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December 2024: Reducing the Negative Impacts of a Government Shutdown for Federal Contractors, PilieroMazza Client Alert, Isaias “Cy” Alba, IV, Nichole D. Atallah, Lauren Brier, Abigail “Abby” Finan
Once again, the specter of a government shutdown looms over the federal contracting community. The federal government is set to run out of funding on December 20 due to an impasse during final negotiations over added spending. The expected timeline for renegotiations is making it ever more likely that a protracted shutdown of over a month will occur. Below are key steps your business should take to mitigate the possible negative impacts of a government shutdown, along with shutdown-related labor and employment considerations for government contractors. Read more here.
SBA’s Final Rule Is Here: Key Takeaways on Updates to HUBZone Program, Other Small Business Programs, and Various Small Business Matters, PilieroMazza Client Alert, Meghan F. Leemon
On December 17, 2024, the Small Business Administration (SBA) published a final rule that will make changes to its regulations for the Historically Underutilized Business Zone (HUBZone) Program, clarifying certain policies. PilieroMazza recently covered the proposed changes (linked here), which impact not just the HUBZone Program. This final rule goes into effect on January 16, 2025, “will apply to existing contracts,” and makes several amendments impacting all GovCon small businesses. Read more here.
SBA Update: Final Rule Appears Beneficial for IT Value-Added Resellers, PilieroMazza Client Alert, Jon Williams
As PilieroMazza covered here on December 17, 2024, SBA issued its much-anticipated final rule in response to the proposed rule it issued in August and the hundreds of public comments it received. One area of particular interest for IT value-added resellers (ITVARs) is how SBA finalized its proposed rule pertaining to the use of tax returns to determine a firm’s annual revenue for small business purposes. At first blush, we think the final rule—which will take effect on January 17, 2025—is good news for ITVARs. Read more here.
FY25 NDAA Update: Potential Costly Changes Ahead for Bid Protests, PilieroMazza Blog, Isaias “Cy” Alba, IV, Lauren Brier, Abigail “Abby” Finan
The Senate approved the Fiscal Year 2025 National Defense Authorization Act (FY25 NDAA) on December 18, 2024. The bill is now on its way to the President’s desk for signature. Of particular note to federal defense contractors is Section 885, “Proposal for Payment of Costs for Certain Government Accountability Office Bid Protests.” Section 885 raises the task and delivery order bid protest jurisdictional threshold under 10 U.S.C. § 3406(f)(1)(B) from $25 Million to $35 Million for DOD orders. Additionally, Section 885 establishes a requirement for GAO and DOD to submit a pilot program proposal to Congress within 180 days of the FY25 NDAA’s enactment. The proposal is required to address enhanced pleading standards and a process for an unsuccessful bid protestor to pay DOD its litigation costs and the awardee for lost profits. Section 885 is silent on the pilot program’s application to small businesses, though that does not mean that GAO and DOD can’t delineate between large and small businesses in its proposal. Read more here.
Small-Business Owners Say They Were Mistakenly Accused of Defaulting on Federal COVID Loans, NBC News
Experts say the Small Business Administration is struggling under the weight of a surge in loans—and customers are paying the price. The spike in new loans exposed several operational weaknesses, according to outside reviews. A 2021 Government Accountability Office report found the SBA’s communications often failed to provide key information to applicants. An October 2024 Inspector General’s report said the SBA “has not had effective IT management policies and procedures for several years.” Read more here.
House Tees Up Defense Bill, But Hurdles Remain, The Hill
The House voted to advance the more than 1,800-page NDAA along party lines, 211-207, teeing up a final vote. But the NDAA faces a major roadblock once it hits the House floor, with Democrats objecting to an amendment that restricts gender-affirming care for the children of servicemembers if it results in “sterilization.” Read more here.
BGOV Bill Analysis: Fiscal 2025 Defense Authorization Agreement, Bloomberg Government
Defense programs at the Pentagon, Energy Department, and other agencies would be authorized to receive $883.7 billion under an amendment to H.R. 5009, the compromise fiscal 2025 National Defense Authorization Act. Read more here (subscription required).
Upcoming Government Contract Presentations
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, January 9, 2025, Katherine B. Burrows, Eric Valle
TRAINING: Joint Ventures – A Roadmap for Small Business Government Contractors, January 15, 2025, Meghan F. Leemon, Aaron A. Kor
SEMINAR: Nuts, Bolts, and Beyond: To Be a Government Contractor, January 28, 2025, Eric Valle
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, February 5, 2025, Aaron A. Kor, Eric Valle
TRAINING: Joint Venture and Mentor-Protege Bidding Strategies, February 6, 2025, Peter B. Ford, Meghan F. Leemon
CONFERENCE: Subcontracting Essentials for 8(a) Contractors, February 12, 2025, Isaias “Cy” Alba, IV, Nichole D. Atallah, Meghan F. Leemon
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, March 6, 2025, Katherine B. Burrows, Eric Valle
TRAINING: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, March 13, 2025, Katherine B. Burrows, Eric Valle
BUSINESS & TRANSACTIONS / CORPORATE & ORGANIZATIONAL GOVERNANCE / GOVERNMENT CONTRACTS
Corporate Transparency Act, Part 5: Voluntary Reporting, PilieroMazza Client Alert, Meghan F. Leemon, Abigail “Abby” L. Baker, Cole R. Fox
In this fifth installment of PilieroMazza’s series on the reporting requirements associated with the Corporate Transparency Act (CTA) (see links to Part 1, Part 2, Part 3, and Part 4), we discuss the nationwide preliminary injunction halting enforcement of the CTA. While reporting companies formed prior to January 1, 2024, need not comply with the CTA’s January 1, 2025, Beneficial Ownership Information Report (BOIR) filing deadline, and reporting companies formed in 2024 similarly need not comply with the CTA’s ninety (90) day BOIR filing deadline, they may want to consider voluntary reporting. Read more here.
