Weekly Update for Government Contractors and Commercial Businesses– May 19, 2022

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GOVERNMENT CONTRACTS

GSA Seeks Feedback on Potential Changes to Polaris Joint Ventures, Cy Alba, May 13, 2022
On May 13, 2022, the General Services Administration (GSA) published draft proposed changes to the Polaris Government-Wide Acquisition Contract (GWAC). Specifically, the agency is proposing to revise Section L.5.1.3.1 of the request for proposals (RFP), dealing with joint ventures, after reviewing industry feedback and engaging with the Small Business Administration (SBA). GSA emphasized that the language is in draft form and is subject to change. Most importantly, members of the small business information technology community are encouraged to provide feedback to Polaris@gsa.gov by May 23, 2022. Read more here.

Federal Circuit Clarifies the Scope of Incorporation by Reference, Kevin Barnett, May 10, 2022
A recent Federal Circuit decision supplies helpful direction to contractors wishing to incorporate their standard commercial terms and conditions into their government contracts. The federal government often claims that it wants to make its contracting process more like the commercial marketplace, but the government does not make it easy for commercial companies to do business with it. CSI Aviation, Inc. v. Department of Homeland Security highlights the potential confusion surrounding the terms and conditions governing government contracts for commercial products or services. There, the contractor succeeded after several levels of appeals, with the Federal Circuit ruling that the contractor’s cancellation policy was incorporated by reference into its contract. To minimize disputes over which terms apply, federal contractors should ensure that their standard commercial terms and conditions are unambiguously incorporated by reference. Read more here.    

SBA Terminates Class Waiver to Nonmanufacturer Rule for Radiology Equipment
The Small Business Administration (SBA) is terminating the class waiver of the Nonmanufacturer Rule (NMR) for the following products, under NAICS code 334517: irradiation apparatus manufacturing, computerized axial tomography (CT/CAT) scanners manufacturing; CT/CAT (computerized axial tomography) scanners manufacturing; fluoroscopes manufacturing; fluoroscopic X-ray apparatus and tubes manufacturing; generators, X-ray, manufacturing; irradiation equipment manufacturing; X-ray generators manufacturing; and X-ray irradiation equipment manufacturing, because the agency learned of a small business manufacturer of the identified products. Small businesses will no longer be authorized to provide the product of any manufacturer regardless of size on the identified items unless a federal contracting officer obtains an individual waiver to the NMR. Termination of the class waiver is effective immediately. Read more here.

SBA Adjusts Civil Monetary Penalties for Inflation
The Small Business Administration (SBA) issued a final rule that amended its regulations to adjust for inflation the amount of specified civil monetary penalties. This rule took effect May 11, 2022. Read more here.

President Biden Already Willing to Increase Recent Defense Spending Request
NextGov reported that a Defense Department official acknowledged that inflation may cause the Biden administration to request more money a mere six weeks after the President sent his $773 billion spending request to Congress for fiscal year 2023. Read more here. 

GAO Recommends Steps to Reduce $1.8 Billion Maintenance Backlog for Navy Surface Ships
Reducing the Navy’s nearly $1.8 billion backlog for maintenance on surface ships could help fleets last longer and improve Navy operations, the Government Accountability Office (GAO) said. GAO made recommendations for improving the Navy’s maintenance process. One recommendation was to include backlog reduction in performance goals. Read more here.

Upcoming Government Contracts Presentations

EVENT: Basic Requirements for Government Contracting, May 23, Peter Ford. Read more here.

EVENT: Peeps for Keeps: Finding and Managing Talent in a Competitive Job Market, May 24, Nichole Atallah. Read more here.

WEBINAR: Supply Chain Pain: How Government Contractors Can Get Relief for Supply Chain Problems, May 24, Kevin Barnett. Read more here.

WEBINAR: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, June 1, Peter Ford and Meghan Leemon. Read more here.

LABOR & EMPLOYMENT

DOL Recovers $799,000 in Back Wages After Investigation Finds New Jersey Contractor Paid Electricians Incorrect Wages and Fringe Benefits
Eleven electricians on a federally funded construction project in Paterson, NJ, recovered $799,000 in back wages from Deen Electrical Contractors Inc. The Jersey City, NJ, electrical subcontractor violated the Davis Bacon Act by paying electricians wages and fringe benefits at a lower rate intended for laborers, the Department of Labor (DOL) announced. Read more here.

