Weekly Update for Government Contractors and Commercial Businesses – March 16, 2023

If you have questions concerning the content below, please visit this link.

GOVERNMENT CONTRACTS

Crackdown on Pandemic Fraud: Impact on Small Business Government Contractors, 03.13.23, Cy Alba and Dozier Gardner
On March 2, 2023, the White House announced that President Biden intends to ask Congress for $1.6 billion to combat ongoing fraud related to COVID relief programs, referred to as “pandemic fraud.” This comes in the wake of “historic” levels of fraud that occurred during the COVID-19 pandemic, the full extent of which is still not fully known. In the White House’s announcement, it notes that the requested $1.6 billion will be for President Biden’s three-part Pandemic Anti-Fraud proposal. These three parts aim at prosecuting those who committed pandemic fraud, investing in fraud prevention, and investing in procedures to protect individuals from identity theft. Thus, it is becoming evident that the federal government is beginning to seriously crackdown on pandemic fraud. This blog summarizes how these developments can impact small business government contractors. Read more here.

SBA HUBZone Map Update Expands Small Business Program Participation and Federal Contract Eligibility
The Small Business Administration announced the launch of a new Historically Underutilized Business Zone (HUBZone) preview map. The HUBZone preview map shows changes that are scheduled to take effect on July 1, 2023, reflecting updates from the 2020 U.S. Census. Read more here.

Accountability and Cost Efficiency Goals Amplified in President Biden’s $6.9 Trillion Budget Proposal
President Biden unveiled his $6.9 trillion budget proposal for fiscal 2024. It looks to ensure that the government is “equitable, effective and accountable,” as well as cut wasteful spending and further crack down on fraud. Biden is proposing a total of $1.7 trillion in base discretionary funding, with an increase of 7.3% or $46.9 billion in non-defense discretionary spending from fiscal 2023 and a boost of 3.3%, or $28.1 billion in defense funding. However, if you count Veterans Affairs medical expenses in non-defense discretionary funding, which the White House started separating out last year, then the increase is 6.5%. Read more here. The full budget is available here.

Agency Statements Regarding President Biden’s Fiscal Year 2024 Budget

• Statement by SBA Administrator Guzman on President’s Fiscal Year 2024 Budget
• Statement by GSA Administrator Robin Carnahan on the President’s Fiscal Year 2024 Budget
• DOL Secretary Marty Walsh Addresses President Biden’s Fiscal Year 2024 Budget

Biden Administration Releases National Cybersecurity Strategy
The White House released its National Cybersecurity Strategy, which requires minimum performance-based security standards for critical infrastructure owners and operators. The Administration plans to use federal procurement as a tool for improving accountability for cybersecurity within products and services. See a fact sheet on the National Cybersecurity Strategy here. Read more here.

GSA Extends EPA Flexibility Through End of FY 2023
According to the Coalition for Government Procurement, the General Services Administration published an extension to an Acquisition Letter that allows contracting officers to approve Economic Price Adjustments (EPAs) to contracts without further consultation through September 30, 2023. The first version of the letter in March 2022 lowered the level of additional approval for EPAs needed from a contracting director to one level above the contracting officer, but a supplement published in September of last year eliminated the need for additional approval altogether. Intended to allow contractors to update prices when economic conditions change, EPAs have become an essential flexibility for Federal contractors as inflation hit a 40-year high of 9.1 percent in Summer 2022 and remains, at 6.4 percent in January, above historic averages.

GSA Announces Demand Data Initiative
The General Services Administration’s (GSA) General Supplies and Services (GSS) Portfolio announced a new initiative focusing on Demand Data to improve Delivery and Price/Value initiatives. Demand data allows GSA to use transactional data to identify what items are purchased the most across business lines. As part of the initiative, GSA is sharing the 25,000 top selling items within the GSS. GSS expects that the initiative will help contractors better tailor their price list to meet customer demand, reduce price lists to enable shorter turnaround on modifications, and showcase areas where product availability plays a key role in determining demand. Read more here.

Defense Pricing and Contracting Releases 2022 Year in Review
The Department of Defense’s Defense Pricing and Contracting unit released its unclassified Year in Review touting the “resolve and adaptability” of the defense contracting workforce and providing a wide-ranging look at the office’s operational and policy endeavors over the past calendar year. Read more here.

GSA Releases Second OASIS+ Draft RFP
The General Services Administration (GSA) released its Second OASIS+ Draft Request for Proposals (RFP). Within the request, GSA released a cover letter outlining some of the changes made in the new version and an additional Q&A covering industry questions from the first RFP. A second Q&A answering more questions will be released by GSA shortly. Read more here.

GSA Officials Misled Agencies About Login.gov
General Services Administration (GSA) officials misled federal agencies over a period of years about its identity and authentication single sign-on service, Login.gov, meeting government standards for identity proofing, according to a bombshell watchdog report. GSA officials included claims about meeting National Institute of Standards and Technology standards in interagency agreements, billed agencies over $10 million for Login.gov services that purported to meet those standards—but did not—for years, and included those false statements in its Technology Modernization Fund application as well. 

GSA: Odd Email About Changes to SAM Registration Info Was a Glitch, Not a Hack
Federal contractors and grant recipients got a scare Wednesday morning after waking up to a strange email claiming to have changed critical information about their government registration. The fright was further compounded by an unscheduled website outage preventing users from checking to ensure their information was correct. According to the General Services Administration, the email was caused by a system bug and the outage was unrelated. Read more here.

GSA Winter 2023 MAS Industry Newsletter
Every quarter, the Multiple Award Schedule Program Management Office (MAS PMO) publishes a newsletter with the latest updates and information for industry partners.

