Weekly Update for Government Contractors and Commercial Businesses– July 21, 2022

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LABOR & EMPLOYMENT

Recent Decision May Result in Significant Increase in Personnel Costs and Back Wage Liability for Companies Doing Work in Maryland, Matt Feinberg, 07.18.22
On July 13, 2022, Maryland’s highest court issued a wide-reaching decision in Amaya v. DGS Construction, LLC that could have a substantial impact on personnel costs for companies doing business in Maryland. The unanimous ruling opened the door for employees to seek payment of wages for time spent waiting at a jobsite and/or traveling to and from a client work site under certain circumstances. Although Amaya involved construction employees, the decision is very likely to touch many companies operating in Maryland and will likely have an impact across all industries. Companies based in or who have employees working in Maryland should take immediate notice of the Amaya decision and adjust hourly reporting and wage payment practices as necessary to avoid potential wage-and-hour liability. Read more here.

Nondisplacement of Qualified Workers Under Service Contracts
The Department of Labor (DOL) proposed regulations to implement Executive Order 14055, Nondisplacement of Qualified Workers Under Service Contracts. The executive order establishes a general policy of the federal government that service contracts which succeed contracts for the same or similar services—and solicitations for such contracts—shall include a non-displacement clause. The non-displacement clause requires the contractor and its subcontractors to offer qualified employees employed under the predecessor contract a right of first refusal of employment under the successor contract. Comments on the proposed rule are due August 15, 2022. Read more here. DOL’s related press release is available here.

Workplace COVID Testing Must Be ‘Business Necessity,’ EEOC Says
According to new guidance from the Equal Employment Opportunity Commission (EEOC), employers should now take more factors into consideration when choosing whether to screen employees for COVID-19. Going forward, “employers will need to assess whether current pandemic circumstances and individual workplace circumstances justify viral screening testing” for employees, the EEOC said in an update to its technical assistance guidance. The EEOC previously said COVID-19 testing for on-site employees was legal across the board. Now, employers will have to prove that testing employees is a “business necessity,” which can be based on factors like community transmission, workers’ vaccination status, or certain working conditions. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: Understanding the Impact of OFCCP Policy Changes on Federal Contractors, August 9, Sara Nasseri. Read more here.

WEBINAR: Non-Displacement, September 9, Nichole Atallah. Read more here.

LITIGATION & DISPUTE RESOLUTION

Government Contractor to Pay $9 Million to Resolve FCA Allegations of Cybersecurity Violations, Dave Shafer, 07.12.22
On July 8, 2022, the Department of Justice announced that Aerojet Rocketdyne Inc.—a government contractor providing propulsion and power systems for launch vehicles, missiles and satellites and other space vehicles to the Department of Defense, NASA, and other federal agencies—agreed to pay $9 million to resolve allegations that the company violated the False Claims Act by misrepresenting its compliance with cybersecurity requirements in certain federal government contracts. This is one of the first documented cases (which PilieroMazza attorneys discussed in a 2019 podcast) where a failure to meet cybersecurity requirements alleged by a whistleblower led to an FCA settlement. Government contractors, particularly those working with the Department of Defense, should pay close attention to these settlements and ensure their cybersecurity compliance requirements are in place to avoid hefty financial penalties. Read more here.

Upcoming Litigation & Dispute Resolution Presentations

WEBINAR: FCA Implications for M&A Transactions, July 26, Cy Alba and Matt Feinberg. Read more here.

WEBINAR: Small Government Contractors and the FCA: Is More Enforcement on the Horizon? August 31, Jackie Unger and Matt Feinberg. Read more here.

GOVERNMENT CONTRACTS

Transitioning from DUNS to UEI: Elevating Government Contract Service Tickets and Sharing Your Questions, Cy Alba, 07.18.22
As government contractors are all too aware, the transition from DUNS numbers to the SAM assigned Unique Entity Identifiers (UEI) is causing a myriad of problems, which are jeopardizing contractor payments, awards, and ability to bid on opportunities. Since the April 4, 2022, implementation of the SAM-assigned UEI and entity validation through SAM, PilieroMazza is seeing a wide range of SAM registration and renewal issues resulting in numerous entities’ SAM registrations expiring and new joint ventures unable to register in SAM. PilieroMazza attorneys are working with clients whose Federal Service Desk tickets are submitted and pending for over two months and, in some instances, PilieroMazza clients have contacted their Congressperson to have their expired or deleted SAM registrations returned to active status. In this blog, PilieroMazza discusses major issues in the new SAM system and their impact on contract bidding and administration. Read more here.

