Weekly Update for Government Contractors and Commercial Businesses– May 25, 2022

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GOVERNMENT CONTRACTS

Fraud Allegations Could Bedevil Borrowers in SBA COVID-19 Relief Programs for Many Years, Cy Alba, May 19, 2022
As everyone who has been tracking the COVID-19 relief programs since 2020 knows, at the outset there was massive confusion about the programs’ requirements as well as fear that funding could run out before businesses with uncertain futures could secure assistance. Now, two years later, we have heard from numerous clients who have received notice that the Small Business Administration (SBA) intends to audit the Paycheck Protection Program (PPP) Loan or Economic Injury Disaster Loan (EIDL) applications, and even of cases in which SBA is auditing both the original application and forgiveness well after forgiveness was granted. In light of this development, it is crucial that contractors keep detailed and accurate records related to their loans. Read more here.

Rand Report Presents New Way to Assess Contractors’ Performance Risks
Poor contractor performance is a recurring challenge to Department of the Air Force (DAF) acquisition programs, according to a Rand report titled “Early Predictive Indicators of Contractor Performance” that was released May 12, 2022. The report says DAF acquisition management may not be fully aware that contractors are in danger of falling short of contractual performance goals until a schedule deadline is missed, government testing indicates poor performance, or costs exceed expectations. The report presents a new way to assess contractor performance risks that identifies issues earlier than current information sources and metrics do. Read more here.

DOD Lacks Procedures for Other Transaction Agreements, OIG Finds
The Department of Defense (DOD) lacks policies and procedures for tracking Other Transaction (OT) agreements for follow-on production of a successful prototype and for tracking and awarding OTs for experimental purposes, a report from DOD’s Office of Inspector General (OIG) stated. The absence of policies and procedures resulted in Congress receiving inaccurate information regarding the number of prototype OTs and in DOD officials and Congress having limited information regarding the technological advancements for which the OTs are being used and the costs associated with those OTs, according to the report. Read more here.

GSA Selects 6 Innovative Building Technologies in Push to Net-Zero Carbon.
The General Services Administration (GSA)’s Green Proving Ground program announced it has selected six innovative building technologies to evaluate for potential use across the agency’s massive real estate portfolio. Read more here.

NNSA Cancels Contract Solicitation for Managing Pantex Plant and National Security Complex
The Department of Energy’s National Nuclear Security Administration (NNSA) is canceling its November 2020 contract solicitation for management and operation of the Pantex Plant and Y-12 National Security Complex and terminating the contract award announced in November 2021 for the two sites. NNSA intends to hold two new competitions for separate contracts to manage each site. Read more here.

Auditor Finds Some Lapses with SBA’s Reporting on Improper Payments
The Small Business Administration (SBA) Office of Inspector General (OIG) reported the findings from an annual audit of the SBA’s reporting of improper payments. Independent certified public accounting firm KPMG LLP conducted an audit, which found that the agency did not update the improper payment risk assessment for each program with annual outlays greater than $10 million, that some areas did not publish a target for reducing improper and unknown payments, that the Disaster Direct Loan Program did not publish corrective action plans, and that the Disaster Direct Loan Program reported a gross improper payments and unknown payments rate exceeding 10%. KPMG concluded that the agency should improve the accuracy of improper payment reporting and improve controls to prevent and reduce improper payments. Read more here.

J&J’s $133 Million Navy Base Contract Withstands Newimar Protest
Bloomberg Law reported that J&J Maintenance Inc. is cleared to perform a $133 million base operations support services contract for the U.S. Navy at the naval station in Rota, Spain, despite a protest from Newimar SA. The U.S. Court of Federal Claims said that Newimar, the incumbent contractor, failed to show that the Navy engaged in bad faith when it revised the solicitation under a corrective action in response to Newimar’s initial protest.

Partnership Between GSA and DIU Will Ease Access to Non-Traditional Technology Vendors
The General Services Administration (GSA) signed a memorandum of understanding with the Defense Innovation Unit (DIU) establishing the framework under which GSA will transition successfully prototyped DIU technology solutions to GSA contract vehicles. DIU is a Department of Defense organization that accelerates the adoption of emerging commercial technology into the U.S. military by lowering the barriers to entry and streamlining acquisitions via the Commercial Solutions Opening process. Read more here.

DOD Isn’t Doing Enough to Protect Sensitive Information, GAO Says
Many computer systems of the Department of Defense (DOD) contain sensitive information that is unclassified but that must be protected from public disclosure—known as Controlled Unclassified Information (CUI). An analysis of DOD’s data by the Government Accountability Office (GAO) found that while DOD components have taken actions to implement cybersecurity requirements for CUI systems, none of the agencies fully complied with DOD requirements. Read more here. Read the related Nextgov article here. 

Energy Department Provides $53 Million in Funding for Climate Change Tech
Nextgov reported that the Department of Energy announced $53 million in funding for small businesses pursuing cutting-edge technologies to address climate change. The funding is spread across 259 projects in 38 states. The projects range from cybersecurity solutions, nanotechnology, renewable energy, energy storage, carbon capture, security and resilience and fusion energy. Read more here.

Upcoming Government Contracts Presentations

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, Gov’t Evaluation of Proposals and Protests, June 1, Peter Ford and Meghan Leemon. Read more here.

LABOR & EMPLOYMENT

OFCCP’s Growing Activism Portends Stricter Enforcement, Sara Nasseri, May 20, 2022
The Department of Labor (DOL) Office of Federal Contract Compliance Programs (OFCCP) has taken several actions during the past six months that signal it will adopt a more forceful posture in ensuring that federal contractors meet their affirmative action and non-discrimination obligations toward their workforce. To prepare themselves for heightened scrutiny and tighter deadlines, government contractors should take steps now to set up their records for quick retrieval during OFCCP audits and rectify any unjustified pay disparities among their employees. Read more here.

OFCCP Likely to Audit Companies that Kept Hiring during Pandemic, Bloomberg Reports
Bloomberg reported that the Office of Federal Contract Compliance Programs (OFCCP) soon will release a list of 400 companies that it is planning to audit for compliance with federal nondiscrimination laws. The list is expected to prioritize industries that continued hiring during the pandemic, OFCCP Director Jenny Yang said. Once the filing period ends for the OFCCP’s Affirmative Action Plan Portal, those who don’t use it to register or certify likely will be prioritized for audits in the next CSAL list, she added.

DOL Debars Plumbing Contractor from Federal Contracts for Davis-Bacon Violations
The Department of Labor (DOL) debarred Morales Plumbing LLC of Geismar, LA, from future government contracts after DOL investigators found it violated the Davis-Bacon and Related Acts as a contractor on a Department of Housing and Urban Development project in Baton Rouge, LA. Investigators found Morales Plumbing failed to pay prevailing wage rates, fringe benefits, and wages for all work hours. DOL recovered $32,835 in back wages for three plumbers and one laborer. Read more here.

BUSINESS & TRANSACTIONS

Carlyle Group Buys Government Contractor ManTech for $3.9 Billion
Reuters reported that Carlyle Group Inc. will acquire ManTech International Corp for $3.93 billion, as the private equity firm strengthens its portfolio of defense contractors. Fairfax, VA-based ManTech performs contracting services for the intelligence community, the Pentagon and other government agencies. Read more here.