Weekly Update for Government Contractors and Commercial Businesses – July 2, 2021

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LABOR & EMPLOYMENT

DOL Announces Proposed Rulemaking to Protect Tipped Workers, Clarify Use of the Tip Credit
The Department of Labor (DOL) announced a Notice of Proposed Rulemaking to withdraw and re-propose one portion of the Tip Regulations Under the Fair Labor Standards Act to clarify the amount of non-tip producing work that a tipped employee can perform when an employer is taking a tip credit.

The proposed rule clarifies the following points:

• when an employee is working in a tipped occupation and the employee has performed a substantial amount of non-tipped labor, an employer can no longer take a tip credit and must pay the full federal minimum wage to the employee;
• an employer may only take a tip credit when tipped employees perform labor that is part of their tipped occupation;
• if an employee performs work that directly supports tip-producing work for a substantial amount of time (i.e. the directly supporting work either exceeds 20 percent of all of the hours worked during the employee’s workweek or exceeds 30 continuous minutes), that worker is no longer performing labor that is part of the tipped occupation; and
• employers may not take a tip credit for work that is not part of the tipped occupation.

Comments on the proposed rule are due August 23, 2021. Read more here.

GOVERNMENT CONTRACTS

Senate Confirms Robin Carnahan to Lead GSA
The General Services Administration (GSA) announced that the Senate confirmed Robin Carnahan as Administrator of the GSA. A nationally recognized government technology leader, Carnahan received broad support across party lines. Read more here.

Treasury Opens Applications for $2 Billion CERTS Program
The Treasury Department officially opened up its $2 billion Coronavirus Economic Relief for Transportation Services (CERTS) grant program to bus, motorcoach, school bus, and passenger companies hit hard by the COVID-19 pandemic. CERTS grant funds are primarily to cover payroll costs, but may also be used to cover the acquisition of services, equipment, including personal protective equipment and protection measures from COVID-19 for workers and customers; continued operations and maintenance of existing equipment and facilities; and rent, leases, insurance, and interest on regular debt service. Applications for CERTS grant funds are due July 19, 2021. Read more here.

Legal Challenges of PPP Forgiveness Delays Are Paying Off
Equipment World reported that a questionnaire that the Associated General Contractors of America (AGC) said was unfair and causing delays in forgiveness for Paycheck Protection Program (PPP) loans is being withdrawn. According to AGC, the nine-page “Loan Necessity Questionnaire” required to forgive PPP loans over $2 million is being withdrawn by the Small Business Administration. Read more here.

Contraction of Small Business Contractors: What’s Prompting the Drop?
Federal News Network reported that a nearly decade-old acquisition initiative is drastically cutting the number of small businesses receiving government contracts, as awards instead fall into the hands of fewer and larger firms. The drop, which hit women-owned and veteran-owned businesses particularly hard, highlights problems associated with the government’s purchasing practices. Specifically, a report from the U.S. Women’s Chamber of Commerce (USWCC) found that the federal acquisition process of category management, through the use of Best-In-Class contracts, has led to a drop in the number of small business vendors participating in government contracting. Since 2017, small businesses showed a 24% decline. Women-owned suppliers dropped more than 22%, while veteran-owned suppliers dipped more than 17%. Read more here. The USWCC report titled “Category Management ‘Best-In-Class’ Procurement Driving Small Business Suppliers Out of Federal Marketplace” is available here.

New Pentagon Strategy for Overseas Cloud Appears to Back Away from JEDI Vision
Federal News Network reported that the Department of Defense’s (DOD) latest vision of commercial cloud computing capabilities involves many different commercial clouds working in tandem, even at the tactical edge. Those are some of the messages in the DOD Chief Information Officer’s newly published Outside the Continental United States (OCONUS) Cloud Strategy. The first-of-its-kind document updates the DOD’s 2019 cloud strategy—a broader document that took a more global view toward cloud—to acknowledge some of the unique problems overseas users face. Read more here. DOD’s document outlining its OCONUS Cloud Strategy is available here.

DOD to Launch New AI and Data Accelerator Initiative Under JADC2
MeriTalk reported that Deputy Secretary of Defense Kathleen Hicks stated that the Pentagon will be rolling out a new AI and Data Accelerator Initiative (AIDA Initiative) within the next 90 days as part of the Department of Defense’s (DOD) Joint All Domain Command and Control (JADC2) strategy. Secretary of Defense Lloyd Austin signed and approved the JADC2 strategy document last month, but it has not been made public yet. An unclassified version of the data strategy is still being worked on and can be expected soon, but Hicks said the new AIDA Initiative is one new advancement that will be coming out of JADC2. Read more here.

DOD’s Salazar: Changes to Pentagon Cyber Certification Will Help Small Businesses, Clarify Policy
Inside Cybersecurity reported that, according to Pentagon industrial policy leader Jesse Salazar, the internal review of the Department of Defense’s (DOD) Cybersecurity Maturity Model Certification program is aimed at helping small businesses meet DOD’s objectives for cyber readiness, while also making potential policy changes to clarify implementation. Read more here.

GSA’s Transactional Data Reporting Pilot Is Not Used to Affect Pricing Decisions
The General Services Administration’s (GSA) Office of Inspector General (OIG) published a report on its audit of GSA’s Transactional Data Reporting (TDR) pilot within the Multiple Award Schedules Program. The pilot represents a significant change to the long-standing program. The GSA OIG performed the audit to determine the current status of the TDR pilot and if the GSA Federal Acquisition Service’s implementation of the TDR pilot is meeting its purpose of improving taxpayer value. 

Software Development: DOD Faces Risks and Challenges in Implementing Modern Approaches and Addressing Cybersecurity Practices
The Government Accountability Office (GAO) published a report on its assessment of the Department of Defense’s (DOD) IT programs. For fiscal year 2021, DOD requested approximately $37.7 billion for IT investments. These investments included major business IT programs, which are intended to help DOD carry out key business functions, such as financial management and healthcare. GAO’s report summarizes DOD’s reported performance of its portfolio of IT acquisition programs and the reasons for this performance; evaluates DOD’s assessments of program risks; summarizes DOD’s approaches to software development and cybersecurity and identifies associated challenges; and evaluates how selected organizational and policy changes could affect IT acquisitions. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Getting into GSA Schedule Contracting, July 12, 2021, Cy Alba and Anna Wright. Read more here.

WEBINAR: Latest Developments with the HUBZone Program, July 21, 2021, Jon Williams. Read more here.

WEBINAR: Cybersecurity and 889 Compliance in 2021: What Government Contractors Need to Know, July 26, 2021, Cy Alba and David Shafer. Read more here.

WEBINAR: New Government Contractor Hazards, August 9, 2021, Cy Alba and Anna Wright. Read more here.

WEBINAR: GovCon “ LIVE Q&A” Café: Set -Asides, October 8, 2021, Cy Alba. Read more here.