Shafer and Michael Thurmond. Commenting on the sale, Cy remarked, “This transaction is advantageous for all parties involved, MicroTech will continue focusing on its core business and growth plans, while the transaction will allow Comcast to add new critical technologies to its portfolio and a key contract vehicle to its growing Federal sector business.” Read more here.

SEC Revisits Stalled Rules for Clawing Back Executive Bonuses
Bloomberg Tax reported that the Securities and Exchange Commission (SEC) is working to finish long-stalled rules that would restrict executive bonuses when firms misstate financial results. Specifically, the SEC re-proposed regulations that would force senior managers to return incentive pay that is based on incorrect information included in companies’ financial statements. The rules were required to be promulgated by the 2010 Dodd-Frank Act, and SEC Chair Gary Gensler described the proposal as an opportunity “to strengthen the transparency and quality of corporate financial statements.” Read more here.

LITIGATION & DISPUTE RESOLUTION

PilieroMazza Litigators Score Major Win for Tribally Owned Government Contractor, October 12, 2021
Attorneys from PilieroMazza’s Litigation & Dispute Resolution Group scored a major win on a motion to dismiss for a tribally owned government contractor and its employees facing complex trade secrets, non-compete / non-solicitation, and tortious interference litigation related to the award of a federal contract. The team, led by Practice Group Chair Matt Feinberg, included contributions from attorneys in the Firm’s Government Contracts and Labor & Employment practice groups. “We couldn’t be more pleased for our clients, who were completely exonerated,” said Matt. “The fact that our defense strategy combined efforts of attorneys from three of our four primary practice groups made this win a true team victory.” Read more here.

Deputy Attorney General Lisa O. Monaco Announces New Civil Cyber-Fraud Initiative
Deputy Attorney General Lisa O. Monaco announced the launch of the Department of Justice’s Civil Cyber-Fraud Initiative, which will use the False Claims Act to pursue cybersecurity-related fraud by government contractors and grant recipients. Read more here.

DOJ Expects Whistleblowers to Play “Significant Role” in False Claims Act Cases Against Contractors
FedScoop reported that the Department of Justice (DOJ) expects whistleblowers to play a “significant role” in cases brought against federal contractors that fail to disclose cyber breaches. According to FedScopp, Assistant Attorney General for DOJ’s Civil Division Brian Boynton said DOJ would work closely with insiders at federal contractors—including technology companies—whose concerns lead them to file qui tam lawsuits. Read more here.

Upcoming Litigation & Dispute Resolution Presentations

WEBINAR: Risk Prevention Strategies: FCA Risk Prevention for Government Contractors, October 27, 2021, Matt Feinberg and Camilla Hundley. Read more here.

LABOR & EMPLOYMENT

GSA Implementation of Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors
The General Services Administration (GSA) held an industry webinar regarding implementation of the vaccine mandate for federal contractors. Slides from the webinar are available here.

DOD Orders Texas Contractors to Mandate Vaccines for Employees, Despite Governor’s Ban
Government Executive reported that defense contractors and their employees in Texas must get the COVID-19 vaccine despite the governor’s executive order banning vaccine mandates. Specifically, Government Executive reported that the Department of Defense (DOD) reasoned that related federal guidance supersedes local laws, like the executive order issued by Texas Governor Greg Abbott. Read more here.

Removing Barriers to ESG Investments
The Department of Labor (DOL) proposed a rule that would allow fiduciaries to take into account climate change and other environmental, social, or governance (ESG) considerations in investment decision-making. Read more here. DOL’s press release on the proposed rule is available here, and a related fact sheet is available here.

Upcoming Labor & Employment Presentations

WEBINAR: Construction Webinar Series: Building Compliance: Construction Industry Concerns Under FCA, November 9, 2021, Cy Alba and Sarah Nash. Read more here.

WEBINAR: An Update on Workplace Policy, November 18, 2021, Sara Nasseri. Read more here.

GOVERNMENT CONTRACTS

President Biden Signs Bill to Raise Debt Ceiling
President Biden signed a bill to raise the debt ceiling, and the Hill reported that the increase in the debt ceiling averted a default until December. Read more here.

