Weekly Update for Government Contractors and Commercial Businesses – November 12, 2020

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LABOR & EMPLOYMENT

BLOG: Executive Order on Combating Race and Sex Stereotyping: 5 Things Contractors Should Do Now, November 6, 2020, Nichole Atallah, Sarah Nash, and Sara Nasseri
The Trump administration issued Executive Order 13950 on September 22, 2020. The order prohibits federal contractors, federal agencies and certain federal grant recipients, as well as the military, from using workplace training that “inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” There are many uncertainties surrounding Executive Order 13950, including whether it will survive legal challenges and a potential change in presidential administration. This blog discusses measures that contractors should consider right now and identifies potential implications of noncompliance. Read more here.

Civil Rights Groups Sue to Block Diversity Training Order
Federal Computer Week reported that the NAACP Legal Defense Fund, National Urban League, and National Fair Housing alliance filed suit seeking an injunction to prohibit the Executive Order on Combatting Race and Sex Stereotyping from going into effect. The Executive Order impacted federal and contractor diversity and inclusion training. 

DOL Finalizes Rule on Resolving Bias Claims Against Contractors
The Department of Labor (DOL) published a final rule that codifies the procedures DOL’s Office of Federal Contract Compliance Programs (OFCCP) uses to resolve potential discrimination and other violations of the laws and regulations administered by OFCCP applicable to federal contractors and subcontractors. More specifically, the final rule will:

• Increase the number of contractors OFCCP evaluates;

• Increase focus on resolving stronger cases through the strategic allocation of limited DOL resources;

• Increase the transparency of OFCCP’s operations;

• Enable OFCCP to pursue the resolution of stronger cases through the Predetermination Notice procedures and early resolution conciliation option;

• Establish consistent parameters for findings and preliminary findings of discrimination;

• Provide contractors with more certainty as to OFCCP’s operative standards for compliance evaluations; and

• Provide standards and limitations on OFCCP’s use of pre-enforcement notices.

Read more here.

DOL Issues Two Wage and Hour Opinion Letters
DOL announced two opinion letters that address compliance issues related to the Fair Labor Standards Act (FLSA). The opinion letters issued are:

• FLSA2020-15: Addressing the compensability of time that employees spend attending voluntary training programs in certain situations.

• FLSA2020-16: Addressing compensability of employee travel time in certain situations involving construction sites located away from the employer’s principal place of business.

Read more here.

LITIGATION & DISPUTE RESOLUTION

BLOG: Protecting Your Company Against Revenue Clawbacks: Preference Actions (Part 1 of 3), November 4, 2020, Ora Nwabueze
A customer goes bankrupt and then they (or a trustee) demand you return money you were already paid for services or goods duly rendered. In this three-part series, we discuss strategies to protect your company against these revenue “clawbacks,” and how to implement these strategies before and after a customer’s bankruptcy filing. In this blog, we discuss the definition of preferences and the policy purpose of preference actions. In the second, we discuss specific actionable items to take to limit your exposure to them. Finally, we will discuss what to do legally if you are ever enmeshed in a preference action. Read more here.

CYBERSECURITY & DATA PRIVACY

Alliant2 Replacement Will Have CMMC Requirements
Federal Computer Week reported that another of the General Services Administration’s (GSA) emerging next-generation IT acquisition contracts will contain the Department of Defense’s (DOD) Cybersecurity Maturity Model Certification (CMMC) requirements. 

GOVERNMENT CONTRACTS

BLOG: SBIR Funding Proposals Due to NIH by January 5, 2021: 5 Tips for Your Submission, November 5, 2020, Christine Fries
The Small Business Innovative Research (SBIR) program provides grant or contract funding to small businesses seeking to commercialize innovative technologies. With $3.2 billion allotted to SBIR each year, there are twelve different agencies that have set aside SBIR funding. One agency is Health and Human Services which provides funding through the National Institutes of Health (NIH). NIH has three grant funding proposal deadlines a year. The next deadline is January 5, 2021. On the NIH / SBIR website, NIH states that the electronic submission process for grants can take from six to eight weeks, so this is a reminder to start now. Below are five key tips to help small businesses in their NIH SBIR electronic submission process. Read more here.

