By Matt Freeman and Michael Schrier
On April 10, President Trump invoked his authority under 50 U.S.C. 1431 et seq. to authorize the VA to indemnify contractors “with regard to transactions directly responsive to the COVID-19 national emergency.” This statutory authority may provide FAR 52.250-1 contractual indemnity protection for VA contractors against insurance coverage gaps related to COVID-19.
Contractors manufacturing or distributing PPE, testing kits, medical treatments, and ventilators for the government may already receive legal protection from the Public Readiness and Emergency Preparedness (PREP) Act. The President’s order, however, may protect VA contractors providing other goods and services not currently eligible for PREP Act protection. The broad language of the President’s April 10th memo may provide contractual indemnity from the federal government concerning any COVID-19 related work for the VA.
In order to request COVID-19 related contractual indemnity for goods or services provided to the VA – either in a new contract or through a contract modification – contractors must identify insurance gaps, provide required information, and submit a request to the contracting officer under FAR Part 50. If approved, the contracting officer will incorporate FAR Clause 52.250-1 (Indemnification under Public Law 85-804) into the contract. It is also possible that a prime contractor may, with prior written approval from the Contracting Officer, provide FAR 52.250-1 indemnification to its subcontractors. Continue reading Have a VA contract responsive to COVID-19? Ask your Contracting Officer for FAR 52.250-1 Indemnity!
On February 10, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Acetris Health, LLC v. United States, regarding the sourcing of a drug’s active pharmaceutical ingredient (“API”) from a non-designated country under the Trade Agreements Act (TAA). The Federal Circuit decision indicated that pharmaceutical companies can source the API from non-designated countries, such as India or China, and still offer the end product for sale to the U.S. Government as “TAA-compliant,” as the TAA analysis turns on where a product is manufactured, versus where the API is sourced. Based on this analysis, the Court held that a pill manufactured in the United States was TAA-compliant even though the pill’s API was sourced from India.
For pharmaceutical and medical/surgical suppliers, alike, this decision could open up additional sources of supply once considered non-TAA-compliant. However, suppliers will still need to assess where a product is “substantially transformed” for purposes of the TAA before seeking to sell the product to the Government.
On March 27, 2017, President Trump took two coordinated actions to permanently eliminate the Fair Pay and Safe Workplaces (“FPSW”) regulations promulgated last summer and the underlying Executive Orders. Continue reading Fair Pay and Safe Workplaces Regulations and Executive Orders Are Rescinded
On October 24, 2016, the mandatory disclosure and arbitration provisions of the Fair Pay and Safe Workplaces (“FPSW”) Regulations and Guidance were preliminarily enjoined by the United States District Court for the Eastern District of Texas in Associated Builders and Contractors of Southeast Texas v. Rung, No. 1:16-cv-425-MAC. The paycheck transparency provisions remain, unaltered and in full force effective January 1, 2017. Continue reading Portions of Fair Pay and Safe Workplaces Regulations and Guidance Preliminarily Enjoined
Effective January 1, 2017, the minimum wage to be paid to workers performing work on or in connection with Federal contracts covered by Executive Order 13658 will be $10.20 per hour. The U.S. Department of Labor announced the increase in the federal contractor minimum wage in today’s Federal Register. Continue reading Federal Contractor Minimum Wage Rises to $10.20
Today, the FAR Council and the Department of Labor issued final regulations and final guidance implementing Executive Order 13673 – Fair Pay and Safe Workplaces. https://www.dol.gov/newsroom/releases/opa/opa20160824 The interlocking final regulations and final guidance, with an effective date of October 25, 2016, impose new requirements on federal contractors and subcontractors, including:
- Contractors, when bidding on new federal contracts valued at more than $500,000, will be required to disclose a three year look-back of all “labor law violations” (involving defined administrative merits determinations, civil judgments, and arbitral awards) arising under 14 different federal statutes and comparable state laws to the contracting officer. The contracting officer, with the assistance of a newly created Agency Labor Compliance Advisors, will review the labor law violations, determine whether the violations are serious, repeated, willful, or pervasive, and based on those determinations, decide whether the contractor is “responsible” enough to be awarded a federal contract.
