Recently in Government Contracts Category

GSA May Abolish the Price Reduction Clause

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By Pillsbury Winthrop Shaw Pittman

Yesterday, Pillsbury attorneys John Jensen and Claire Cavaliero published their client alert titled GSA May Abolish the Price Reduction Clause. The Alert discusses the U.S. General Services Administration (GSA) recently issued proposed rule that could abolish the long-standing price reduction clause (PRC) from the GSA Schedule program. GSA is proposing to eliminate the clause and to use, instead, the submission of "transactional data reporting" to help achieve its goal of fair and reasonable pricing on all orders. The rule would require contractors to report transactional data for orders placed against GSA Federal Supply Schedule (FSS) and other GSA contracts. The proposed rule is designed to improve GSA's ability to conduct meaningful price analysis and more efficiently and effectively validate fair and reasonable pricing. It is also intended to reduce the burden on contractors imposed by the current GSA PRC.

Important New CWA Cases

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On March 10, 2015, the U.S. Court of Appeals for the Fourth Circuit issued an unpublished opinion in Precon Development Corporation, Inc., v. U.S. Army Corps of Engineers. For several years, Precon has been contesting the Corps' assertion of Clean Water Act (CWA) jurisdiction over Precon's planned commercial and residential development in Chesapeake, Virginia. At issue is the jurisdictional status of 4.8 acres of wetlands that Precon wants to fill in: Is this land subject to the Corps' permitting authority under Section 404 of the CWA because the wetlands are "water of the United States" on the basis of Justice Kennedy's "significant nexus" test, as explicated in the 2006 Supreme Court case of Rapanos v. United States, 547 U.S. __ (2006)?

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Lining Up to Bid Protest

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Today, my colleague Alex Tomaszczuk and I published our client alert Lining Up to Protest Bid -- protest dismissed as company fails to allege it was "next in line" for award. The Alert discusses the U.S. Court of Federal Claims' February 10, 2015 decision in Universal Marine Company, K.S.C. v. United States, No. 14-1115C, dismissing the bid protest complaint filed because the protester was not "next in line" for award of the contract and, therefore, lacked standing to protest. As noted in the Alert, this decision serves as a critical reminder for bid protesters of the necessity of demonstrating, through a carefully crafted complaint, that they were "prejudiced" by the agency's actions.

OFCCP Publishes Notice of Proposed Rulemaking re Sex Discrimination Guidelines

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The Office of Federal Contract Compliance Programs (OFCCP) recently announced the publication of a Notice of Proposed Rulemaking (NPRM) to revise and replace its Sex Discrimination Guidelines. The NPRM would rescind OFCCP's guidelines on federal contractors' obligations not to discriminate on the basis of sex under Executive Order 11246, as amended, and replace them with updated regulations. This update will be the first in more than four decades. It is expected to reflect present-day workplace realities and align OFCCP's guidelines with current law under Title VII of the Civil Rights Act of 1964. The proposed amendments will address compensation discrimination, sexual harassment, failure to provide workplace accommodations for pregnancy, and gender identity and family caregiving discrimination, among other topics.

The NPRM will be published in the Federal Register on January 30, 2015, and the public will have until March 31, 2015 (60 days) to provide comments.

Additional Sources: US Labor Department proposes critical updates to sex discrimination guidelines for federal contractors and subcontractors; OFCCP Proposes Updated Sex Discrimination Rule

A Cautionary Tale for Small and Large Businesses in a Mentor-Protégé Relationship: Size Appeal Of Kisan-Pike

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Yesterday, we published our client advisory titled A Cautionary Tale for Small and Large Businesses in a Mentor-Protégé Relationship: Size Appeal Of Kisan-Pike. The Advisory discusses the Small Business Administration ("SBA") Office of Hearings and Appeals' ("OHA") November 24, 2014 finding that a mentor-protégé joint venture agreement between Kisan Engineering Company P.C., a small 8(a) business, and The Pike Company Inc., its large business mentor, caused the joint venture to lose its status as a small business. As a result, the joint venture was not qualified to receive a contract award on a procurement reserved for small businesses. OHA disqualified the mentor-protégé joint venture despite the fact that the SBA had approved the Kisan-Pike mentor-protégé agreement, through which Pike was to mentor Kisan.

You Can't Change That - We Had a Deal!

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On December 9, 2014, the U.S. Civilian Board of Contract Appeals ("CBCA") decided Kiewit-Turner, a Joint Venture v. Department of Veterans Affairs, in which general contractor Kiewit-Turner ("KT") scored a major victory against the Department of Veterans Affairs ("VA"). The CBCA ruled that a change order required the VA to deliver a design that could be built for costs that were capped at a specified amount -- shifting risk to the owner from the contractor.

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CA Prevailing Wage Law ~ Revised Definition of "Construction"

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On September 30, 2014, Governor Edmund G. (Jerry) Brown Jr. signed into law California Assembly Bill 26 and Assembly Bill 2272, both of which are effective January 1, 2015. Existing law requiring payment of prevailing wages defines "public work" to include, in part, "[c]onstruction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds..." Cal. Lab. Code § 1720(a). AB 26 redefines "construction" to add "work performed during the postconstruction phases of construction, including, but not limited to, all cleanup work at the jobsite." Cal. Lab. Code § 1720(a)(1). Existing law otherwise contemplates fines for failure to pay prevailing wages and makes a willful violation of laws relating to the payment of prevailing wages on public works a misdemeanor.

