Weekly Update for Government Contractors and Commercial Businesses – January 31, 2022

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LITIGATION & DISPUTE RESOLUTION

Non-Compete Agreements: What Employers and Healthcare Providers Should Know, January 25, 2022, Sara Nasseri and Matthew Kreiser
Non-compete clauses are a common component in employment agreements for many businesses, including healthcare providers. Employers and healthcare providers, ranging from Fortune 500 companies and large public hospitals to small businesses and private practices, utilize non-compete clauses in their employment agreements to protect their businesses and medical practices by restricting their employees’ ability to work for a competing entity. This blog offers important considerations for employers and healthcare providers implementing non-compete agreements and clauses to protect their interests, ensure enforceability, and avoid costly litigation. Read more here.

DOJ Updates ‘Common Questions About COVID and the ADA’ to Address the ADA’s Application to COVID-Era Medical Visitation Policies and ‘Streateries’
The Justice Department updated its “Common Questions About COVID and the ADA” to address two COVID-era issues affecting people with disabilities: first, ensuring that medical facilities’ visitor policies take into account the rights of people with disabilities to receive equal access to care, and second, ensuring that outdoor retail or dining spaces (sometimes called “streateries”) are accessible to people with disabilities and do not prevent individuals from using sidewalks and accessible parking. 

Loan Servicer Agrees to Pay Nearly $8 Million to Resolve Alleged False Claims in Connection with Federal Education Loans
The Department of Justice reported that Conduent Education Services LLC, a contractor that serviced student loans for lenders under the Federal Family Education Loan Program, has agreed to pay $7.9 million to resolve allegations that it violated the False Claims Act by submitting or causing the submission of false claims to the Department of Education. Read more here.

Diabetic Shoe Company Agrees to Pay $5.5 Million to Resolve False Claims Act Allegations Regarding ‘Custom’ Shoe Inserts
The Department of Justice reported that, as part of a civil settlement that resolves claims brought under the False Claims Act, Foot Care Store, Inc., a diabetic shoe company, and its President and CEO Robert Gaynor, have agreed to pay $5,538,338 to settle allegations that the company sold custom diabetic shoe inserts that were not actually custom fabricated in accordance with Medicare standards. Read more here.

Upcoming Litigation & Dispute Resolution Presentations

WEBINAR: 2021 FCA Year-in-Review and Emerging Trends for 2022, February 16, Matt Feinberg and Jackie Unger. Read more here.

GOVERNMENT CONTRACTS

PPP Loan Forgiveness Appeal Process: 4 Steps to Knowing and Protecting Your Rights, January 13, 2022, Cy Alba
As discussed in PilieroMazza’s previous alert, the Small Business Administration (SBA) released its Paycheck Protection Program (PPP) Loan Forgiveness application way back in May of 2020. Since then, PPP forgiveness has continued to cause confusion among businesses, especially federal contractors. Since the release of the original forgiveness application, most PPP borrowers eligible for loan forgiveness have submitted for forgiveness, and most of those have actually already received forgiveness as well. Unfortunately, we have started to see an uptick in loan forgiveness application denials. This is a relatively new development, which is quickly evolving as we see more varied denials. In most cases, there are grounds to appeal SBA’s decision. This blog covers four important steps borrowers should be aware of to protect their rights when appealing a PPP denial. Read more here.

Momentum Builds for New COVID-19 Relief for Businesses
The Hill reported that momentum is building on Capitol Hill for more coronavirus relief funding to support restaurants and other businesses struggling to stay afloat in the face of the latest omicron-based wave of the pandemic. Read more here.

One Year Later: Biden-Harris Administration, SBA Have Prioritized an Equitable Recovery, Centered on Strengthening Main Street and Supply Chains
The Small Business Administration published a press release on its activities under the first year of the Biden-Harris Administration, providing a look back at its accomplishments in 2021 and its goals heading into 2022. Read more here.