DOL Recovers $624,000 in Back Wages for 92 Charleston Restaurant Workers
A Department of Labor (DOL) investigation found that 167 Raw King Street LLC in Charleston, SC, required tipped employees at its restaurant to share tips, which invalidated the employer’s claim to a tip credit. This practice led to violations of federal minimum wage and overtime rules because the company failed to pay tipped employees the difference between their direct wages and the minimum wage and failed to pay them the proper overtime rate. DOL recovered $624,017 in back wages for 92 workers. Read more here.

Technological Services Company Pays $319,000 in Back Overtime to 57 Employees in New York
Pictometry International Corp., doing business as EagleView Technologies Inc., paid $319,141 in back wages to 57 employees after a Department of Labor (DOL) investigation concluded the company had erroneously classified 57 employees at its Rochester, NY, facility as being exempt from overtime pay. The company, which provides technological services such as aerial imagery and data analytics, also failed to keep time records for these workers and did not include a non-discretionary yearly bonus in calculating their overtime pay rates, DOL said. Read more here.

Florida Pediatric Special Needs Caregiver to Pay $303,000 in Back Overtime Pay to 160 Workers
A Department of Labor (DOL) investigation found that Angels on Earth PPEC Inc., a pediatric special needs caregiver in Florida, failed to pay workers time-and-one-half their regular pay rate for their overtime hours and to maintain a record of their work hours. The employer will pay $303,367 in back wages for 160 workers for these Fair Labor Standards Act violations. Read more here.

Upcoming Labor & Employment Presentations

EVENT: Peeps for Keeps: Finding and Managing Talent in a Competitive Job Market, May 24, Nichole Atallah. Read more here.

LITIGATION & DISPUTE RESOLUTION

Construction Company Agrees to Pay $2.8 Million to Resolve Allegations of Small Business Subcontracting Fraud
Hensel Phelps Construction Company, a large construction company headquartered in Greeley, CO, has agreed to pay $2.8 million to resolve allegations that it improperly manipulated a federal subcontract. The contract, to provide kitchen and food service equipment for the Armed Forces Retirement Home, was designated for a business owned and operated by a service-disabled veteran. According to the Department of Justice (DOJ), Hensel Phelps admitted that after it fully negotiated the subcontract with a company that was not a service-disabled, veteran-owned small business (SDVOSB), it entered into a subcontract with an SDVOSB instead of executing the subcontract with the first company. The subcontract provided for the same work and used the same terms and pricing to which Hensel Phelps had agreed with the first company, but it included an additional 1.5% fee for the SDVOSB. Hensel Phelps admitted that it should have known that the SDVOSB was merely a passthrough for the first company, which was providing all the work on the subcontract, and that the SDVOSB’s role was limited to providing its SDVOSB status and making it appear as though an SDVOSB was performing the work. Read more here.

Virginia IT Company Agrees to Pay $800,000 to Resolve False Claims Act Allegations
An information technology company in Arlington, VA, has agreed to pay $800,000 to resolve allegations of False Claims Act violations. Subsystems Technologies Inc. (STI) admitted that its employees purchased electronic and luxury items for personal use by themselves and government employees and then improperly charged those items against the government contracts STI held for services at Picatinny Arsenal in Morris County, NJ, the Department of Justice announced. Read more here.

Court Allows Limited Discovery in Bid Protest Alleging Misrepresentation by Awardee
In a post-award bid protest, the U.S. Court of Federal Claims ruled that plaintiff American Roll-on Roll-off Carrier Group, Inc. (ARC), should be allowed to seek information during discovery about an alleged misrepresentation by the awardee, HomeSafe Alliance, LLC. ARC claims that HomeSafe materially misrepresented the security level of its information technology system before winning an $18 billion relocation services contract from the Department of Defense, U.S. Transportation Command. Finding that ARC is entitled to limited discovery related to meeting its burden to prove that HomeSafe’s representation was false, the court allowed ARC to serve Home Safe with two interrogatories and a request for admission. Read more here.