Weekly Update for Government Contractors and Commercial Businesses – January 27, 2023

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GOVERNMENT CONTRACTS

SBA Releases Preview of New HUBZone Maps Effective July 1, 2023, 01.20.23, Jon Williams and Daniel Figuenick
HUBZone contractors have been anxiously awaiting updates to the HUBZone maps. In 2021, the Small Business Administration (SBA) extended the “freeze” on the HUBZone maps until June 30, 2023, to provide enough time to update the maps based on the 2020 Census results. SBA targeted the release of a beta version of the new HUBZone maps in January 2023, and SBA recently hit that mark. A preview of the new HUBZone maps that will take effect on July 1, 2023, is now up on SBA’s website here. Government contractors that are currently HUBZone certified, or are planning on applying to the HUBZone program, should promptly check to see if their principal office location will be considered HUBZone eligible under the new maps. Read more here.

PilieroMazza Serves Up Another Client Win on PPP Loan Forgiveness Appeal, 01.19.23, Cy Alba
PilieroMazza is pleased to announce that attorneys from the Firm’s Government Contracts and Litigation & Dispute Resolution practice groups overturned another PPP (Paycheck Protection Program) loan forgiveness denial for a client that was wrongfully denied forgiveness by the Small Business Administration. “It’s important for businesses that receive a denial of their PPP loan forgiveness to know their rights and to carefully assess the basis for the denial,” said Cy Alba, Practice Group Chair of the Government Contracts Group. “We’re of course pleased with the results our team was able to obtain for the client as in many cases the unexpected loan repayment can be crippling for small businesses.” Read more here.

Treasury Resorts to ‘Extraordinary Measures’ After U.S. Hits Debt Limit
Treasury Secretary Janet Yellen notified congressional leaders that her office will begin to implement “extraordinary measures” to keep the U.S. government from defaulting on its debt. The nation’s debt climbed to more than $31.4 trillion last week, federal financial data shows, crossing the threshold set by Congress when it last raised the nation’s borrowing limit more than a year ago. Read more here.

SBA Administrator Guzman: New Census Data Shows Record Pace of Small Business Applications Has Continued Under Biden-Harris Administration
Administrator Isabella Casillas Guzman, head of the Small Business Administration (SBA), issued a statement in response to data released by the U.S. Census Bureau: “This new Census data shows the Biden-Harris small business boom continued in 2022, with a rapid pace of new business applications second only to the record set in 2021. Since the start of this administration, small business applications reached a high of 10.5 million, the most in any two years in our nation’s history. This report is even more good news for our economy, with steady and stable growth, as well as unprecedented investments in infrastructure, manufacturing, and R&D, bringing abundant opportunities for America’s entrepreneurs.” Read more here.

Class Deviation—Section 890 Pilot Program to Accelerate Contracting and Pricing Processes
The Department of Defense (DOD) published a class deviation that, effective immediately, rescinds and supersedes Class Deviation 2020-O0020, issued August 14, 2020, to extend the pilot program authority provided by section 890 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019, as amended by both section 825 of the NDAA for FY 2020 and section 818 of the NDAA for FY 2023. Section 890, as amended, authorizes DOD to conduct a pilot program for contract actions in excess of $50 million, which allows price reasonableness determinations to be based on actual cost and pricing data for purchases of the same or similar products for the DOD, and a reduction of the cost and pricing data to be submitted in accordance with FAR 15.403-4. Read more here.

OMB Streamlines Contracting Officer Training with Certification Update
The Office of Management and Budget (OMB) released an update transitioning the Federal Acquisition Certification in Contracting to correspond with the Department of Defense’s Defense Acquisition Workforce Improvement Act standard. The change will shift the three-level system to a single certification, with new hires having a year to complete four courses focused on the foundational knowledge of federal acquisition. Read more here.

NIST Releases Potential Updates to Its Cybersecurity Framework
The National Institute of Standards and Technology announced its intent to make new revisions to its Cybersecurity Framework (CSF) document, with an emphasis on cyber defense inclusivity across all economic sectors. The updates to the voluntary guidance are informed by responses received from a workshop on the forthcoming CSF 2.0 and a corresponding request for information published in early 2022. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Small Business Regulation: 2022 Year in Review, February 1, Jon Williams. Read more here.

