Protection of Contractor Rights

Agility Defense & Government Services, Inc. v. United States provides hope to contractors that incur higher than anticipated costs on a requirements contract or, alternatively, on construction contracts where line item prices are based on estimated quantities.  Continue Reading Federal Circuit Clarifies Requirements for Government-Furnished Estimated Quantities

Last month, we outlined Congress’ plan to block the implementation of President Obama’s Fair Play and Safe Workplaces executive order. Today, we report that the prognosis has grown even more grim for the former President’s initiative, as both the House of Representatives and Senate have passed measures blocking the order from taking effect – now, the only remaining hurdle to a full repeal of the Fair Play and Safe Workplaces order is the signature of the President.  Continue Reading The End is Near for “Fair Play and Safe Workplaces”

For the last few months, we have been following the troubled rollout of the “Fair Play and Safe Workplaces” rules, an Obama-era Executive Order that placed new requirements on contractors prohibiting certain labor practices. It is now becoming increasingly clear that the controversial act is likely to be a casualty of the new administration’s deregulatory agenda. Continue Reading Congress Strikes Blow to “Fair Play and Safe Workplaces”

Government contractors know that an unfavorable performance review posted to the Contractor Performance Assessment Reporting System (“CPARS”) can be extremely costly. Many negotiated solicitations include past performance as an important or even primary evaluation factor for contract award. An unfavorable review on a past contract can impose significant costs on the contractor to address the unfavorable review with contracting officers on future solicitations. However, the contractor saddled with an unfair and inaccurate CPARS review may now have a means to challenge the review and recover some of these costs.  Continue Reading A New Way to Claim Damages Resulting from an Unfavorable CPARS Rating

Several months ago, we summarized the issuance and implications of Executive Order 13673, known as the “Fair Play and Safe Workplaces” order. In short, the order requires federal contractors to:

  • Report labor law “violations” of itself or any of its subcontractors (where the estimated value of the subcontract exceeds $500,000) under various federal employment and labor laws;
  • Restrict the use of binding, pre-dispute arbitration provisions in non-collectively bargained employment contracts; and
  • Establish “paycheck transparency” through the issuance of wage statements to all individuals performing work under a covered contract.

Continue Reading Federal Court Puts a Halt to “Fair Play and Safe Workplaces”

fraudIn United States v. Nagle, the Third Circuit provided instruction on how to calculate the amount of “loss” defendants are attributed when being sentenced in a Disadvantaged Business Enterprise (“DBE”) fraud case.  Going forward, in a DBE fraud case, the loss calculation must include consideration of the fair market value of the services rendered to the government under the affected contract, or contracts.  Continue Reading Third Circuit Allows for Offset when Calculating Loss in DBE Fraud Cases

It is not uncommon, in the litigation of a federal construction claim, for the Government to produce gigabytes of electronic data, amounting to thousands and thousands of documents, in response to a motion for the production of documents.  Frequently, these “electronic” documents are simply the scanned versions of paper files in the Government’s offices.  In the scanning process, extensive duplication occurs and documents that are clearly separate in paper file folders are scanned together in a manner that often combines multiple documents.  Once combining occurs, it is very difficult for the recipient of the electronic information to tell where one document ends and the next one begins.  Documents and their attachments become confused, are re-arranged, and difficult to follow.  Continue Reading E-Discovery- Bring Back the Boxes

In December 2014, the Court of Appeals for the Federal Circuit issued an important decision that impacts how the 6 year statute of limitations (SOL) is applied under the Contract Disputes Act (CDA).  In Sikorsky Aircraft Corporation v. United States, the Court of Appeals determined that the CDA’s 6 year SOL for filing a claim is not jurisdictional, contrary to  number of lower court opinions.  This ruling has a number of important consequences that Federal Government contractors should understand.

claims handwritten with chalk on a blackboard

The CDA states that, “each claim by a contractor against the Federal Government…and each claim by the Federal Government against a contractor…shall be submitted within 6 years after the accrual of the claim.”  Prior to Sikorsky, this requirement was considered by most to be jurisdictional.  This meant that the 6 year time limit was absolute and, even in extenuating circumstances, could not be missed.  Therefore, any claim brought beyond 6 years simply could not be considered by the court.  The court would not have the jurisdiction.

While the decision in Sikorsky did not eliminate the CDA’s 6 year SOL, it does open the door to “equitable tolling” an important exception in applying a limitations period.  Equitable tolling is a legal concept that, in certain circumstances, allows contractors to bring claims after the time allowed by an applicable SOL.  Specifically related to the 6 year SOL under the CDA, a claim can be equitably tolled if a claimant diligently pursues its rights to bring that claim but extraordinary circumstances stood in its way.  For example, in Sikorsky the activities that brought about that claim began in 1999 but did not become material until 2003.  The claim was eventually brought in 2008 and a dispute ensued regarding whether the claim was timely filed.  The claimant, in this case the Government, argued that because the claim was not material until 2003 the SOL did not start to run until then and, therefore, when the claim was filed with the court in 2008, it was brought within the 6 year SOL.  Sikorsky, on the other hand, argued that the claim accrued in 1999 and was, therefore, barred by the 6 year SOL because it was not brought until 2008.  Ultimately, the court did not decide whether the claim was timely filed because it found that the appellant failed to meet its burden in proving the merits of the claim.  In the process of discussing that issue, however, the court made the important determination that the 6 year SOL was not jurisdictional.