New Interagency Council Will Further ‘Made in America’ Efforts
Government Executive reported that, as part of its efforts to implement President Biden’s Executive Order, “Ensuring the Future Is Made in All of America by All of America’s Workers,” the White House has announced a new council to coordinate its “Made in America” efforts governmentwide. The objective of the Made in America Council is to advance Made in America goals by creating a regular forum and community for agencies to collaborate as they work to strengthen the use of federal procurement and federal financial assistance. The Council’s ultimate goal is to increase reliance on domestic supply chains and reduce the need for waivers over time. Read more here.

DOD Hopes for Legislative Action on Product, Services Pricing Policy
The Department of Defense published a press release regarding a recent House Committee on Oversight and Reform hearing on contract pricing for military materiel and services at a reasonable cost. John Tenaglia, Principal Director of Defense Pricing and Contracting in the Office of the Undersecretary of Defense for Acquisition and Sustainment, spoke at the hearing, stating that two issues exist regarding pricing:

• the change needed for contracting officers to obtain data to analyze and negotiate fair and reasonable prices and
• the business model—specifically, whether the law should provide a check against the government paying higher prices for contractors to cover their expenses to acquire companies in the supply chain, particularly where that business model precludes effective competition.

Read more here.

Fiscal Year 2021 Procurement Management Review Newsletter
The Department of Defense published a newsletter on the Defense Contract Management Agency’s (DCMA) independent reviews of the procurement functions of each Other Defense Agency and Defense Field Activity that performs contracting operations. These reviews assess the effectiveness of the contracting function, analyze any problem areas, and identify noteworthy practices that may be beneficial to all organizations. The newsletter shares DCMA’s observations, best practices, and lessons learned. Read more here.

President Biden Signs National Security Memorandum to Improve the Cybersecurity of National Security, Department of Defense, and Intelligence Community Systems
The White House published a fact sheet with details on President Biden’s recent National Security Memorandum (NSM) to improve the cybersecurity of National Security, Department of Defense, and Intelligence Community Systems. The NSM requires that, at minimum, these systems employ the same network cybersecurity measures as those required of federal civilian networks in Executive Order 14028, “Improving the Nation’s Cybersecurity.” Read more here. The NSM is available here.

CISA: Implement Cybersecurity Measures Now to Protect Against Potential Critical Threats
The Cybersecurity and Infrastructure Security Agency published an insights document that is intended to ensure that senior leaders at every organization in the U.S. are aware of critical cyber risks and take urgent, near-term steps to reduce the likelihood and impact of a potentially damaging compromise. According to the document, all organizations, regardless of sector or size, should immediately implement the steps it outlines. Read more here.

CISA Releases Finalized IPv6 Guidance for Agencies
Federal Computer Week reported that the Cybersecurity and Infrastructure Security Agency published guidance meant to provide federal agencies with security considerations regarding Trusted Internet Connections 3.0 implementations as they transition to IPv6. The guidance follows a years-long effort to securely transition agencies to IPv6—the current standard for identifying devices and systems communicating over the web—from the previous standard, IPv4. Read more here.

SBA Announces New Pilot Program to Bolster Cybersecurity Infrastructure of Emerging Small Businesses
The Small Business Administration announced $3 million in new funding for state governments to help emerging small businesses across the U.S. develop their cybersecurity infrastructure. As part of this Cybersecurity for Small Business Pilot Program, state governments are eligible to compete for grants that will help deliver cybersecurity assistance to nascent and start-up business owners. Read more here.

GSA Launches Revamped Vendor Support Center
FedScoop reported that the General Services Administration (GSA) launched an updated Vendor Support Center to make it easier for current and potential government contractors to find the information they need. According to FedScoop, GSA modernized the core technology with security enhancements similar to GSA Advantage!, improved the user experience, and made business process improvements, so the website is easier to maintain. Read more here.