WEBINAR: Unlocking the Secrets of Debriefings, Gov’t Evaluation of Proposals and Protests, February 9, Katie Burrows and Eric Valle. Read more here.

EVENT: Considerations for 8(a) Participants, Graduates, and Their Contracts in M&A Transactions, February 14, Cy Alba and Abby Baker. Read more here.

LITIGATION & DISPUTE RESOLUTION

The FCA at the Supreme Court, Part 1 of 4: The Government’s Right to Dismiss a Whistleblower Claim, 01.19.23, Matt Feinberg and Annie Hudgins
The False Claim Act (FCA) is seeing quite a bit of action at the Supreme Court this term, with multiple cases under consideration. This is the first installment in PilieroMazza’s blog series on the “The FCA at the Supreme Court,” where we will examine active cases, comment on decisions once they are issued, and discuss ways defendants can protect themselves in FCA litigation. Read more here.

Construction Company Owner Sentenced for Fraud in Securing Millions of Dollars in Contracts Intended for Service-Disabled Veteran-Owned Small Businesses
The owner of several companies in the construction industry was sentenced to 27 months in prison and ordered to pay a $1.75 million fine for his role in a long-running scheme to defraud the U.S. government. A jury convicted Michael Angelo Padron of conspiracy to defraud the U.S. and wire fraud for his role in obtaining valuable government contracts under programs administered by the Small Business Administration. The evidence showed that Padron conspired with others to install a service-disabled veteran as the ostensible owner of a general construction company held out as a Service-Disabled Veteran-Owned Small Business. Read more here.

LABOR & EMPLOYMENT

The White House Will Require Agency Labor Advisors to Oversee Federal Contractors
Labor advisors at federal agencies are career officials who help agency employees and federal contractors follow federal contract, employment, and labor laws and liaise with enforcement agencies like the Department of Labor. Although federal regulations covering government contracting often stipulate that tasks should be performed by an agency’s labor advisor, there is no requirement that agencies designate an employee to serve in that role, and many operate without one. In a recent memo, however, Office of Management and Budget Director Shalanda Young and Labor Secretary Marty Walsh changed that, requiring all of the 24 agencies covered by the Chief Financial Officers Act to designate a labor advisor by February 15, 2023. Read more here.

DOL Obtains Judgement Ordering Auto Parts Seller, Logistics Company to Pay $5.6M to 1,398 Misclassified Drivers
A national auto parts distributor and an Arizona logistics firm that misclassified 1,398 drivers as independent contractors will pay them a total of $5.6 million in back wages and liquidated damages after the Department of Labor (DOL) obtained a consent judgment in federal court. The action comes after DOL’s Wage and Hour Division found that, by misclassifying employees, the company failed to meet minimum wage requirements, paid straight-time rates for all hours worked, failed to pay at time and a half for hours over 40 in a workweek, and failed to keep required timekeeping records. The company also required employees to use their personal vehicles for deliveries without compensation. By doing so, the employers denied their drivers’ rights under the Fair Labor Standards Act. Read more here.

Federal Court Orders Healthcare Provider to Pay $1.6M in Back Wages, Damages to 136 Employees
The Department of Labor (DOL) obtained a consent judgment in federal court requiring a Minneapolis private in-home care provider to pay $1.6 million in back wages and damages, as part of DOL’s effort to recover unpaid overtime wages for 136 healthcare workers in the Twin-Cities area. The court’s action follows an examination of the company’s payroll records from July 19, 2018, through September 1, 2020, by DOL’s Wage and Hour Division. The investigation found the company, operating as Baywood Home Care, violated federal law when it failed to pay the affected workers’ overtime wages for hours over 40 in a workweek, and did not maintain accurate pay records. As part of its recovery, the Wage and Hour Division assessed an equal amount in liquidated damages. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: Prevailing Wage: Davis-Bacon Act and Service Contract Act, February 9, Sarah Nash. Read more here.

WEBINAR: Top 5 Employment Challenges in 2023 for Government Contractors, February 22, Sarah Nash. Read more here.