GovCon Updates of the Week Part 10

6/24/2021 - By Saltmarsh, Cleaveland & Gund

The Blacklist of Chinese Companies Keeps Growing

Government contractors may have noticed some additional questions as they’ve started the renewal process of their System for Award Management (SAM) representations and certifications. The Federal Acquisition Regulation (FAR) clause and provision 52.204-25 and -26 stipulate that contractors and potential contractors responding to government solicitations certify that they have performed a reasonable inquiry to ensure that they will not be purchasing, providing or using telecommunications equipment or services from a list of prohibited vendors.

In early June 2021, President Biden issued an executive order to expand the list of Chinese companies that American companies and individuals are prohibited from investing in or doing business with from 31 to 59 companies. Starting August 2, 2021, investors have one year to divest from those 59 companies with alleged links to Chinese military and surveillance, with the goal of ensuring that American investments are not supporting companies that compromise the security of the U.S. and its allies.

The list already included Huawei Technologies and its subsidiaries and affiliates, and now American firms are prohibited from holding investments in additional companies that provide satellite equipment, integrated circuits, optical components, and satellite communications equipment and software, in an effort to reduce cybersecurity risks and encourage American companies to invest in more companies stateside.

For more information please click this link and this link.

It’s a Good Time to be a Government Contractor

2020 will go down in the history books for a countless number of reasons. One of these reasons, however, may not be what you would expect. 2020 represented the year that the federal government spent the most on contracts, a whopping $682 billion. This represents a notable $83 billion, or 14%, increase over government fiscal year (GFY) 2019’s then record-breaking $559 billion.

Although we may assume this record spending directly relates to the unprecedented federal response to the COVID-19 pandemic, that is not the entire story. GFY 2020 saw government contract spending on medical supplies increase by 50%, but spending on aircraft, ships, submarines and combat vehicles also increased by 41%. Another area that received notable growth is technology with spending on information technology seeing a year-over-year increase of $6.8 billion. But not all sectors were big winners. Miscellaneous and sustainment supplies related to physical equipment in government offices fell by over 13% as the pandemic triggered nationwide work-from-home mandates.

As in prior years, government contracting juggernaut Lockheed Martin topped the list of contractors receiving the most funding to the tune of around $76 billion, while Raytheon, General Dynamics, Boeing and Northrop Grumman followed in the top five. Additionally, the government is doubling down on its utilization of other transaction authority purchases—those made outside the traditional Federal Acquisition Regulation (FAR) structure—by dramatically increasing spending to $18 billion.

This record may not last long, as the government is expected to continue record spending on contracts at least through GFY 2021. This is driven largely by February’s $1.9 trillion stimulus package and the GFY 2021 spending bill which topped $1.4 trillion in discretionary spending.

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It’s Not You, It’s Me - Proposed Changes to Expand Post-Award Debriefings

Breakups, job interviews and competitive solicitations … These are a few of the events in a government contractor’s life that lead individuals to look inward and try to figure out what they could have done differently to affect the outcome of a decision. While Cosmo and LinkedIn are chock full of articles to address the first two events, contractors are left with post-award debriefings and protests to ascertain what they can do differently on future proposals. Within industry, the over-arching feeling is unsuccessful offerors generally have not been getting enough information from the post-award debriefs, so they have been turning to protests to glean as much information as they can about what made them “unsuccessful.”

A proposed change to the Department of Defense Federal Acquisition Regulation Supplement (DFARS) looks to change that. Contractors have until July 19 to comment on the proposed change which piggybacks on the 2018 interim guidance that permits an enhanced debriefing, if requested. The enhanced debriefing, which grants unsuccessful offerors a two-business-day period to ask their follow-up questions and gives the government five business days to respond, provides an alternative path to protests for contractors seeking clarification.

The catch is that, just as in some breakups and job interviews, sometimes the decision-makers just don’t provide the candid feedback that contractors are seeking, no matter how the questions are asked. In those cases, a protest may still be the most effective course of action to get answers, but the intent of the proposed change is to make sure that this isn’t normal. Government contractors should consider reviewing the language and commenting, even if they’ve never been on the receiving end of a debrief that just left them with more questions, because who is to say that the outcome will always be the one that they were hoping for, or that the debriefing that they receive will be so profound, that it will forever change how they propose on future work.

For more information, please click this link and this link.