Additional Source: California Department of Industrial Relations, California Prevail Wage Laws

Badge of Honor ~ NJ Requires Contractors' Employees to Wear Photo ID Badge

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Effective August 19, 2014, New Jersey Senate Bill 2363 went into effect, requiring contractors required to register under the Contractors' Registration Act, N.J.S.A. §§ 56:8-136, et seq. -- home improvement contractors -- to wear a state-issued identification badge "on the upper left corner of his torso when the contractor is performing, or engaging, or attempting to engage in the business of selling home improvements" at all times on the job. The badge includes a color photograph of the employee's face along with his/her name, and the contractor's registration number and business name. A new badge is required every six years. Governor Chris Christie signed into law S.B. 2363 on August 19, 2013. The bill was reportedly prompted by fears of potential scams on Superstorm Sandy victims. It is believed that requiring contractors' employees to wear these badges will add another layer of protection against fraud.

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City of Shasta Lake (CA) Issues Notice re Contractor Qualifications for Potable Water Projects

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Effective January 1, 2015, all contractors bidding on or performing work within the City of Shasta Lake, California involving connects to or modifications of the City of Shasta Lake's potable (fit or suitable for drinking) water distribution system will be required to have and to maintain a Water Distribution Operator, Grade 2 certification. This requirement applies to both work performed on the City of Shasta's system under contract with the City of Shasta and to work for a private developer or property owner. If you have questions, contact Jeff Tedder, City Engineer, 530-275-7423.

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Ruling Reinforces EPA's Broad Discretionary Powers in Reviewing Corps of Engineers 404 Permitting Decisions

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The celebrated case of Mingo Logan Coal Co. v. EPA was returned to the U.S. District Court of the District of Columbia after the Court of Appeals reversed the District Court's ruling that EPA had illegally invalidated a Army Corps of Engineers ("Corps") 404 permit issued to Mingo Logan's proposed coal mining operations in West Virginia. On March 14, 2014, the Supreme Court rejected any appeal of the DC Circuit's opinion, which is reported at 714 F. 3d 608. The District Court completed its review of the remaining APA issues and on September 30, 2014, ruled that EPA had broad authority under the law to veto a Corps permitting decision.

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Intergovernmental Immunity Protects Both the Federal Government and Its Contractor

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On September 19, 2014, the U.S. Court of Appeals for the Ninth Circuit held that California Senate Bill 990 violates the Constitutional doctrine of "intergovernmental immunity" because it directly regulates the activities of the US Department of Energy in violation of the Supremacy Clause. S.B. 990 prescribes state radioactive cleanup standards at the Santa Susan Field Laboratory, a site which is undergoing extensive cleanup by the federal government. The case is The Boeing Company v. Movassaghi, Acting Director of the California Department of Toxic Substance Control, et al.

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Federal Contractor Employee Salaries Not So Secret Any More

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On September 15, 2014, the Office of Federal Contract Compliance Programs (OFCCP) released its Notice of Proposed Rulemaking ("Proposed Rule") implementing President Obama's Executive Order 13665 ("EO 13665") (April 8, 2014), banning federal contractors from taking adverse action against employees and applicants who discuss their pay. EO 13665 instructs that, within 160 days of the date of EO 13665, the Secretary of Labor shall propose regulations prohibiting federal contractors from discharging or discriminating against employees or applicants who inquire about, discuss, or disclose their own compensation or compensation of other employees and applicants. The Proposed Rule will apply to nearly all federal contracts exceeding $10,000 entered into or modified on or after the effective date.

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Corrective Action Catch 22: Court of Federal Claims Holds Agency Action Must Be Rational Even If GAO Protest Decision Was Not

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By Pillsbury Winthrop Shaw Pittman

Today, Pillsbury attorneys Joël Van Over and Alex Ginsberg published their advisory titled Corrective Action Catch 22: Court of Federal Claims Holds Agency Action Must Be Rational Even If GAO Protest Decision Was Not. The Advisory discusses the U.S. Court of Federal Claims' July 15, 2014 decision in RUSH Construction, Inc. v. United States.

This decision reflects the unusual circumstance in which the court effectively sat in appellate review of an earlier bid protest decision by the Government Accountability Office (GAO) after the U.S. Army Corps of Engineers followed GAO's recommendation in that decision. The court ultimately overruled GAO when it found that it was arbitrary and capricious for the agency to follow GAO's recommendation. In so doing, the court cited numerous shortcomings in GAO's reasoning and its reliance on inapposite case law. The RUSH decision, authored by the Court of Federal Claims' new chief judge, may foretell greater judicial scrutiny of agency corrective action and a shift at the court away from deference to GAO's bid protest recommendations.

If you have any questions about the content of this blog, please contact the Pillsbury attorney with whom you regularly work or Joël Van Over or Alex Ginsberg, the authors of this blog.

Spotlight On Federal Contractors' Labor Practices

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Recently President Obama issued an Executive Order purportedly seeking to increase efficiency and cost savings in the work performed by parties who contract with the Federal Government by ensuring that they understand and comply with labor laws. In sum, the Executive Order requires contractors seeking federal contracts to disclose labor law violations, and to require their subcontractors to do the same, and creates new compliance advisers at agencies to oversee decisions about which contractors are awarded federal work.

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CA: Public Works Contractors Online Application System

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Recently enacted law establishes a new public works program to replace the Compliance Monitoring Unit and Labor Compliance Program requirements for bond-funded and other public works projects. Effective July 1, 2014, the California Department of Industrial Relations' (DIR) program covers all bond-funded and public works projects in the state rather than just selected processes. Public works refers to construction, alteration, demolition, installation, or repair work (including maintenance) done under contract and paid by public funds. It does not include those done by a public agency with its own employees. With minor exceptions, all workers employed on public works projects must be paid the prevailing wage determined by the Director of the DIR according to the type of work and location, and the prevailing wage rates are usually based on rates specified in collective bargaining agreements.

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