FAR Proposed Rule to Update WOSB Certification Requirements
The Department of Defense, General Services Administration, and National Aeronautics and Space Administration released a proposed rule that would amend the Federal Acquisition Regulation (FAR) to implement a Small Business Administration (SBA) final rule that requires women-owned small business concerns (WOSB) and economically disadvantaged women-owned small business concerns (EDWOSBs) to be certified to participate in the Procurement Program for WOSBs. The SBA rule requires that a business be certified as a WOSB or an EDWOSB by SBA, a certifying entity approved by SBA, or a federal or state government. The proposed rule would amend the FAR to include the certification requirement for WOSBs and EDWOSBs to be eligible to participate in WOSB set-aside or sole source awards. Comments are due December 6, 2021. Read more here.

Growing the Small Business Supplier Base in Government Contracting
The House Small Business Committee held a hearing titled “Growing the Small Business Supplier Base in Government Contracting.” The hearing examined Category Management and its impact on small businesses serving as federal prime contractors. It also explored potential solutions to reverse a partially related 40 percent contraction in the federal small business supplier base that has occurred over the last decade. Read more here.

Small Business Contracting: Actions Needed to Implement and Monitor DOD’s Small Business Strategy
The Government Accountability Office (GAO) published a report on Department of Defense (DOD) efforts to better engage with small businesses and coordinate small business programs across DOD. GAO found that, while DOD engages in many efforts to do business with small businesses, it could better coordinate its efforts and better implement and monitor the progress of its small business strategy. Read more here.

Statement by Secretary of Defense Lloyd J. Austin III on the Department of Defense Climate Adaptation Plan
The Department of Defense (DOD) published Secretary of Defense Lloyd J. Austin III’s statement regarding the DOD Climate Adaptation Plan. According to Austin’s statement, the Climate Adaptation Plan will be DOD’s guide for meeting the nation’s warfighting needs under increasingly extreme environmental conditions—and for maintaining force readiness and resilience well into the future. As directed by President Biden’s January 28, 2021, Executive Order 14008, Tackling the Climate Crisis at Home and Abroad, major federal agencies are required to develop adaptation and resilience plans to address their most significant climate risks and vulnerabilities. Read more here. All agency Climate Adaptation Plans are available here, and a fact sheet regarding the plans is available from the White House here.

Federal Acquisition Regulation: Minimizing the Risk of Climate Change in Federal Acquisitions
The Department of Defense (DOD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) published an advance notice of proposed rulemaking regarding potential amendments to the Federal Acquisition Regulation (FAR) by the Federal Acquisition Regulatory Council, which would ensure that major federal agency procurements minimize the risk of climate change. DOD, GSA, and NASA seek public input on a potential FAR amendment, and comments are due December 14, 2021. Read more here.

Improving Detection of Cybersecurity Vulnerabilities and Incidents on Federal Government Systems Through Endpoint Detection and Response
The Office of Management and Budget released a memorandum that instructs agency heads to assess the state of their endpoint detection and response (EDR) capabilities in coordination with the Cybersecurity and Infrastructure Security Agency (CISA). The memorandum requires agencies to provide CISA with access to their current EDR tools within 90 days, provide access to their future EDR solutions to enable proactive threat hunting activities and a coordinated response to advanced threats, and assess gaps in their EDR capabilities and ensure efforts are funded within 120 days. Agencies must also provide CISA personnel and contractors access to agency networks to support implementation of EDR tools. Furthermore, CISA is tasked with producing recommendations on accelerating EDR adoption plus developing and publishing a “technical reference architecture and maturity model for agency consumption.” Read more here. Related reporting from Federal Computer Week is available here.

Strategic Intent for Transition to Naval Enterprise Information Technology Services
FedScoop reported that, as outlined in a memorandum signed by Navy Chief Information Officer Aaron Weis and acting Assistant Secretary of the Navy for Research, Development and Acquisition Frederick Stefany, the Navy wants to transition its Information Technology (IT) to an enterprise services operational model, which the service says will help avoid the duplication of systems. The new strategy will change how the Navy acquires and uses IT and will get more commercial tech into the hands of staff. Read more here.

