Government Contracts Legal Round-Up | 2023 Issue 9
Welcome to Jenner & Block’s Government Contracts Legal Round‑Up, a biweekly update on important government contracts developments. This update offers brief summaries of key developments for government contracts legal, compliance, contracting, and business executives. Please contact any of the professionals at the bottom of the update for further information on any of these topics.
Biden Administration Ends Contractor COVID-19 Vaccine Mandate
On May 9, 2023, President Biden issued an executive order revoking his prior executive orders requiring vaccination of federal employees (EO 14043) and requiring federal contractors to follow the COVID-19 safety protocols issued by the Safer Federal Workforce Taskforce, including what became known as the contractor vaccine mandate, as of May 12, 2023.
The new executive order:
- recounts the circumstances during which the two prior executive orders were issued: the advent of the Delta variant and a rise in cases and hospitalizations;
- states that the two prior executive orders “were necessary to protect the health and safety of critical workforces serving the American people and to advance the efficiency of government services during the COVID-19 pandemic;”
- cites broad success in its vaccination program and critical investments in tests and therapeutics; and
- concludes that “considering this progress, and based on the latest guidance from our public health experts, we no longer need a Government-wide vaccination requirement for Federal employees or federally specified safety protocols for Federal contractors.”
The Safer Federal Workforce Taskforce website reflects this revocation. It requires agencies to promptly rescind any policies, guidance, or deviations based on the executive orders and provides that “the Federal Government will not take any steps to require covered contractors and subcontractors to come into compliance with previously issued Task Force guidance implementing Executive Order 14042 and will not enforce any existing contract clauses implementing Executive Order 14042.”
After much uncertainty, pain for contractors, and litigation, the contractor COVID-19 vaccine mandate has met its end in a relatively quiet fashion.
NIST Revises Cybersecurity Standards
On May 10, 2023, the National Institute of Standards and Technology (NIST) issued a third draft revision to the foundational cybersecurity standard SP 800-171, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations.
- Draft revision 3 follows a pre-draft call for comments issued in July 2022 and a public comment period. Explaining the need for an update, NIST noted that SP 800-171 was published in June 2015 with only minor updates in December 2016 and February 2020. Since then, there have been “significant changes in the cybersecurity threats, vulnerabilities, capabilities, technologies, and resources that impact the protection of [Controlled Unclassified Information].”
- The draft publication includes updates to align SP 800-171 with SP 800-53 revision 5 and SP 800-53B moderate control baseline.
- Significantly, the draft revision updates the controls by increasing the “specificity of security requirements to remove ambiguity, improve the effectiveness of implementation, and clarify the scope of assessments.” The draft revision also removes outdated and redundant controls, and withdraws certain requirements that were incorporated into others. The total number of requirements remains the same at 110.
- NIST will host a webinar on June 6, 2023, to provide an overview of the changes, and a public comment period is open through July 14, 2023.
For most government contractors, implementing the NIST SP 800-171 controls represents an important compliance area with increasing implications ranging from allegations of False Claims Act violations to eligibility to compete in procurements. Contractors should scrutinize the proposed changes in this latest draft revision and ensure that their systems are prepared to comply with these updated requirements.
Office of Federal Contract Compliance Programs (OFCCP) Issues New Voluntary Self-Identification of Disability Form
On April 25, 2023, OFCCP issued a new Voluntary Self-Identification of Disability Form (CC-305), which updated “the preferred language for disabilities and [included] additional examples of disabilities.” The deadline for contractor adoption of this new form is July 25, 2023.
Federal Circuit Reconsiders CDA Jurisdiction
ECC International Constructor, LLC v. Secretary of the Army, Fed. Cir. Nos. 22-1368, 21-2323 (Argued May 5, 2023, recordings available here)
- A Federal Circuit panel’s questions during oral argument suggest the court is actively reconsidering whether the notorious “sum certain” rule qualifies as a jurisdictional prerequisite to litigation under the Contract Disputes Act (CDA).
- The CDA does not even mention “sum certain,” yet the Federal Circuit has long held that a claim for monetary relief must state a sum to perfect jurisdiction for CDA litigation.
