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Prepare to (Semi)Conduct Your Due Diligence! Proposed Rule to Prohibit Certain Semiconductor Products and Services, PilieroMazza Client Alert, Isaias “Cy” Alba, IV, Joseph P. Loman, Daniel Figuenick, III
Whether you’re aware or not, semiconductors are part of a vast variety of electronics. Semiconductors appear in items ranging from smartphones to pacemakers. The Federal Acquisition Regulatory Council (FAR Council) issued an Advanced Notice of Proposed Rulemaking (Proposed Rule), which would amend the Federal Acquisition Regulation (FAR) to prohibit executive agencies from procuring products and services that contain certain “covered” semiconductors. The Proposed Rule is expected to impact up to 75% of all government contract awardees. For contractors affected by the Proposed Rule, the costs of compliance and penalties for non-compliance will be high. Below, PilieroMazza highlights key aspects of the Proposed Rule and potential issues contractors would be wise to consider before the comment period ends on August 2. Read more here.
Federal Acquisition Regulation (FAR) Final Rules
On July 30, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration published three final rules amending the FAR. The Federal Acquisition Circular (FAC) Introduction is available here. The FAC Small Entity Compliance Guide is available here. The Technical Amendments are available here. The final rules will be effective August 29, 2024.
(1) Limitation of Authority Regarding Extraordinary Contractual Actions. This final rule will increase the approval threshold for Congressional committee notification for extraordinary contractual actions from $35 million to $150 million. The unpublished rule is available here.
(2) Protests of Orders Set Aside for Small Business. This final rule will update and clarify the requirements for size and socioeconomic status protests for multiple award contracts except for blanket purchase agreements placed under the Federal Supply Schedule. This rule is intended to clarify the protest process for small business contractors and contracting officers. This rule also aligns with existing SBA requirements for protests. The unpublished rule is available here.
(3) Reverse Auction Guidance. This final rule will address the Government Accountability Office’s reports and implement the Office of Federal Procurement Policy’s memorandum to maximize competition and savings for reverse auctions. The unpublished rule is available here.
Department of Defense (DOD) Proposed Rule: Defense Federal Acquisition Regulation Supplement (DFARS), Task Order and Delivery Order Contracting for Architectural and Engineering (AE) Services
On July 29, DOD published a proposed rule and request for comments from the public about amending the DFARS to provide directions for DOD contracting officers to use qualification-based selections when awarding task orders and delivery orders for AE services. This rule will also prevent contracting officers from routinely requesting additional information regarding qualifications when awarding task orders or delivery orders under a multiple-award contract. The rule is available here. Comments close September 27, 2024. The Technical Amendments are available here.
Small Business Administration (SBA) Direct Final Rule: Disaster Assistance Loan Program Changes to Unsecured Loan Amounts and Credit Elsewhere Criteria
On July 24, SBA published a direct final rule amending regulations for its Disaster Loan Program. The rule revises how SBA determines whether a program applicant has credit elsewhere and increases the unsecured threshold for physical damage loans. The rule is available here and will be effective September 9, 2024.
Department of Agriculture (USDA) Proposed Rule: Agriculture Acquisition Regulation (AGAR)
On July 29, USDA published a proposed rule and request for comments from the public regarding amending the AGAR to align with changes in the law. This is the first major change to the AGAR since 1996. The rule is available here. Comments close August 26, 2024.
Department of Homeland Security (DHS) Proposed Rule: Homeland Security Acquisition Regulation (HSAR), Restrictions on Foreign Acquisition Update
On July 24, DHS published a proposed rule and request for comments from the public regarding amending the HSAR relating to the acquisition of clothing, canvas, or textile products and natural or synthetic fabrics. The changes to the HSAR are intended to reduce confusion and improve clarity. The rule is available here. Comments close September 23, 2024.
Senate Dems Roll Out Bill To Codify Chevron Deference, Law360
Sen. Elizabeth Warren, D-Mass., led a group of Democratic senators Tuesday in introducing a bill to codify the now-defunct doctrine of Chevron deference after it was struck down by the U.S. Supreme Court last month. Read more here (subscription required).