Breaking Down the Army’s New Network Plan
Federal Computer Week reported that the Army released its Unified Network Plan on October 8, 2021, detailing the path over the next 10 years to create a foundation needed to improve the Army’s data sharing and analytics capabilities. Read more here.

DOD Focuses on JWCC in Aftermath of JEDI Cloud Contract
Federal News Network reported that, in the aftermath of the legal dispute surrounding its Joint Enterprise Defense Infrastructure (JEDI) cloud contract—especially since the U.S. Supreme Court declined to hear Oracle’s challenge to how the contract was structured—the Department of Defense (DOD) turned its attention to the upcoming Joint Warfighter Cloud Capability (JWCC) program, which is expected to be awarded to multiple vendors. DOD is planning to issue direct solicitations to Microsoft and Amazon for the JWCC program, and once the solicitations have been issued, DOD will begin making the contract awards to the cloud providers. Read more here.

DOD Clearance Holders Will Be Under “Continuous Vetting”
Federal News Network reported that there are roughly 3.6 million Department of Defense (DOD) clearance holders in DOD’s initial version of a personnel vetting process that involves continuous record checks. This is a milestone in the “Trusted Workforce 2.0” model, which reforms the current personnel vetting process and creates one system that can be used governmentwide and that allows reciprocity across agencies. There are at least 30 non-DOD agencies that are either signed up to enroll or actively enrolling their cleared staff in the new system, including the General Services Administration and Department of Veterans Affairs. Read more here.

Fiscal Year 2021 Contractor Service Contract Reporting in the System for Award Management
The Department of Defense (DOD) published a memorandum that explains that contractors shall begin reporting Fiscal Year 2021 manpower data under applicable service contracts in the Service Contract Reporting (SCR) section of the System for Award Management (SAM). The memorandum goes on to say that, while DOD contractors must complete reporting per the terms of their contract, the SCR section of SAM will be available for reporting and corrections until January 31, 2022. Read more here.

Testimony of SBA Inspector General Hannibal “Mike” Ware Before House Small Business Committee
The Small Business Administration (SBA) Inspector General Hannibal “Mike” Ware provided testimony before the House Small Business Committee at a hearing titled “SBA Management Review: SBA IG Report on the Most Serious Management and Performance Challenges Facing the SBA.” Each year, the SBA Office of Inspector General releases a report on the most serious management and performance challenges facing SBA to focus attention on significant issues to enhance SBA effectiveness and programs. The House Small Business Committee hearing sought to allow Members to hear directly from Inspector General Ware regarding the report’s findings. Read more here. Inspector General Ware’s testimony is available here. SBA’s report on its most serious management and performance challenges is available for download here.

Census Bureau Small Business Pulse Survey Results
The Census Bureau released its Small Business Pulse Survey results. The Small Business Pulse Survey measures the effect of changing business conditions during the Coronavirus pandemic on U.S. small businesses. The data shows that 87.1% of U.S. manufacturing small businesses experienced a large or moderate increase in prices they pay for goods or services compared to what was normal before March 2020. Read more here.

OMB Launches Made in America Website
The Office of Management and Budget (OMB) has released MadeinAmerica.gov. The site will publish information on proposed waivers and waivers granted to agencies through all Made in America laws. Users will be able to view all waivers, including during the pre-solicitation phases of potential procurements—allowing manufacturers, contractors, and suppliers to identify opportunities that might otherwise go to foreign competitors. Related reporting on the site is available from Nextgov here.

DIU Announces $14M in DPA Title III Agreements for Small Unmanned Aerial Systems
Inside Defense reported that the Department of Defense’s Defense Innovation Unit (DIU) announced $14 million in Defense Production Act Title III agreements to strengthen the domestic small unmanned aerial systems (UAS) industrial base. DIU made eight awards in total as part of a larger strategy to accelerate the adoption of capable and secure small UAS through the Blue UAS effort. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Risk Prevention Strategies: FCA Risk Prevention for Government Contractors, October 27, 2021, Matt Feinberg and Camilla Hundley. Read more here.

WEBINAR: Construction Webinar Series: Building Compliance: Construction Industry Concerns Under FCA, November 9, 2021, Cy Alba and Sarah Nash. Read more here.

WEBINAR: An Update on Workplace Policy, November 18, 2021, Sara Nasseri. 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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