Seldom-Discussed CMMC Effects on a Defense Contractor’s Business, PilieroMazza Client Alert, Isaias “Cy” Alba, IV, Daniel Figuenick, III, Joseph P. Loman
The Department of Defense (DOD) has finally promulgated its Final Rule (Rule) implementing the Cybersecurity Maturity Model Certification (CMMC) program, which goes ‘live’ on December 16th. There is plenty of content summarizing what the Rule is. Here, PilieroMazza attorneys offer their opinions on some of the practical effects, consequences, and strategies federal contractors can take away from the Rule and the DOD’s commentary. This blog touches on potential protest arguments flowing from the Rule, the Rule’s effect on small businesses and joint ventures, False Claims Act liability, and considerations for companies planning a future merger or acquisition (M&A). Read more here.
DC Circ. Upholds TikTok Sale-Or-Ban Law, Law360
A DC Circuit panel on Friday upheld a federal law giving TikTok until January to cut ties with its Chinese parent company or face a ban in the U.S., ruling that the statute survives constitutional scrutiny. Read more here (subscription required).
NDAA to Give DOD Components More Flexibility to Procure Cyber Products, Federal News Network
Under the House and Senate armed services committees’ compromise defense policy bill, Defense Department components would have more authority to purchase alternative cybersecurity products and services. Read more here.
Senate Bill Would Require FCC to Issue Binding Cyber Rules for Telecom Firms, NextGov/FCW
A bill introduced would direct the Federal Communications Commission to require telecom providers to adhere to a list of must-have cybersecurity compliance rules, including minimum cyber requirements and annual system testing. Read more here.
Read Before Increasing Wages! Unraveling the Minimum Wage and Salary Basis Test Mayhem, PilieroMazza Client Alert, Nichole D. Atallah, Sarah L. Nash
2024 ushered in the implementation of and challenges to several wage and hour initiatives by the Biden Administration, most notably, adjustments to the salary basis test and Executive Order 14026, which raised minimum wages for government contractors. In both cases, U.S. federal courts intervened, issuing decisions that will shape how employers approach wages in 2025 and beyond. Keep reading to find out the key points contractors need to know before January 1, 2025. Read more here.
Minimum Wage Set to Rise in 23 States Next Year as $15 an Hour, and Beyond, Picks Up Steam, USA Today
Twenty-one states and 48 cities and counties will raise their minimum wages on January 1. Other states and a few more cities and counties will raise their minimum wages later in 2025. Read more here.
House, Senate Democrats Urge Biden to Bump Civilian Federal Pay Raise Up to 4.5%, Federal News Network
With just a few weeks left in the year for President Joe Biden to finalize the 2025 federal pay raise, House and Senate Democrats are calling for a larger pay boost than the currently planned raise for civilian federal employees on the General Schedule. Lawmakers called for a 4.5% federal pay raise to align with the military’s expected 2025 raise. Currently, civilian feds are likely to get a 2% raise next year. Read more here.
Federal Telework Would be Capped Under a New House Bill, Government Executive
Rep. Andy Ogles’ Show Up To Work Act would limit telework at federal agencies to 25% per pay period and require agency heads to certify performance gains for individual waivers. Read more here.
Upcoming Labor & Employment Presentations
TRAINING: Labor Rules & Regulations: Federal Market Compliance, January 29, 2025, Nichole D. Atallah
CONFERENCE: Ins and Outs of the Service Contract Act for 8(a) Contractors, February 12, 2025, Nichole D. Atallah
TRAINING: Labor Rules & Regulations: Federal Market Compliance, February 26, 2025, Sarah L. Nash
NATIVE AMERICAN LAW & TRIBAL ADVOCACY
OHA Confirms Key Affiliation Protections for Tribal Businesses, PilieroMazza Tribal Advocate, Isaias “Cy” Alba, IV, Krissy Cralle
On November 15, the Small Business Administration’s (SBA) Office of Hearings and Appeals (OHA) affirmed the Area Office’s finding that a tribal-owned company was small due to the affiliation exceptions for tribal-owned entities[1] (the Tribal Affiliation Exception). However, the case was remanded back to the Area Office for a failure to investigate whether the tribal-owned company violated the ostensible subcontractor rule, which is not fully protected by the Tribal Affiliation Exceptions. Tribal entities and their partners should pay close attention to this development, as it affects their ability to operate and compete in federal contracting with greater flexibility. Read more here.
REAs, CLAIMS, AND APPEALS / GOVERNMENT CONTRACTS / LITIGATION & DISPUTE RESOLUTION
CBCA Releases Its 2024 Annual Report: Key Insights for Government Contractors, PilieroMazza Blog, Lauren Brier, Kelly A. Kirchgasser
The Civilian Board of Contract Appeals (CBCA) recently released its 2024 Annual Report (the Report), providing updates on personnel, decision statistics, and other important developments. The CBCA’s role in resolving disputes between government contractors and federal agencies makes the Report a valuable resource when developing strategies for filing or defending a CBCA case. In this blog, attorneys in PilieroMazza’s REAs, Claims, and Appeals Group offer key insights from the Report that could affect how contractors submit or respond to a CBCA case. Read more here.
LITIGATION & DISPUTE RESOLUTION
Department of Justice (DOJ) Final Rule: Guidelines and Limitations for Settlement Agreements Involving Payments to Non-Governmental Third Parties
On December 9, DOJ published a final rule revoking a prohibition on settlement agreement provisions that direct or provide payment or loan to non-governmental individuals or entities that are not a party to the dispute. The rule is available here and is effective upon as of December 9, 2024.