Upcoming Government Contract Presentations
TRAINING: Sustainable Procurement: A Closer Look at the New Federal Acquisition Regulation (FAR), August 8, 2024, Katherine B. Burrows, Eric Valle
TRAINING: Understanding and Avoiding Affiliation for Small Business Government Contractors, August 26, 2024, Meghan F. Leemon, Emily A. Reid
TRAINING: Navigating the FAR/DFARS: The Most Confusing and Little-Known Clauses, September 10, 2024, Eric Valle, Daniel Figuenick, III
CORPORATE & ORGANIZATIONAL GOVERNANCE
Financial Crimes Enforcement Network (FinCEN) Update: Beneficial Ownership Information (BOI) Frequently Asked Questions (FAQs)
On July 24, FinCEN updated its BOI FAQs to add clarification that a disregarded entity, for tax purposes, must still report BOI to FinCEN if it is a reporting company. FinCEN also clarifies that reporting companies should make every effort to comply with the BOI report filing deadline even if it does not receive a tax identification number by the time its report is due. The FAQs are available here.
FinCEN Issues Notice on Where Owner Info Should Be Reported, Bloomberg Law
Businesses required to report ownership information must do so to both FinCEN and financial institutions where they are a customer, the Treasury Department bureau said in a notice released Friday. The notice from FinCENclarifies how businesses cannot fulfill their obligations to report their information to the body by just reporting it to their financial institutions, as each collects different information for different purposes. Read more here (subscription required).
National Labor Relations Board (NLRB) News: NLRB Issues Fair Choice–Employee Voice Final Rule
On July 26, NLRB issued its Fair Choice–Employee Voice Final Rule, restoring three key policies that provide workers with a fair opportunity to decide whether they want union representation in the workplace and a process that respects workers’ choices: the blocking charge policy, voluntary recognition of a union, and construction industry bargaining relationships. Read more here.
OPM Finalizes Rule to Ensure Temporarily Promoted Feds Are Paid Properly, Government Executive
The Office of Personnel Management on Thursday finalized new regulations intended to ensure that federal workers who are temporarily promoted are paid appropriately for the duration of their detail. A two-decades-old Office of Personnel Management advisory opinion capping increased pay for federal workers temporarily performing duties of a higher-graded position at 120 days inadvertently penalized workers rather than their errant employer. Read more here.
‘We Need to Do More’ to Close Gender-Based Pay Gap, OPM Says, Federal News Network
The Office of Personnel Management is taking further steps to address a gender-based pay gap that federal employees continue to experience. After some governmentwide changes to address a federal pay gap, OPM called on agencies with their own pay systems to review their policies and make adjustments. Read more here.
LITIGATION & DISPUTE RESOLUTION
Schiff’s Bill Would Expand FOIA Provisions To Federal Courts, Law360
Rep. Adam Schiff, D-Calif., introduced legislation Tuesday that would extend the rights provided by the federal Freedom of Information Act to the work of the judicial branch. Read more here (subscription required).
Federal Communications Commission (FCC) Final Rule: Cybersecurity Labeling for Internet of Things (IoT)
On July 30, FCC published a final rule to establish a voluntary cybersecurity labeling program for wireless consumer IoT products. This rule is intended to provide simple and understandable labels to include a trust mark and QR code for a registry of detailed cybersecurity information. The unpublished final rule is available here and will be effective August 29, 2024.
HHS Reorg Seeks to Streamline Tech and Cyber Policy, Government Executive
The Department of Health and Human Services is restructuring its operations to prioritize the use of digital more effectively and streamline emerging capabilities, including artificial intelligence. Read more here.
INTELLECTUAL PROPERTY & TECHNOLOGY RIGHTS
USPTO No Longer Wants To Change TM Response Deadlines, Law360
The U.S. Patent and Trademark Office said Thursday it has decided to keep current post-registration response deadlines after the agency concluded that many trademark owners would not be subject to the proposed shorter response period. Read more here (subscription required).