Weekly Update for Government Contractors and Commercial Businesses – October 9, 2020

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LABOR & EMPLOYMENT

BLOG: Emergency Sick Leave Policy: Top 5 Measures to Defend Against a DOL Investigation, October 7, 2020, Nichole Atallah, Sarah Nash, and Sara Nasseri
Companies across the country are still struggling to understand and implement the emergency sick and family leave imposed by the Families First Coronavirus Response Act. The U.S. Department of Labor’s (DOL) Wage and Hour Division, responsible for enforcing the provisions, initially provided a grace period to employers to come into compliance, but that time has passed and DOL is now investigating complaints of noncompliance. By way of example, Nicholas Security Commercial LLC, a Georgia-based home security company, was found liable to pay back wages after denying emergency paid sick leave to an employee who self-quarantined after receiving a coronavirus diagnosis. This blog delves into the top 5 measures all employers should take now to shield your company from a DOL investigation and possible monetary penalties. [Read More]

Upcoming Labor & Employment Presentations

WEBINAR: Revisiting Executive Compensation and Employee Incentive Plans, October 20, 2020, Nichole Atallah and Kathryn Hickey. [Read More]

BUSINESS & TRANSACTIONS

CLIENT ALERT: SBA Issues Guidance for PPP Lenders on Required Consents for Change in Ownership of PPP Borrowers, October 5, 2020, Kathryn Hickey
On October 2, 2020, SBA issued guidance for lenders administering loans under the Paycheck Protection Program (PPP) regarding what involvement by SBA (if any) is required when a PPP borrower undergoes a transaction resulting in a change in ownership. This guidance addresses several questions with which PPP borrowers and lenders have been struggling over the past several weeks and provides clarity around what the expectations are for when SBA consent is required and what the consent process entails. This guidance is especially applicable for PPP borrowers (and their lenders) who are contemplating equity-based financings, mergers, equity sale transactions, reorganizations, or asset sale transactions while a PPP loan remains outstanding. [Read More]

 Upcoming Business & Transactions Presentations

WEBINAR: Revisiting Executive Compensation and Employee Incentive Plans, October 20, 2020, Nichole Atallah and Kathryn Hickey. [Read More]

WEBINAR: Mergers and Acquisitions in Healthcare: Getting Your House In Order, November 11, 2020, Kathryn Hickey. [Read More]

LITIGATION & DISPUTE RESOLUTION

BLOG: Is Your Arbitration Clause Leaving You Exposed? 3 Ways to Protect Yourself, October 6, 2020, Megan Benevento
Arbitration clauses are included in many commercial contracts, particularly in government subcontracts. We often see arbitration clauses as tools to limit the parties’ exposure to protracted litigation if a dispute arises under the contract. [Read More]

CYBERSECURITY & DATA PRIVACY

DOD Publishes Interim CMMC Rule
The Department of Defense (DOD) published an interim rule amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement the Cybersecurity Maturity Model Certification (CMMC) framework. The rule is effective November 30, 2020. Read more here.

GOVERNMENT CONTRACTS

Trump Ends Stimulus Talks
Forbes reported that Trump effectively ended stimulus talks and tweeted: “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.” Forbes gave 3 possibilities for what happens next. Read more here.

Stop-Gap Funding Averts Government Shutdown
The Federal News Network reported that President Trump signed a temporary, stop-gap funding measure into law that avoids a government shutdown and keeps agencies running through December 11, 2020. Read more here.

GSA’s Next-Generation Small Business GWAC
The General Services Administration (GSA) announced Polaris, its new small business Governmentwide Acquisition Contract (GWAC), which is expected to have a draft request for proposals in the next few months. Read more here.

SBA Publishes Two Rules to Increase Small Business Size Standards
SBA published two proposed rules that would increase SBA’s receipts-based small business size definitions (commonly referred to as “size standards”) for specific North American Industry Classification System (NAICS) Sectors.

• RIN 3245-AG89: This rule would increase SBA’s receipts-based small business size standards for NAICS Sectors related to Agriculture, Forestry, Fishing and Hunting; Mining, Quarrying, and Oil and Gas Extraction; Utilities; and Construction. Read more here.
• RIN 3245-AG90: This rule would increase SBA’s receipts-based small business size standards for NAICS Sectors related to Transportation and Warehousing, Information, Finance and Insurance, and Real Estate and Rental and Leasing. Read more here.

