In This Issue

Government

Commentary and Proposed Unified Suspension & Debarment Rule for Procurement and Nonprocurement Activities1

In the early 1980s, the federal government significantly improved how executive branch agencies addressed fraud, waste, abuse, poor performance, and noncompliance in government funded transactions. One important part of that effort standardized executive branch discretionary suspension and debarment procedures (sometimes referred to in the private sector as “blacklisting”)2 in two separate rulemakings — one governing federal procurement transactions3 under the Federal Acquisition Regulation (FAR); the second for federal assistance, loans, and other benefits (ALOB) under a jointly issued set of agency regulations known as the “Nonprocurement Common Rule” (NCR).4 Both initiatives were coordinated by the Office of Management and Budget (OMB).5 These government-wide rules were the direct result of several decades of criticism by the legal and business communities,6 a study by the Administrative Conference of the United States (ACUS),7 and several court decisions that established a constitutional basis for a fundamentally fair debarment process.8 Congressional oversight committees, government watchdog organizations, and the inspectors general community also helped develop today’s regulatory scheme.9

Federal Government

Maintaining Profitability of Government Contracts in the Age of Increasing Tariffs

The imposition of tariffs on imported goods and services is likely to create headaches for government contractors who source goods from foreign countries, either for direct delivery to the U.S. Government or for integration into goods and services being delivered to the U.S. Government.1 In particular, the imposition of tariffs will increase the costs of goods and services that government contractors, including those working with the Department of Defense (DoD), are going to pay for materials and goods in furtherance of their contract with the U.S. Government.2 Without careful planning, these increased costs may erode the profit margins that these companies expect to realize from execution of the underlying contracts.3 Through careful planning and review of existing contracts, there is an opportunity for contractors to preserve their profit margins through a price adjustment from the U.S. Government.

Taxation

Grappling with Tax Exemption Under Foreign Assistance Contracts, Grants, and Cooperative Agreements

When the U.S. Government provides foreign assistance to developing countries, it is typically with the condition that the assistance be exempt from local taxes.1 In turn, the U.S. Government expects organizations that perform foreign assistance contracts, grants, and cooperative agreements to invoke these exemptions.2 As discussed in this article, this policy is designed to maximize the effectiveness of U.S. foreign aid, but it can pose implementation challenges for the U.S. Government and firms performing foreign assistance awards.

Trade Regulation

The Kaspersky, ZTE & Huawei Sagas : Why the US Is in Desperate Need of a Standardized Method for Banning Foreign Federal Contractors

Foreign federal government contractors “are susceptible to political whims.”1 Some go so far as to call such contractors “[g]eopolitical [p]awn[s].”2 These statements have rung particularly true in the last few years. In the wake of increasing political and media attention on foreign government interference in U.S. affairs,3 the federal government has taken steps to ban certain international companies from contracting with federal agencies.4 The bans have targeted companies in Russia and China, countries long considered hostile to U.S. national security.5 Indeed, contracting bans have become not only a means of protecting national security, but also a mirror of current political tensions.

Diversity & Inclusion

Contracting in the Era of Mandatory Immigration Dentention

On February 18, 2019, Immigration and Customs Enforcement (“ICE”) arrested and detained a six-month pregnant woman at an ICE detention center.1 Four days later, she went into premature labor at the detention center, delivering an unresponsive newborn who was pronounced dead soon after birth.2 While one premature death is more than enough to rethink the current way of contracting immigration detention, this story is not uncommon. In the three months between December 2018 and February 2019, three other deaths occurred in ICE contracted detention centers, two of whom were detained children.3 As stated by former Department of Homeland Security (“DHS”) Secretary Kirstjen Nielsen, the current system is at a “breaking point.”4 Yet, the government has made no substantive changes in the form of privatized contracted detention.5

Diversity & Inclusion

Contracting in the Era of Mandatory Immigration Dentention

On February 18, 2019, Immigration and Customs Enforcement (“ICE”) arrested and detained a six-month pregnant woman at an ICE detention center.1 Four days later, she went into premature labor at the detention center, delivering an unresponsive newborn who was pronounced dead soon after birth.2 While one premature death is more than enough to rethink the current way of contracting immigration detention, this story is not uncommon. In the three months between December 2018 and February 2019, three other deaths occurred in ICE contracted detention centers, two of whom were detained children.3 As stated by former Department of Homeland Security (“DHS”) Secretary Kirstjen Nielsen, the current system is at a “breaking point.”4 Yet, the government has made no substantive changes in the form of privatized contracted detention.5

Federal Government

Seeing Through the Haze: Navigating Veteran Employment Rights in Government Contracting , Medical Marijuana , and the Drug -Free Workplace Act of 1988

Over the past twenty years, medical marijuana1 has seen an uptick in general societal acceptance.2 Individuals sympathizing with those who suffer from debilitating illnesses, coupled with the recently developed therapeutic uses of the drug, has allowed medical uses of the substance to gain traction.3 Studies show medical marijuana provides relief for many chronic illnesses, including chronic pain, sleep disorders, anxiety, depression, muscle spasms, and arthritis, among others.4

Federal Government

Resolving the Confusion: Granting the Government Unfettered Discretion to Dismiss Qui Tam Actions

On January 10, 2018, Michael Granston, the Director of Commercial Litigation in the Fraud Section at the Department of Justice (DoJ), disseminated a memo to all attorneys in his section.1 This memo advocated for the government to move to dismiss some False Claims Act (FCA) qui tam actions for several reasons.2 Granston advised the DoJ that dismissals would help to minimize frivolous or parasitic suits, conserve government resources, and look out for the U.S. Government and contractor interests.3 He advocated for dismissals pursuant to 31 U.S.C. § 3730(c)(2)(A), a subsection of the FCA that allows the government to move to dismiss relators’ actions when deciding whether to intervene in their actions.4 The DoJ has rarely dismissed qui tam actions pursuant to 31 U.S.C. § 3730(c)(2)(A),5 but the memo advocated for more use of the dismissal power to save government resources, dismiss frivolous actions, and solve DoJ capacity issues going forward.6