In addition to opening the door for equitable tolling, Sikorsky will also change how SOL issues are litigated under the CDA.  Prior to this decision, because the CDA’s 6 year SOL was largely considered jurisdictional, any challenge to the Court’s jurisdiction had to be decided if and when it was raised.  The issue could not be waived and could come up at any time.  After review, if it was found that the court did not have jurisdiction, the matter would be dismissed because jurisdiction is a prerequisite for the court to decide a matter on the merits.  Based upon Sikorsky, things have changed.  First, a defendant must now raise SOL as an affirmative defense.  An affirmative defense must typically be plead at the first opportunity possible (usually in the Answer to a Complaint) or it is waived.  Second, a non-jurisdictional challenge to the SOL is normally decided when a court renders a decision on the merits.  For contractors doing business with the Federal Government this has an important practical effect.  If a contractor brings a claim against the Federal Government and also argues that equitable tolling should apply, post-Sikorsky a judge or jury will likely decide whether equitable tolling has taken place after all of the evidence on the facts have been heard.  This means that a claimant may have to litigate its entire claim before the court will even determine if the claim was raised within the 6 year SOL.

As a practical matter, if you have a claim, or a potential claim, do not sit on your rights.  While Sikorsky is helpful and important in terms of how the SOL is considered under the CDA, do not take any chances.  6 years represents a very generous limitations period.  Seek professional assistance as early as possible and get the claim submitted.  If you have any questions, please let us know.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Amy M. Kirby is an Associate in the firm’s Federal Contracting Practice Group and focuses her practice on government construction litigation. Amy’s practice includes a wide variety of federal construction matters.

Effective today, a new Anti-Trafficking rule will substantially change and increase federal contractors’ compliance and certification requirements.  The Anti-Trafficking rule requires that all federal contractors take certain actions related to combating human trafficking and slavery in their supply and contracting chains.  Human trafficking has been a high-profile issue in government contracting in recent years, drawing attention from Congress, President Obama, and groups such as the American Civil Liberties Union.  It is estimated that forced labor in the private economy generates $150 billion in illegal profits each year.

With today’s far-reaching supply chains, and increasing numbers of businesses obtaining their goods from “high risk” countries, the importance and impact of human trafficking laws will only continue to grow.

The new rule amends the FAR to codify trafficking-related prohibitions involving federal contracts, including new compliance and certification requirements, and puts contractors on the hook for disclosing violations to the government.  The new rule requires contractors to:

  • Develop and maintain a detailed compliance plan for contracts for supplies (other than commercially available off the shelf items) acquired outside the U.S., or services to be performed outside the U.S., with an estimated value exceeding $500,000;
  • Ensure that recruiters adhere to local labor laws;
  • Cooperate with, and provide access to, enforcement agencies investigating compliance with anti-trafficking and forced labor laws;
  • Ensure that workers are not being charged recruitment fees, which are common in many foreign countries;
  • Notify agents and employees of the anti-trafficking policy;
  • Provide return transportation for qualified workers;
  • Disclose (or self-report) that an employee, subcontractor, or subcontractor’s employee is violating the rule; and
  • Annually certify that, (1) it has implemented a compliance plan, and (2) after a due diligence inquiry, there are no violations by the prime contractor, its subcontractors or agents, or, if such a violation exists, it has taken remedial action.

The new rule also prohibits contractors from confiscating passports or other immigration documents, using deceptive recruitment practices, and providing housing that fails to meet local housing and safety standards. Tag or word cloud human trafficking awareness day related

These changes will have an immediate and significant impact on federal contractors.  Most significant is the thorny position contractors are placed in by having to perform due diligence on their subcontractors (at every tier), and then continuing to monitor them for violations.  This is particularly difficult, as trafficking activity is notoriously hard to detect.  Adding to concerns is that ambiguity in the rule makes adherence more of an art than a science.  Particularly, regarding compliance plans, the plan must be “appropriate” for the “size and complexity of the contract and to the nature and scope of the activities performed, including the risk that the contract will involve services or supplies susceptible to trafficking.”  However, the rule provides contractors with little guidance as to what an “appropriate” plan should look like.  Further, what is considered “appropriate” may vary widely across various federal agencies.

Finally, and obviously, all of this will come at an additional cost to contractors, many of whom will now be forced to play catch-up to ensure they are in compliance, or risk severe penalties including debarment, as well as criminal and civil sanctions.  Given the uncertainties and costs of compliance, and severe penalties for non-compliance, it is imperative that government contractors fully appreciate and understand the import of this new rule and its requirements, and take appropriate steps to ensure compliance.

In a related effort to strengthen human trafficking protections, the House Foreign Affairs Committee approved a bill last Friday that would provide for a definition of the prohibited recruitment fees.  Under the Trafficking Prevention in Foreign Affairs Contracting Act, H.R. 400, the secretary of state and the administrator of the U.S. Agency for International Development would be required to submit reports defining what constitutes a recruitment fee in order to promote better compliance with federal anti-trafficking law.

Please let us know if you have any questions or concerns.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Robert G. Ruggieri is a Senior Associate in the firm’s Federal Contracting Practice Group. He practices law in the areas of government contracts, procurement, and construction.

Vector podcast concept in flat styleRecently, Maria Panichelli was interviewed by Raymond Thibodeaux from AOC Key Solutions for a podcast entitled “Guilty by Affiliation.”  During this podcast, Maria and Ray spoke about a variety of affiliation-related issues. Topics covered included the various types of affiliation, the consequences of being deemed “affiliated” with another business, and, perhaps most importantly, how to avoid a finding of “affiliation.”  James McCarthy was also interviewed. Catch the whole podcast here.

Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.