GSA Advantage! to Remove Unauthorized Suppliers’ Products
The General Services Administration (GSA) announced that a new pilot will soon begin on GSA Advantage! The pilot is intended to improve the supply chain and reduce the number of unauthorized products on GSA Advantage! by verifying that all displayed products are only offered by contractors authorized to sell the products. Read more here.

Correction: Consolidation of Mentor-Protégé Programs and Other Government Contracting Amendments
The Small Business Administration (SBA) corrected a final rule that was published in the Federal Register on October 16, 2020, to merge the 8(a) Business Development Mentor-Protégé Program and the All Small Mentor-Protégé Program. The correction clarifies that a concern must include in its receipts and employee count its proportionate share of joint venture receipts and joint venture employees, respectively, regardless of whether the joint venture is populated or unpopulated. Read more here.

Agency Strengthens Support for American Indians and Alaska Natives in Federal Contracting
Government Executive reported that the Indian Health Service, the federal agency that provides health services to American Indians and Alaska Natives, took a major step to support contracting with Native-owned and operated businesses. Specifically, the Indian Health Service published a final rule to further implement the Buy Indian Act, which was first enacted in 1910 to give preference to Native-owned and controlled businesses in certain federal contracts. Read more here. A related fact sheet on the final rule is available here.

8(a) STARS III Acquisition Update
The General Services Administration announced that it plans to award the next cohort of contracts on the 8(a) STARS III government-wide acquisition contract (GWAC) in February 2022. This second cohort follows the initial contract awards made in June 2021 and will provide opportunities for growth to additional small businesses in 2022. The Best-in-Class 8(a) STARS III GWAC is a small business set-aside contract that provides flexible access to customized IT solutions from a large, diverse pool of 8(a) industry partners. Read more here.

Transition from DUNS to UEI by April 4, 2022
The Department of Defense released a memorandum on the federal government’s transition from use of the Data Universal Numbering System (DUNS) number to the Unique Entity Identifier (UEI). According to the memorandum, contractors will be solely identified by their UEI beginning April 4, 2022. The memorandum encourages contract writing system owners to start using their UEI as soon as possible so any problems can be reported to the General Services Administration before the retirement of the DUNS number. Read more here.

Class Deviation: Revised DEAR Solicitation Provisions and Contract Clauses for Technology Transfer
The Department of Energy (DOE) published a class deviation to three DOE Acquisition Regulation (DEAR) contract clauses, including solicitation provisions for use in contracts, such as management and operating (M&O) contracts, that have technology transfer as part of the mission of the contract. Specifically, it revises: DEAR 970.5227-3, Technology Transfer Mission; DEAR 970.5227-10, Patent Rights—Management and Operating Contracts, Nonprofit Organization or Small Business Firm Contractor; and DEAR 970.5227-12, Patent Rights—Management and Operating Contracts, For-Profit Contractor, Patent Waiver. The class deviation requires contracting officers to incorporate the revised and / or added provisions into solicitations and the revised and / or added clauses in contracts for M&O contracts that have technology transfer as part of their mission. Additionally, it requires contracting officers to negotiate the deviated clauses in applicable existing M&O contracts at the next annual negotiation, to the extent possible. Read more here.

Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business Certification: Establishment of Effective Date
The Small Business Administration (SBA) published a final rule / establishment of effective date regarding its May 11, 2020, final rule titled, “Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business Certification.” The May 11, 2020, final rule revised part 127 of SBA’s regulations, “Women-Owned Small Business Federal Contract Program,” to implement a statutory requirement to certify Women-Owned Small Business Concerns and Economically-Disadvantaged Women-Owned Small Business Concerns. SBA’s new final rule establishes the effective date for § 127.355, “How will SBA ensure that approved third-party certifiers are meeting the requirements?” which was added to part 127 under the May 11, 2020, final rule. While the effective date of § 127.355 was originally delayed indefinitely, it is now effective as of May 3, 2021. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Joint Ventures and Teaming Agreements, February 2, Cy Alba. Read more here.