Comments for both rules are due December 1, 2020. Additional information on the proposed rules is available in an SBA press release here.

OMB Issues Memo on Executive Order Related to Diversity Training
The Office of Management and Budget (OMB) released a memo regarding the Executive Order issued by the President on Combating Race and Sex Stereotyping. The OMB memo explains that this Executive Order encourages diversity and inclusion efforts consistent with principles of fair and equal treatment, while defining divisive trainings the Administration seeks to end—namely trainings that “stereotyp[e]” or “scapegoat[]” specific groups of people. The OMB memo encourages federal agencies to take “immediate and substantive action” to implement this Executive Order and notes that federal contractors will be required to represent that they will not conduct the aforementioned divisive trainings for their own employees, with potential sanctions for noncompliance. Read more here.

DOL Launches Hotline to Investigate Complaints under Executive Orders
DOL established a hotline and email address to receive and investigate complaints made by employees that federal contractors engage in race or sex stereotyping or scapegoating in employment training programs that would violate Executive Order 11246 and Executive Order 13950, “Executive Order Combating Race and Sex Stereotyping.”  Read more here.

Congress Mulls Tighter Buy-American Rules
Defense One reported that the U.S. House of Representatives approved provisions in its version of the 2021 National Defense Authorization Act (NDAA) that would require 100 percent American-made parts in acquisition programs by 2026. The U.S. Senate has introduced similar legislation. Read more here.

Inflation Adjustment of Acquisition-Related Thresholds
DOD, GSA, and the National Aeronautics and Space Administration (NASA) published a final rule that amends the Federal Acquisition Regulation (FAR) to further implement 41 U.S.C. § 1908, which requires an adjustment every five years of statutory acquisition-related thresholds for inflation. The rule became effective on October 1, 2020. Read more here.

A summary presentation of a final rule is available here. A small entity compliance guide is available here.

SBA Updates Surety Bond Guarantee Fees
SBA published a notification announcing that SBA is adopting the guarantee fees charged to all surety companies and principals on each guaranteed bond (other than a bid bond) issued in SBA’s Surety Bond Guarantee Program in the amounts that SBA has been charging during the temporary fee reduction initiative that began October 1, 2018, and continued through September 30, 2020. The fees described in the notice are adopted as of October 1, 2020, and apply to all SBA surety bond guarantees approved on or after October 1, 2020. Read more here.

COVID-19 Loans Lack Controls and Are Susceptible to Fraud
The Government Accountability Office (GAO) released a report on fraud risks associated with the PPP and Economic Injury Disaster Loan program. It is largely based on GAO reports released in June and September that addressed the federal response to the economic downturn caused by COVID-19. Read more here.

DOD Implements 2017 NDAA Regarding Treatment of Certain Items as Commercial Items
DOD published a final rule amending the DFARS to implement several sections of the 2017 NDAA that address treatment of commingled items purchased by contractors and services provided by nontraditional defense contractors as commercial items. The rule became effective on October 1, 2020. Read more here.

VA Amending VAAR to Streamline and Align with the FAR
The VA released a final rule that amends and updates the Veteran Affairs Acquisition Regulation (VAAR) to streamline and align with the FAR. The rule is effective October 26, 2020. Read more here.

DOD Modifies DFARS Rule on Single Award IDIQs
DOD released a final rule that modifies the DFARS to adjust a requirement for awarding single award Indefinite Delivery/Indefinite Quantity (IDIQ) contracts. The final rule implements Section 816 of the 2020 NDAA and removes a requirement for a written determination if the head of agency made a written a determination for other than competitive procedures. Read more here.

DOD Transitioning COVID-19 Acquisition Task Force to Permanent Office
The Federal News Network reported that the Joint Acquisition Task Force the DOD set up to deal with the COVID-19 pandemic is not going away, even when the pandemic finally does. Defense officials have decided to turn it into a permanent assisted acquisition organization to help other federal agencies deal with complex procurement problems. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: PCI Subcontracting Summit 2020: Purchasing Systems, October 27, 2020, Cy Alba. [Read More]