CLIENT ALERT: SBA Releases Loan Necessity Questionnaire for PPP Borrowers, October 30, 2020, Cy Alba
On October 26, 2020, the Small Business Administration (SBA) issued a notice in the Federal Register that, among other updates, announced two new forms, 3509 and 3510, related to the Paycheck Protection Program (PPP). Form 3509 is for for-profit businesses, while 3510 applies only to non-profit entities. These forms will be sent by PPP lenders only to PPP borrowers who received a principal loan amount of $2 million or more, and borrowers will have ten days to complete it. According to SBA, the purposes of these forms is to evaluate a borrower’s good-faith certification on their economic need, but in actuality, these forms attempt to retroactively modify PPP regulations and punish borrowers for not previously abiding by these new requirements. Read more here.

Federal Reserve Board Adjusts Main Street Lending Program Terms to Better Support Smaller Businesses
The Federal Reserve Board announced that it adjusted the terms of the Main Street Lending Program in two ways to better support smaller businesses that employ millions of workers and are facing continued revenue shortfalls due to the pandemic. First, the Federal Reserve Board reduced the minimum loan size for three Main Street facilities available to for-profit and non-profit borrowers from $250,000 to $100,000. Second, the Federal Reserve Board and the Department of the Treasury issued a new frequently asked question that clarified that PPP loans of up to $2 million may be excluded for purposes of determining a borrower’s maximum loan size under the Main Street Lending Program, if certain requirements are met. Read more here.

GSA Releases Federal Marketplace Strategy Update
GSA released an update on its Federal Marketplace Strategy. The Fall 2020 release contains the latest developments concerning GSA’s key initiatives including the Commercial Platforms Initiative, Schedules Consolidation, and Catalog Management.

COFC Bid Protest Decision on Eyeglasses, Veteran Owned Small Businesses, and the AbilityOne Program
The Court of Federal Claims (COFC) released a decision issuing a permanent injunction enjoining the Department of Veterans Affairs from transitioning contracts for prescription eyeglasses to the AbilityOne program and keeping those contracts as veteran-owned small business set aside contracts. Read more here.

DOD Improving Compliance with Buy American Laws
DOD released a memorandum on how it plans to improve compliance with the Buy American Act (BAA) after the DOD Office of Inspector General conducted six audits of DOD’s compliance with it and, in each, identified contracts where the BAA or Berry Amendment’s terms should have been included, where compliance with the BAA was never applied, or where potential Anti-Deficiency Act violations may have occurred. Read more here.

DOD Research and Development Spending Still Lags Behind Otherwise Healthy Defense Budget
Federal News Network reported that DOD research and development spending has not yet recovered from cuts imposed by the 2011 Budget Control Act, despite a significant increase in spending on products and services. Read more here.

Federal Surplus Property Use for Veteran-Owned Small Businesses and Small Businesses in Disaster Areas and Puerto Rico
SBA issued a final rule amending its regulations to expand access to the GSA Federal Surplus Personal Property Donation Program for certain small business concerns in accordance with the Recovery Improvements for Small Entities After Disaster Act of 2015, the Veterans Small Business Enhancement Act, and the John S. McCain National Defense Authorization Act for Fiscal Year 2019. These laws provide that small businesses in disaster areas, veteran-owned small businesses, and small business concerns located in Puerto Rico, respectively, should be considered for surplus personal property distributions. SBA, in coordination with GSA, is enacting certain procedures for determining which firms may participate in GSA’s existing surplus personal property program, and under what conditions. Read more here.

Upcoming Government Contracts Presentations

WEBINAR: Succeeding in Government Small Business Contracting: Subcontracting, Mentor / Protege, and Teaming Agreements, November 17, 2020, Cy Alba. Read more here.

WEBINAR: Most Common Pitfalls for SDVOSB and HUBZone Firms, November 17, 2020, Cy Alba. Read more here.

WEBINAR: Capture Planning: Go To Market Strategies, November 20, 2020, Cy Alba. Read more here.

WEBINAR: PCI Subcontracting Summit 2020: Administration, November 24, 2020, Cy Alba. Read more here.

WEBINAR: The CARES Act: Highlights and Planning for the Future, December 16, 2020, Cy Alba, Nichole Atallah, Kathryn Hickey, and Matt Feinberg. Read more here.