My colleagues Dick Oliver and Selena Brady recently published an alert discussing the Small Business Administration’s (SBA) long-awaited Final Rule regarding “Small Business Mentor Protégé Programs” that establishes a government-wide mentor protégé program for all small businesses, including Historically Underutilized Business Zone businesses, Women-Owned Small Businesses, Service-Disabled Veteran-Owned small businesses, and small businesses generally. Of note, the Final Rule enables virtually all federal contractors to quickly begin participating in the small business mentor protégé program. The alert is titled SBA’s Small Business Mentor Protégé Program Expands Opportunities for Small and Large Businesses.
In Supreme Court Validates “Implied Certification” Liability Under False Claims Act, we and our colleague Danielle Vrabie discuss the U.S. Supreme Court’s June 16, 2016 decision in Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7. The government contractor and health care communities had hoped the Court would use this case to narrow the scope of liability under the federal False Claims Act (FCA). That did not happen. Rather, a unanimous Court held that: (1) “implied certification” is a valid theory of liability under the FCA and (2) FCA liability for failing to disclose violations of legal requirements depends on the “materiality” of those requirements, not on whether those requirements were express conditions of payment. The Court’s holdings expand the scope of FCA liability previously recognized in several jurisdictions, resulting in a defeat for companies that sell to or seek reimbursement from the federal government.
Photo: Pixel Addict, Depressed, May 21, 2007 – Creative Commons
In Supreme Court: the VA Must Apply the “Rule of Two” in all Contracting Decisions, Pillsbury attorneys David Dixon and Dick Oliver discuss the U.S. Supreme Court’s June 16 unanimous ruling that the U.S. Department of Veterans Affairs (VA) must give preference to veteran-owned small businesses for all VA procurements as long as the requirements of the “Rule of Two” are met. This decision is expected to drastically alter the landscape for VA procurement. This ruling is Kingdomware Technologies, Inc. v. United States.
Photo: JeffOnWire, Department of Veterans Affairs Motto, Taken November 16, 2014 – Creative Commons
There are three types of bonds that afford financial protection in connection with a construction project: payment bonds, performance bonds, and bid bonds. Below is a primer on the differences between these bonds and who is protected by them.
Construction bonds may be required by contract or by statute. Although often issued by an insurance company, these bonds are not insurance. Instead, the surety guarantees to the obligee (the entity to which the bond is issued) that the principal (the party who is supposed to perform) will meet its obligations. Most construction bonds require the principal to sign a guarantee. Thus, if an obligation is not met and the surety is required to pay a claim, the surety generally has the right to seek recovery from the principal.
In FedRAMP Accelerates the Process for Federal Contractors to Obtain Cloud Service Provider Authorizations and DoD Revises its Cloud Computing Security Requirements Guide for FedRAMP+, my colleagues Brian Cruz, Selena Brady and I discuss cloud computing requirements for contractors in the federal market place. For those providing cloud services, it is a time of landmark changes.
Photo: Daniel Boyd, Clouds, Taken June 29, 2010 – Creative Commons
Caring Hearts Personal Home Serv., Inc. v. Burwell, a U.S. Court of Appeals for the Tenth Circuit Medicare reimbursement case, describes the challenges confronting federal administrative agencies and the regulated community at a time when the demands on and the growth of government are somewhat astonishing. Judge Gorsuch begins his opinion as follows:
“Executive agencies today are permitted not only to enforce legislation but to revise and reshape it through the exercise of so-called ‘delegated’ legislative authority… The number of formal rules these agencies have issued thanks to their delegated authority has grown so exuberantly it’s hard to keep up. The Code of Federal Regulations now clocks in at over 175,000 pages. And no one seems sure how many more hundreds of thousands (or maybe millions) of pages of less formal or ‘sub-regulatory’ policy manuals, directives, and the like might be found floating around these days. For some, all this delegated legislative activity by the executive branch raises interesting questions about the separation of powers… For others, it raises troubling questions about due process and fair notice—questions like whether and how people can be fairly expected to keep pace with and conform their conduct to all of this churning and changing ‘law’… But what happens if we reach the point where even these legislating agencies don’t know what their own ‘law’ is?”
For bid requests issued on or after July 1, 2016, California school districts, with approval of their governing board, may procure design-build contracts for projects in excess of $1M, awarding the contract to either the low bid or the best value. The threshold currently is $2.5M. The new threshold was enacted as part of Assembly Bill 1358 (Dababneh) and will remain in place until January 1, 2025, unless a later enacted statute deletes or extends that date. As those in the industry already familiar, “design-build” refers to “a project delivery process in which both the design and construction of a project are procured from a single entity.” Design-build contractors should also take note that the new law will require that certain information is verified under penalty of perjury.
Photo: Alan Levine, School, Taken May 24, 2012 – Creative Commons
Public works contracts awarded on or after July 1, 2016 will be subject to the more expansive definition of public works added by California Assembly Bill 219 (Daly). For purposes of Article 2 of California’s Labor Code, commencing with Section 1770, the term “public works” will include “the hauling and delivery of ready-mixed concrete to carry out a public works contract, with respect to contracts involving any state agency, including the California State University and the University of California, or any political subdivision of the state.” Those who will be encompassed within the new definition will be required to pay the applicable prevailing wage rate, which will be the rate for the geographic area in which the concrete factory or batching plant is located, and to provide employee payroll and time records, as specified.
In A New Cybersecurity Regime and a New Regulation to Mandate Secure Information Systems for Government Contractors, my colleague Travis Mullaney and I discuss Congress’ recent enactment of a wave of legislation to address ongoing cybersecurity threats, the Executive Branch’s recent adoption of new cybersecurity regulations, and other Federal initiatives that are underway and that will bring additional promised change requiring enhanced cybersecurity protections. In our Advisory, we discuss what government contractors need to do to prepare for these changes.
Photo: Intel Free Press, Computer Security, Taken Sep. 4, 2012 – Creative Commons
In Awardee Protests: A New Horizon?, my colleague John Jensen and I discuss a new decision from the U.S. Court of Federal Claims — National Air Cargo Group , Inc., v. U.S. — that opens the door to the possibility of a bid protest by an awardee under a multiple-award indefinite delivery, indefinite quantity (IDIQ) contract. Previous decisions had held that a multiple-award IDIQ awardee lacks standing to protest the government’s award of additional contracts.