PilieroMazza Unveils Podcast Series for Commercial Businesses New to Government Contracting, 07.12.22
The U.S. federal government is the number one purchaser in the world of goods and services, which is worth billions in revenue to businesses each year. For commercial businesses seeking entry into the federal marketplace but not sure where to start, PilieroMazza attorneys from a cross-section of our practice areas—including Government Contracts, Business & Transactions, Labor & Employment, and Litigation & Dispute Resolution—present the podcast series “Commercial Businesses New to Government Contracting.” With six episodes, the series covers a myriad of topics for commercial firms that are new to the federal market, including compliance requirements, labor and employment considerations, small business programs, M&A transactions involving government contracts, and dispute resolution. Read more here.

House Passes $839 Billion Defense Bill
The House passed an $839 billion defense authorization act bill for the 2023 fiscal year, $37 billion beyond what President Biden requested in his budget. The Senate still needs to vote on its version of the National Defense Authorization Act before the two bills can be reconciled. Read more here.

Progress on the Administration’s Acquisition Priorities
The White House released an update to the President’s Management Agenda with an emphasis on acquisition priorities. The update outlines two strategies:

• The first focuses on shoring up national manufacturing, supporting American workers, championing sustainable climate solutions, and creating opportunities for traditionally disadvantaged communities. To achieve this the Biden Administration has set three subgoals: 1) creating a diverse and resilient federal marketplace; 2) ensuring interoperability between agencies; and 3) investing in developing the acquisition workforce.
• The second strategy highlights the development of the Federal Financial Management System to help support the achievement of the first strategy. The goals of this strategy are to strengthen and codify governance to ensure the executive agenda can be implemented and to build a financial assistance environment that supports grant managers.

Success metrics to measure the results of both strategies are currently in development. Read more here.

Contractor Relief Will Extend Past September 30, GSA Official Says
The General Services Administration (GSA) released an acquisition letter in March that offered more flexibility to contractors seeking price increases and placed a moratorium on enforcing price limitations in certain GSA contracts. The expiration date for the relaxed rules is September 30, the end of the government fiscal year. Designed to help the industry deal with skyrocketing inflation and supply chain woes, the temporary waiver will likely be extended past September 30, said Mark Lee, Assistant Commissioner of Policy and Compliance at the GSA’s Federal Acquisition Service. Read more here (subscription required).

Required and Recommended Use of eBusiness Tools when Awarding and Administering Other Transactions
The Department of Defense (DOD) published guidance for DOD components on use of the federal and DOD enterprise tools required for processing and reporting on other transaction (OT) agreements. DOD’s guidance also recommends tools for when existing applications for these processes are not already in use. DOD intends to address these requirements in forthcoming updates to title 32 of the Code of Federal Regulations and the DOD OT Guide. Read more here.

DOE Guidance for Head of Contracting Activity and Contracting Officers on Interagency Acquisitions and Strategic Partnership Projects in G-Invoicing
The Department of Energy (DOE) published guidance for heads of contracting activity and contracting officers on the use of its G-Invoicing system and DOE Interface System for interagency acquisitions pursuant to Federal Acquisition Regulation 17.5 and strategic partnership projects pursuant to Department of Energy Acquisition Regulation 970.1707. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: FCA Implications for M&A Transactions, July 26, Cy Alba and Matt Feinberg. Read more here.

WEBINAR: Joint Venture Basics for Large and Small Contractors, July 27, Meghan Leemon. Read more here.

WEBINAR: Identifying and Quantifying Government Contract Claims, August 17, Peter Ford. Read more here.

WEBINAR: Small Government Contractors and the FCA: Is More Enforcement on the Horizon? August 31, Jackie Unger and Matt Feinberg. Read more here.

EVENT: GovCon Mergers and Acquisitions, August 31, Cy Alba. Read more here.

EVENT: How to File a Request for Equitable Adjustment or Claim on Your Contract, August 31, Jon Williams. Read more here.

WEBINAR: Protecting Your Confidential Information: FOIA Exemption 4 for Government Contractors, September 15, Kevin Barnett. Read more here.