WEBINAR: Understanding and Avoiding Affiliation for Small Business Government Contractors, February 2, Jon Williams. Read more here.

WEBINAR: Understanding and Avoiding Affiliation for Small Business Government Contractors, February 8, Eric Valle and Meghan Leemon. Read more here.

WEBINAR: Office of Hearing and Appeals (OHA) Year-In-Review: Impactful Decisions from 2021, February 17, Peter Ford and Meghan Leemon. Read more here.

WEBINAR: 2021 Bid Protest Decisions with Far-Reaching Impacts for Government Contractors, February 23, Katie Burrows and Eric Valle. Read more here.

BUSINESS & TRANSACTIONS

FTC, DOJ Launch Joint Inquiry Aimed at Blocking Illegal Mergers
The Hill reported that the Federal Trade Commission (FTC) and Department of Justice’s (DOJ) antitrust division launched a new inquiry aimed at updating guidelines to block illegal mergers. The inquiry comes amid a surge in new mergers, filings for which doubled between 2020 and 2021. Read more here. Related information from DOJ is available here and here.

Upcoming Business & Transactions Presentations

EVENT: Mergers, Acquisitions & Financial Growth Planning, February 2, Meghan Leemon. Read more here.

LABOR & EMPLOYMENT

Task Force Tells Agencies How to Handle Court Injunction on Vaccine Mandate
Federal News Network reported that the Safer Federal Workforce Task Force issued new guidance to explain how agencies should approach the Biden Administration’s vaccine requirement for federal employees now that a Texas judge has temporarily barred its implementation and enforcement. The guidance, among other items, explains that workers who have been suspended for failing to comply with the mandate need to have their suspensions lifted. It also details that new proposals to fire or suspend employees need to be “held in abeyance” for as long as the injunction is in place. The guidance, however, says that agencies do not need to reverse other disciplinary procedures that have already taken full effect. Read more here.

Application of Executive Order 14026, ‘Increasing the Minimum Wage for Federal Contractors’
The Department of Labor published a memorandum that provides guidance on the application of Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” which required certain federal contractors to pay workers at least $15 per hour and increased the minimum wage for tipped federal contractor workers to $10.50 per hour. The new regulations go into effect on January 30, 2022. Read more here.

DOL Files Suit After Investigation Finds Federal Contractor Failed to Ensure Subcontractors Paid $3.3M in Wages, Fringe Benefits
The Department of Labor published a press release to announce that it filed suit against a federal contractor after Wage and Hour Division investigators found that the contractor failed to audit its 145 subcontractors for compliance with the McNamara-O’Hara Service Contract Act and the Contract Work Hours and Safety Standards Act. The investigation determined that the subcontractors did not pay 3,964 employees as required, resulting in $3,348,543 in prevailing wage, overtime, and fringe benefit back wages due. Read more here.

Honolulu Company to Pay $1.4M to 171 Security Officers After DOL Finds Employer Illegally Schemed to Deny Payment of Overtime Wages
The Department of Labor published a press release to announce that a Hawaii company will pay $1,539,773 in back wages and liquidated damages to 171 guards—and civil penalties—after a Wage and Hour Division investigation determined the company denied workers overtime pay illegally. Investigators found that the company established a “voluntary program” that offered guards more work hours if they waived their right to overtime and accepted straight-time pay for all hours worked. The Wage and Hour Division determined the company intentionally violated the Fair Labor Standards Act’s overtime laws, which require that non-exempt employees be paid overtime pay when they work more than 40 hours in a workweek. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: Issues In Focus: What is the Minimum Wage Again? Navigating the $15 Minimum Wage for Government Contractors, February 8, Nichole Atallah. Read more here.

WEBINAR: Service Contract Act Compliance Challenges in a COVID 19 Environment, February 10, Nichole Atallah and Sarah Nash. Read more here.

WEBINAR: Government Contractors: Preparing for OFCCP’s Affirmative Action Program Compliance Certification, February 24, Sara Nasseri. Read more here.