- Subcontractors, with subcontracts worth more than $500,000, will be required to make similar three year look-back disclosures of labor law violations to the U.S. Department of Labor for that federal agency to make a determination as to whether the subcontractor’s history of labor law violations are serious, repeated, willful, or pervasive. The prime contractor is then required to making its own decision as to whether its subcontractors are “responsible” based on the Department of Labor’s determinations.
- Contractors and subcontractors with serious, repeated, willful, or pervasive labor law violations may be required to enter into labor compliance agreements – either before or after contract award – with designated federal agencies to mitigate or remediate histories of non-compliance as a condition to being deemed “responsible” to receive a federal contract or subcontract.
There are also new requirements concerning (1) Paycheck Transparency (what information must be listed on an employee’s or independent contractor’s paycheck); and (2) prohibitions on the use of arbitration to resolve employee claims unless the employee and contractor agree to use arbitration after the employee has a claim (effectively negating many pre-employment or company-wide arbitration agreements and plans).
The regulatory requirements outlined above have varied phase in periods, beginning October 25, 2016 through October 25, 2017. The final regulations and guidance will be published in tomorrow’s Federal Register.
We will be issuing a comprehensive Alert, with a more detailed analysis of this intricate and complicated regulatory scheme, soon.
Duane Morris special counsel Michael J. Schrier of the firm’s Washington, D.C. office will present on the “Prevailing Wage Requirements in Government Construction Contracts” during the American Bar Association (ABA) Section of Public Contract Law Annual Meeting on Friday, August 5, 2016, in San Francisco, California. Mr. Schrier’s presentation will take place from 7:00 a.m. to 8:30 a.m.
For more information on this program, please see the event listing on DuaneMorris.com.
On June 27, 2016, in the last decision of the 2015–2016 term, the U.S. Supreme Court, in McDonnell v. United States, No. 15-474, narrowed the type and character of “official acts” that could underpin corruption charges against a public official. Federal prosecutors contended that former Governor of Virginia Robert McDonnell was guilty of a variety of corruption charges for accepting $175,000 worth of loans, gifts and other benefits in exchange for what the government termed “official acts.” After being found guilty by a jury, McDonnell’s conviction was upheld on appeal, but ultimately reversed by the Supreme Court, which held that the jury instructions too broadly defined “official acts” as “acts that a public official customarily performs.” Instead, the Court concluded that it is impermissible to accept payment only for an “official act,” which it defined as a “decision or action” on a pending “question, matter, cause, suit, proceeding, or controversy,” and not a routine political action, such as setting up a meeting, call or event. The Court’s decision provides much-needed clarification to politicians and stakeholders alike regarding the scope of federal anti-corruption law.
To read the full text of the Alert, please visit www.duanemorris.com.
In an effort to bring its sex discrimination guidelines “from the ‘Mad Men’ era to the modern era,” on June 14, 2016, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a Final Rule containing sex discrimination guidelines for federal government contractors and subcontractors.
While many provisions in the updated guidelines simply bring the guidelines up to speed with current law, the guidelines contain important pronouncements of which every federal contractor should be aware – from pay discrimination and pregnancy accommodation to sex stereotyping and protections for transgendered employees.
To read the full text of this Duane Morris Alert, please visit www.duanemorris.com.
In a ruling affecting billions of dollars of government contracts, and impacting tens of thousands of veteran-owned small businesses across the United States, the U.S. Supreme Court unanimously upheld expanded competitive bidding opportunities for veteran-owned small businesses in Kingdomware Technologies v. United States, 14-916.
To read the full text of this Duane Morris Alert, please visit www.duanemorris.com.