Articles for this quarter cover:

• New Requirement for Registering a Contract with the Vendor Support Center
• Entity Validations in SAM.gov
• GSA Advantage Order Status – Tracking Cancellation and On-time Scores!
• Updated Model Subcontracting Plans
• Reminder! No Action Needed for Erroneous Change of Name, Address, or Novation Email
• New “Interested” Feature in eBuy Brings Benefits to Both Buyers and Sellers
• Multiple Award Schedule Program Working to Address Inflationary Impacts
• Robomod Updates and Contract Compliance
• 2023 FAST Monthly Training Series
• Keep Your GSA Advantage Catalog Up to Date
• MAS Consolidation Phase 3
• Catalog Management Updates
• MAS Office Hours

Read more here.

Defense Production Act Title III Presidential Determination for Airbreathing Engines, Advanced Avionics Position Navigation and Guidance Systems, and Constituent Materials for Hypersonic Systems
President Joe Biden signed a presidential determination (PD) authorizing the use of Defense Production Act (DPA) Title III authorities to rebuild and expand the nation’s domestic hypersonics industrial base. The authority specifically targets air-breathing engines, advanced avionics, guidance systems, as well as constituent materials for hypersonic systems. The Department of Defense (DOD) is leveraging this authority to strategically accelerate the transition of operational prototypes and advanced manufacturing technologies across the spectrum of airbreathing engines and advanced avionics position, navigation, and timing systems. Kinetic capabilities, including those for hypersonic systems, were one of the key focus areas in President Biden’s Executive Order 14017, “America’s Supply Chains.” The efforts executed under these authorities will be part of a larger DOD strategy to ensure the United States’ preeminence in these game changing technologies as well as partnership with allied nations seeking similar capabilities. Read more here.

Federal Management Regulation: Real Estate Acquisition
The General Services Administration (GSA) published a final rule to amend the Federal Management Regulation (FMR) part regarding real property acquisition to clarify the policies for entering into lease agreements for high-security space in accordance with the Secure Federal Leases from Espionage And Suspicious Entanglements Act, also referred to as the Secure Federal LEASEs Act. This final rule addresses the following specific requirements in Section 4 of the Act:

• Identification of beneficial ownership information.
• Development of a governmentwide plan for identifying all immediate, highest-level, and beneficial owners of high-security leased space.
• Submission of a corresponding report to Congress.

This final rule addresses the annual submission of ownership disclosures to GSA from agencies operating under either independent statutory leasing authority or a grant of delegated leasing authority from GSA. The rule is effective April 6, 2023. Read more here.

VA Sprint Team Outlines 4 Key Issues Leading to EHR Rollout Problems
The Department of Veterans Affairs (VA) is outlining a plan to address some of the biggest problems to emerge from the troubled rollout of its new Electronic Health Record. The VA, in its EHR Modernization Sprint Report, also detailed the steps the agency will go through to determine whether upcoming sites are prepared to make the migration to the new system. The report, released late on March 10, doesn’t mention any changes to the VA’s timetable. The VA expects the EHR will continue to go live at additional medical centers this June. Read more here.

Upcoming Government Contracting Presentations

WEBINAR: Understanding and Avoiding Affiliation for Small Business Government Contractors, March 21, Peter Ford. Read more here.
 
EVENT: VIP INTERNATIONAL: Legal Considerations When Supporting OCONUS Contracts, March 28, Cy Alba. Read more here.
 
WEBINAR: Overcoming the Inflation Crisis: The Ins and Outs of Inflation Relief for DOD Contractors, April 4, Kevin Barnett and Lauren Brier. Read more here.
 
EVENT: Navigating the FAR/DFARS: The Most Confusing and Little-Known Clauses, April 11, Lauren Brier. Read more here.

LABOR & EMPLOYMENT

Alabama Auto Supplier to Pay $1.3M After Judge Upholds OSHA Findings
The independent Occupational Safety and Health Review Commission affirmed citations issued by the Department of Labor’s Occupational Safety and Health Administration (OSHA) to a global auto parts supplier after the 2016 death of a 20-year-old machine operator at an Alabama manufacturing facility. The decision comes after Joon LLC—operating as AJIN USA—contested OSHA citations after an investigation of how an employee at its Cusseta facility suffered fatal crushing injuries in June 2016 in a robotic machine. OSHA inspectors learned that the machine operator and three co-workers entered a robotic cell on the assembly line to clear a sensor fault when a robot inside the cell restarted abruptly, crushing a young woman inside. Its inspection led OSHA to cite AJIN USA for 51 safety violations, including 48 willful violations. On February 10, 2023, an administrative law judge upheld the majority of the violations that OSHA issued. AJIN USA will pay more than $1.3 million in penalties to address the violations. Read more here.

Upcoming Labor & Employment Presentations

WEBINAR: Collective Bargaining for the Federal Contractor, April 13, Sarah L. Nash. Read more here.
 
LITIGATION & DISPUTE RESOLUTION

Florida’s Lakeland Regional Medical Center Agrees to Pay $4 Million to Settle Common Law Allegations for Impermissible Medicaid Donations
Lakeland Regional Medical Center (LRMC) has agreed to pay the United States $4 million to resolve allegations that it made donations to a local unit of government to improperly fund the state’s share of Medicaid payments to LRMC. The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities, and is jointly funded by the federal and state governments. Under federal law, Florida’s share of Medicaid payments must consist of state or local government funds, and may not come from “non-bona fide donations” from private health care providers, such as hospitals. A non-bona fide donation is a payment—in cash or in kind—from a private provider to a governmental entity that is then returned to the private provider through a payment by Medicaid. Because Medicaid services are reimbursed jointly by the federal and state governments, a non-bona fide donation causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services. Read more here.