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March 4, 2021 By cs

How new ‘Made in America’ Executive Order could impact federal contractors

The full impact of President Biden’s “Made in America” executive order compelling federal contractors to purchase more U.S.-manufactured products won’t be clear for some time, according to experts.

Five days after taking office, Biden issued an executive order on January 25 to push federal agencies to buy more products made in the United States. It builds on current laws—the Buy American and Buy America statutes, passed in 1933 and 1982, respectively. The federal government spends about $600 billion annually in contracting and current laws giving preference to American companies are not always followed and haven’t been “substantially updated since 1954,” said a fact-sheet from the White House.

“The [executive order] directs the [Federal Acquisition Regulatory Council] to consider proposing rules to tighten up the [Buy American Acts] requirements,” so “there are no immediate changes,” said Adelicia Cliffe, partner at the law firm Crowell and Moring, who is part of the firm’s government contracts and international trade group. This is because any new rules will have to go through the formal rulemaking process.

Specifically, the executive order said that within 180 days, the FAR Council should consider: replacing the “component test” (which says that over 50% of a product’s cost must have a domestic origin), increasing the numerical threshold for domestic content requirements for construction materials and end products, and increasing the price preferences for domestic construction materials and end products.

Keep reading this article at: https://www.govexec.com/management/2021/02/how-bidens-made-america-executive-order-could-impact-federal-contractors/172259/

March 3, 2021 By cs

Microsoft’s president calls for bid protest reforms

After years of pain over the legal battles related to the Joint Enterprise Defense Infrastructure cloud contract, Microsoft is calling on Congress to take a look at the protest process.

During a Tuesday Senate Armed Services Committee hearing on emerging technologies and national security, Microsoft President Brad Smith said it’s time to examine the protest process because it does not keep up with the speed of technological innovation. Smith’s remarks come as continuing legal troubles threaten to sink JEDI, which Microsoft was re-awarded in September.

“We all want to ensure fairness,” Smith said. “And that includes a fair right to be heard. But we could definitely benefit from an accelerated timeline to do so.”

The Defense Department conceived the $10 billion JEDI concept around four years ago, but implementation has been held back because of multiple legal challenges from Oracle, IBM and Amazon Web Services throughout the procurement. Oracle recently filed a petition with the Supreme Court for a review of a decision on its own pre-award JEDI protest.

As it stands, a decision from a federal judge on a motion filed by Microsoft and DoD on portions of AWS’s protest alleging improper political influence in the award process by administration officials is pending.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2021/02/microsoft-president-calls-bid-protest-reforms/172248/

Also see: https://www.defenseone.com/policy/2021/02/should-pentagon-reform-its-bid-protest-rules/172260/

March 2, 2021 By cs

For government-furnished property, the government not granting an equitable adjustment may be a breach of contract

The Federal Circuit’s published decision in BGT Holdings LLC v. United States (Dec. 23, 2020) holds that the government’s refusal to adequately consider a contractor’s request for equitable adjustment (REA) could be considered a breach of contract.

In this case, BGT Holdings LLC (BGT) was appealing a dismissal of its claims by the Court of Federal Claims (COFC) in a dispute with the Navy.

BGT was performing a fixed-price contract to build and deliver a gas turbine generator for the Navy. As part of its performance, BGT was to receive and incorporate certain government-furnished equipment (GFE) into its deliverable. Well into performance, the Navy cancelled two of the GFE items, requiring BGT to purchase them on the open market. BGT filed an REA to recoup the costs to purchase the cancelled GFE, consistent with FAR § 52.245-1(d)(2)(i), Government Property and FAR § 52.243-1, Changes – Fixed-Price. The Navy rejected the REA.

On appeal, the Federal Circuit considered BGT’s five grounds for relief in its complaint:

The Navy’s withdrawal of the GFE was a constructive change, entitling BGT to an equitable adjustment;
The reduction of GFE was an official change to the contract for which BGT was entitled to an equitable adjustment;
The Navy breached its contractual duty to deliver the GFE, and therefore BGT was entitled to damages;
The Navy breached its contractual duty to provide an equitable adjustment after failing to deliver the GFE and obligating BGT to provide it; and
The Navy breached its implied duty of good faith and fair dealing by failing to deliver the GFE.

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1040080/for-government-furnished-property-the-government-not-granting-an-equitable-adjustment-may-be-a-breach-of-contract

March 1, 2021 By cs

GAO: DoD has increased use of fixed-price-incentive contracts but should assess contributions to outcomes

Department of Defense guidance encourages the use of fixed-price-incentive (FPI) contracts to acquire major weapon systems, where appropriate.

These contracts can provide contractors with incentives to keep costs in check and stay on schedule.

The Government Accountability Office (GAO) found that the DoD’s use of these contracts has increased since 2010; they accounted for about half of all DoD obligations for its major weapon systems in 2019. But the DoD has not assessed whether using these contracts has actually kept costs and schedules in line.

GAO recommended that the DoD assess its use of these contracts.

Over the 10-year period from fiscal years 2010 through 2019, obligations on FPI contracts for major defense acquisition programs (MDAPs) grew to account for almost half of the $65 billion in obligations for fiscal year 2019.

Keep reading this article at: https://www.hstoday.us/federal-pages/government-reports-and-summaries/dod-has-increased-their-use-but-should-assess-contributions-to-outcomes/

See GAO’s full report on this topic at: https://www.gao.gov/products/GAO-21-181

February 26, 2021 By cs

Future uncertain for industrial base as pandemic spreads

While the United States continues to deal with challenges posed by the COVID-19 pandemic, it is still too early to know how the health of the defense industry will fare in the long run, according to analysts.

“The magnitude of the virus … it’s really unknown, a lot of this just has to do with when the virus is going to go away, … how quickly [a vaccine] can be deployed,” Nick Jones, the National Defense Industrial Association’s director of regulatory policy, said in an interview. “COVID-19 is going to continue to be an issue until the virus is at very low levels, which may be who knows how long,” he added.

Jones’ comments echo sentiments expressed by Ellen Lord, the Pentagon’s undersecretary of defense for acquisition and sustainment. During a virtual Defense News conference in September, Lord said many of the effects of COVID-19 may be yet to come.

“All the reports that have come out in large part don’t reflect the hits that were taken by business,” she said. “There have been mixed reports in terms of revenue and profitability. I would contend that most of the effects of COVID haven’t yet been seen, because most companies gave their employees time off — they stretched out production, paid a lot of people for working 100 percent when, perhaps, they were only getting 50 percent of the hours in, and so forth.”

Keep reading this article at: https://www.nationaldefensemagazine.org/articles/2021/2/3/future-uncertain-for-industrial-base-as-pandemic-spreads

The National Defense Industrial Association’s second annual Vital Signs report on the health of the U.S. defense industrial base was released on Feb. 2, 2021. To download a copy, please click HERE.

The full impact of President Biden’s “Made in America” executive order compelling federal contractors to purchase more U.S.-manufactured products won’t be clear for some time, according to experts.

After years of pain over the legal battles related to the Joint Enterprise Defense Infrastructure cloud contract, Microsoft is calling on Congress to take a look at the protest process.

The Federal Circuit’s published decision in BGT Holdings LLC v. United States (Dec. 23, 2020) holds that the government’s refusal to adequately consider a contractor’s request for equitable adjustment (REA) could be considered a breach of contract.

Department of Defense guidance encourages the use of fixed-price-incentive (FPI) contracts to acquire major weapon systems, where appropriate.

While the United States continues to deal with challenges posed by the COVID-19 pandemic, it is still too early to know how the health of the defense industry will fare in the long run, according to analysts.

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