Weekly Update for Government Contractors and Commercial Businesses – May 6, 2021

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GOVERNMENT CONTRACTS

SBA Extends the HUBZone Map Freeze to June 30, 2023, May 5, 2021, Jon Williams and Anna Wright
Today, the Small Business Administration (SBA) issued a direct final rule extending the HUBZone map freeze from December 31, 2021, to June 30, 2023.  The direct final rule (available here) takes effect on June 21, 2021.  This is the latest in a series of developments for the HUBZone Program in 2021. Read more here.

COFC Denies DOJ/Microsoft Motion to Dismiss Amazon JEDI Protest, May 5, 2021, Lauren Brier
On April 28, 2021, the U.S. Court of Federal Claims issued a sealed decision denying the Department of Justice’s (DOJ) and Microsoft’s motions to dismiss Amazon Web Services’ (Amazon) bid protest of the Pentagon’s $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud contract.  Amazon claims repeated prejudicial errors against Amazon Web Services due to influence from then-President Donald Trump and other high-level government officials aiming to harm Amazon.  DOJ and Microsoft failed to convince the Court to dismiss the complaint.  The Court’s denial of the motions to dismiss will allow Amazon to continue making its case before the Court, continuing a lengthy legal process that began in late 2019 which could potentially spell the end for the JEDI contract. Read more here.

Kevin Barnett and Eric Valle Join PilieroMazza’s Expanding Government Contracts Team, May 3, 2021
PilieroMazza is excited to announce the latest additions to the Firm’s growing Government Contracts Team, new Counsel Kevin Barnett and Associate Eric Valle. Chair of the Group, Jon Williams, remarked: “We welcome Kevin and Eric into our ranks and look forward to them being invaluable resources for our clients in the federal procurement space.” Read more here.

GAO Holds Solicitation Requirement Violates SBA’s Regulations Regarding Small Business Mentor-Protégé Joint Ventures, April 29, 2021, Meghan Leemon
In a recent decision, the Government Accountability Office (GAO) sustained a protest challenging the terms of a solicitation, as the solicitation impermissibly required that a protégé and mentor in a joint venture have the same level of experience as other offerors. This is an important decision for companies that are parties to a joint venture, and a reminder to carefully review a solicitation’s requirements before submitting a proposal. Read more here.

President Biden’s Afghan Exit Affects Contractors
Bloomberg Government reported that U.S. contractors face a tight deadline to move out of Afghanistan by President Biden’s planned troop withdrawal deadline of September 11^th. The Department of Defense has 16,832 workers employed by contractors in Afghanistan, 6,147 of whom are U.S. citizens, which is more than double the number of remaining U.S. troops. Read more here.

SBA Announces Applications Open for $28.6 Billion Restaurant Revitalization Fund
Small Business Administration (SBA) Administrator Isabella Casillas Guzman announced SBA opened applications on May 3, 2021, for the Restaurant Revitalization Fund. The online application will remain open to any eligible establishment until all funds are exhausted. Read more here.

President Biden Appoints Official to Oversee Buy American Initiative
The Hill reported that President Biden announced that Celeste Drake will serve as the director of Made in America and will lead President Biden’s administration’s “Buy American” effort, a first-of-its-kind role within the Office of Management and Budget. Ms. Drake will oversee federal procurement policies in accordance with President Biden’s pledge to increase the government’s purchase of U.S.-made goods. Read more here.

Bipartisan Lawmakers Launch Caucus to Simplify and Strengthen Federal Construction Procurement
Government Executive reported that Representative Scott Peters (D-CA) and Representative Peter Stauber (R-MN) launched a construction procurement caucus to advance “sensible reforms” for federal contractors. The goals of the caucus are to simplify the process for federal construction procurement, foster a competitive market for businesses of all sizes, support better opportunities for businesses in the federal marketplace, and advance procurement-related legislation. Read more here.

FedRAMP Connect Business Case Deadline Extended
FedRAMP announced that the due date for FedRAMP Connect Business Cases has been extended to May 21, 2021. The FedRAMP invests in creating a broad marketplace of Cloud Service Offerings (CSO) to help meet government-wide mission needs. However, FedRAMP has limited resources to conduct Joint Authorization Board (JAB) authorizations and relies on agencies to provide a scalable way to balance additional demand. Based on current program resourcing and funding levels, FedRAMP may prioritize up to 12 CSOs per year. FedRAMP Connect is the process FedRAMP uses to evaluate CSOs and prioritize to work towards a JAB Provisional Authorization to Operate. Read more here.

Consortium OTAs Suffer from Lack of Guidance, Data, IG Finds
The Department of Defense Office of Inspector General released an audit report examining other transaction agreements (OTAs) awarded via consortiums. The audit revealed that these OTAs were not always awarded in accordance with regulations and involved inconsistent documentation and too little guidance. Read more here.

GSA Releases TDR Pilot Results
The General Services Administration (GSA) published a blog announcing the results of its Transactional Data Reporting (TDR) Pilot for fiscal year 2020. The TDR pilot replaced the price reductions clause (PRC) and commercial sales practice (CSP) format in some GSA Schedule contracts. GSA found that contract-level pricing was lower under TDR contracts and that small businesses under TDR experienced better growth. GSA determined that the pilot has demonstrated the value of TDR and will consider using TDR instead of the PRC and CSP in contract negotiations. Read more here.
 

Upcoming Government Contracts Presentations

 
WEBINAR: SBIR Contracting – Information for Primes and Subs, May 10, 2021, Cy Alba and Anna Wright. Read more here.
 