- During argument, the panel appeared to recognize that a recent line of Supreme Court precedent admonishes lower courts for imposing jurisdictional requirements beyond those that are clearly imposed by Congress itself. The panel included Federal Circuit Judges Prost, Linn, and Cunningham.
Eliminating the jurisdictional requirement for a sum certain would be the Federal Circuit’s second critical step toward correcting the jurisdictional rules applicable to CDA litigation. The first step occurred in 2014, when the court confirmed that the CDA’s six year statute of limitations could no longer qualify as a jurisdictional rule, permitting parties to toll the statute of limitations. Special Counsel Nathan Castellano has published several articles arguing that, in light of the latest Supreme Court precedent, the CDA’s claim submission, certification, and timely appeal requirements do not qualify as jurisdictional rules.
Midatlantic Constr. & Design Assocs., Inc. v. United States, No. 22-447C, 2023 WL 3269668 (May 5, 2023)
- Judge Bonilla of the Court of Federal Claims issued a decision denying the government’s motion to dismiss for lack of subject matter jurisdiction, where the contractor challenged the Defense Logistics Agency’s (DLA) refusal to issue a final decision on a Contract Disputes Act (CDA) claim.
- The contractor submitted a request for equitable adjustment (REA) and a revised REA for unabsorbed corporate overhead costs caused by changes and delays experienced while performing under the contract. However, after a certain point, DLA refused to grant the contractor’s request and refused to issue a final decision on the matter. The contractor appealed to the Court of Federal Claims.
- At the heart of DLA’s motion to dismiss, DLA argued that the contractor failed to timely submit a duly certified claim to the contracting officer under the CDA.
- When denying the government’s motion to dismiss, Judge Bonilla emphasized that the Federal Circuit in Sikorsky Aircraft Corp. v. United States, held that the six-year statute of limitations for contractors to file a certified claim under § 7103 is not jurisdictional.
Aptim-Amentum Alaska Decommissioning, LLC, B-420993.3 (Apr. 26, 2023) (published May 9, 2023)
- GAO sustained in part a protest where the awardee’s proposal failed to meet a material requirement of the solicitation.
- The Army Corps of Engineers issued a solicitation for the decommissioning of a nuclear reactor facility in Ft. Greely, Alaska.
- GAO agreed with the protester that, under the management approach factor, the awardee entirely failed to submit a key personnel retention plan, a solicitation requirement that GAO found to be material.
- The fact that the awardee had also submitted letters of commitment for key personnel was immaterial; the requirement to submit a key personnel retention plan was distinct.
When a proposal fails to meet a material requirement of the solicitation, the proposal is technically unacceptable and cannot serve as the basis for the award of a contract. Here, GAO sustained the protest and recommended that the agency either eliminate the awardee from the competition or solicit and evaluate revised proposals and issue a new source selection decision.
TechSynap Corp. v. United States, Fed. Cl. No. 23-36C (Published May 8, 2023)
- While the Court of Federal Claims typically decides protests based upon the existing administrative record, occasionally discovery will be permitted if necessary to adjudicate the protest.
- Here, the protester alleged that the awardee materially misrepresented that their proposed Program Manager—a key position—ever intended to perform on the contract. Following the submission of dueling declarations, the Court was faced with categorically conflicting statements regarding whether or not the awardee offered the job to the outgoing Program Manager. The protester moved to supplement the administrative record and to conduct limited discovery.
- Chief Judge Kaplan granted the motion, allowing the protester to depose three witnesses. In the context of a material misrepresentation claim, where “it is unlikely (at best) that an administrative record will ever include the evidence a court would need to determine whether a statement made in a successful proposal was false,” the decision reflects that given the “stark divide” between the assertions of the outgoing Program Manager and the awardee’s categorical denial, depositions were “appropriate to determine whether or how the apparent conflict can be reconciled.”
Supplementing the administrative record is worth pursuing in cases where the existing record is incapable of providing the evidence needed to decide a protest on the merits. A material misrepresentation claim is a prime candidate for such discovery.