WEBINAR: Joint Ventures and Facility Security Clearances, May 18, 2021, Cy Alba. Read more here.
 
WEBINAR: Using OTAs as an Acquisition Mechanism in Defense Contracts: Benefits and Pitfalls, May 18, 2021, Jackie Unger. Read more here.

WEBINAR: Missteps in the Bid Protest Process: War Stories from the Trenches, June 9, 2021, Katie Burrows and Timothy Valley. Read more here.

LABOR & EMPLOYMENT

Biden Signs EO to Increase Federal Contractor Minimum Wage Rate to $15.00 an Hour, April 28, 2021, Nichole Atallah
President Biden signed an executive order (Biden Order) that will increase the applicable minimum wage rate to be paid to workers performing work on or in connection with federal contracts from $10.95 to $15.00 per hour beginning January 1, 2022. As early as his second day in office, President Biden committed to modifying an Obama-era executive order to get one step closer to a national minimum wage increase of the same magnitude. Below are key details on the applicability of the Biden Order minimum wage increase for government contractors. Read more here.

President Biden Establishes White House Task Force on Worker Organizing and Empowerment
President Biden signed an executive order establishing the White House Task Force on Worker Organizing and Empowerment. The Task Force will be dedicated to mobilizing the federal government’s policies, programs, and practices to empower workers to organize and successfully bargain with their employers. Chaired by Vice-President Kamala Harris and Vice-Chaired by Secretary Marty Walsh, the Task Force will include more than twenty cabinet members and heads of other federal agencies who will take a whole-of-government approach to empower workers. Read more here.

DOL Extends Effective Date of Portions of Final FLSA Tip Rule
The Department of Labor (DOL) published a final rule/delay of effective date that finalizes DOL’s proposal to further extend the effective date of three discrete portions of the rule titled Tip Regulations Under the Fair Labor Standards Act (FLSA) (2020 Tip final rule), published December 30, 2020. This further delay of three portions of the rule allows DOL to complete a separate rulemaking that proposes to withdraw and re-propose two of these portions of the 2020 Tip final rule, published March 25, 2021, which includes, inter alia, a 60-day comment period and at least a 30-day delay between publication and the rule’s effective date. It will also provide DOL additional time to conduct another rulemaking to potentially revise that portion of the 2020 Tip final rule addressing the application of the FLSA’s tip credit provision to tipped employees who perform both tipped and non-tipped duties. All of the remaining portions of the 2020 Tip final rule will go into effect on April 30, 2021. As of April 29, 2021, the amendments to 29 CFR 10.28(b)(2), 531.56(e), 578.1, 578.3, 578.4, 579.1, 579.2, 580.2, 580.3, 580.12, and 580.18, published December 30, 2020, at 85 FR 86756, delayed until April 30, 2021, on February 26, 2021, at 86 FR 11632, are further delayed until December 31, 2021. Read more here.

OSHA Emergency COVID Rule Imminent, but Vulnerable: Analysis
Bloomberg Law reported that the Department of Labor (DOL) is in the final stages of issuing an emergency rule designed to protect workers from COVID-19, but Bloomberg Law opined that the rule faces long odds of ever going into effect. The rule is being put forward as an “emergency temporary standard” by DOL’s Occupational Safety and Health Administration (OSHA). Read more here.
 

Upcoming Labor & Employment Presentations

 
WEBINAR: FUN with the FAR: FAR Parts 22 & 23, Application of Labor Laws to Government Acquisitions, May 19, 2021, Nichole Atallah. Read more here.
 
WEBINAR: DFARS Part 222: Application of Labor Laws to Government Acquisitions, May 19, 2021, Sarah Nash. Read more here.

LITIGATION & DISPUTE RESOLUTION

A Decision Right Up an Employee’s Alley: Recent Virginia Federal Court Opinion Weakens Protections for Companies Utilizing Consultants and Independent Contractors, May 4, 2021, Matthew Feinberg
Government contractors and commercial businesses alike frequently retain consultants and independent contractors to perform certain types of work, particularly in the construction, healthcare, and information technology industries. This is so because utilizing independent contractors, as opposed to employees, can offer some attractive benefits to companies. For instance, utilizing independent contractors may reduce company overhead, general and administrative, and fringe benefit expenses; it may allow for flexible work schedules, particularly on projects with indefinite schedules or workloads; and it may permit companies to avoid incurring worker overtime costs during periods of heavy business activity. Meanwhile, companies have attempted—often with success—to limit some of the risks of utilizing independent contractors by including non-competition provisions in consultant and independent contractor agreements. These provisions often prevented independent contractors from simultaneously working for a company and its competitor, exposing the company’s proprietary or confidential information to disclosure to the competitor. However, a March 29, 2021 decision from the United States District Court for the Eastern District of Virginia, Alley v. Quality Eco Technologies, LLC, throws a wrench into that practice. The Alley case calls into question whether a company can enter into a non-compete agreement with an independent contractor, weakening protections for government contractors and commercial businesses and opening them up to potential employer liability. Read more here.

Qui Tam: The False Claims Act and Related Federal Statutes
The Congressional Research Service released a report on the history of federal qui tam provisions; the two existing federal qui tam statutes—the False Claims Act and an Indian protection provision; and the constitutional questions raised by federal qui tam provisions. Qui tam statutes enlist the public to sue to recover civil penalties and forfeitures from those who have defrauded the government. Qui tam rewards those who sue in the government’s name (called relators) with a portion of the recovered proceeds. Read more here.