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CORPORATE & ORGANIZATIONAL GOVERNANCE
The Corporate Transparency Act: Updates, Requirements, and Enforcement for Small Businesses, PilieroMazza Client Alert, Isaias “Cy” Alba, IV, Abigail “Abby” L. Baker, Paul H. Tracy
The Corporate Transparency Act (CTA) has been a hot topic for small business owners since its inception. As we approach its effective date on January 1, 2024, it’s crucial to understand CTA’s implications for small businesses. Attorneys in PilieroMazza’s Business & Transactions Group offer guidance to small business owners and their senior officers on CTA compliance and potential criminal and monetary penalties for failure to report information required by the CTA. Read more here.
Understanding the Corporate Transparency Act: Implications and Compliance Strategies,” PilieroMazza Webinar Replay, Isaias “Cy” Alba, IV, Paul H. Tracy. Click here to view the recorded session.
FinCEN Head Vows No ‘Gotcha’ Enforcement of New Rules, Law360
The director of the U.S. Treasury Department’s Financial Crimes Enforcement Network said during a Wednesday congressional hearing that the agency is not pursuing “gotcha” enforcement when it comes to companies complying with new rules for reporting their beneficial ownership information. Read more here (subscription required).
Small Business Administration (SBA) Final Rule: Small Business Size Standards, Adjustment of Alternative Size Standard for SBA’s 7(a) and CDC/504 Loan Programs for Inflation; and Surety Bond Limits, Adjustments for Inflation
On February 15, SBA published a Final Rule finalizing, without change, SBA’s July 28, 2023, proposed rule to adopt the current statutory alternative size standard for its 7(a) Business and Certified Development Company (CDC/504) Loan Programs (collectively “Business Loan Programs”), subject to a 34.46 percent adjustment for inflation that has occurred since the establishment of the statutory alternative size standard in 2010. The inflation adjustment would increase the size standard’s level for tangible net worth to $20 million and for net income to $6.5 million. SBA also is adjusting for inflation the applicable statutory limits for contract size under the Surety Bond Guarantee (SBG) Program. The adjustment increases the contract limit to $9 million and the contract limit for federal contracts if a federal contracting officer certifies that such a guarantee is necessary to $14 million. The Final Rule is available here and will be effective March 18, 2024.
General Services Administration (GSA) Final Rule: GSA Acquisition Regulation (GSAR), Removing Small Disadvantaged Business Program Requirements to Align with the FAR
On February 15, GSA published a Final Rule amending the GSAR to remove Small Disadvantaged Business Program requirements references to align with the Federal Acquisition Regulation (FAR) for consistency. GSAR subpart 519.12 is removed and reserved for future use. All mentions of GSAR subpart 519.12 are also removed, as well as corresponding mentions to FAR subpart 19.12 and corresponding clauses, which were removed from the FAR. The Final Rule is available here and is effective as of February 15, 2024.
Department of Defense (DOD) Final Rule: Defense Federal Acquisition Regulation Supplement (DFARS), Buy American Act Requirements
On February 15, DOD published a Final Rule amending the DFARS to implement Executive Order 14005 addressing a series of actions to enable the government to maximize the use of goods, products, and materials produced in the U.S. in order to strengthen and diversify domestic supplier bases and create new opportunities for U.S. firms and workers. The Final Rule is available here and is effective as of February 15, 2024.
Small Business Administration (SBA) Press Release: SBA Administrator Guzman Announces Important SBIC Program Milestones at White House Convening of Investment Industry Leaders
On February 14, SBA Administrator Isabel Casillas Guzman led a White House convening with National Economic Council Director Lael Brainard to announce progress in expanding access to private equity and debt capital for more small businesses and innovative startups as a result of regulatory reforms to the SBA’s $42 billion Small Business Investment Company (SBIC) Program. Read more here.
Department of Defense (DOD) Proposed Rule: Defense Federal Acquisition Regulation Supplement (DFARS), Assuring Integrity of Overseas Fuel Supplies
On February 15, DOD published a Proposed Rule amending the DFARS to implement a section of the National Defense Authorization Act for Fiscal Year 2022 that requires offerors to certify that they will not provide fuel from a prohibited source and that they will comply with certain export control and anticorruption regulations and statutes for contracts awarded for the acquisition of fuel in support of overseas contingency operations. The Proposed Rule is available here. Comments close April 15, 2024.
Department of Transportation (DOT) Notice: Award Management Requirements Circular Proposed Updates
On February 14, DOT’s Federal Transit Administration (FTA) published a Notice and request for comments about proposed updates to FTA’s Award Management Requirements circular (C 5010.1). The proposed updates combine requirements applicable to all FTA financial assistance awards (referred to as “cross-cutting” requirements) and, when final, will supersede parts of three separate FTA circulars (the proposed “Grant Programs for Urbanized Areas”, “Formula Grants for Rural Areas” (C 9040.1G), and “Enhanced Mobility of Seniors and Individuals with Disabilities” (C 9070.1G)). The proposed updates also reflect changes made by the Fixing America’s Surface Transportation (FAST) Act; the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL)); the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; and other updates to FTA policies and procedures. The Notice is available here. Comments close April 15, 2024.
White House Launches Federal Spending Inventory, Government Executive
On February 15, the White House launched a new, searchable federal spending inventory. The Federal Program Inventory pulls from existing government data sources like SAM.gov and USASpending.gov and allows visitors to explore federal financial assistance programs across categories, agencies, eligible applicants, and more. Read more here.
Upcoming Government Contracts Presentations
WEBINAR: Past Performance: How to Use Yours, Benefit from Others’, and Defend It from Attacks, February 22, 2024, Samuel S. Finnerty, Daniel Figuenick, III. Read more here.
CONFERENCE: Empowering Small Business Panel, February 29, 2024, Jon Williams. Read more here.
WEBINAR: Joint Venture and Mentor-Protege Bidding Strategies, February 29, 2024, Peter B. Ford, Meghan F. Leemon. Read more here.
CONFERENCE: Strategic Moves: Key Tactics for Seamless 8(a) M&A Transactions, Abigail “Abby” L. Baker, Isaias “Cy” Alba, IV, March 11, 2024. Read more here.
WEBINAR: Legal Strategies & Capture Planning, Isaias “Cy” Alba, IV, March 15, 2024. Read more here.
TRAINING: Legal Considerations When Supporting OCONUS Contracts, Isaias “Cy” Alba, IV, March 19, 2024. Read more here.
WEBINAR: Mergers & Acquisitions in Government Contracting: Novations and Recertification, Abigail “Abby” L. Baker, Cole R. Fox, March 20, 2024. Read more here.
WEBINAR: FAR Part 17: Special Contracting Methods, Isaias “Cy” Alba, IV, March 22, 2024. Read more here.
WEBINAR: Unlocking the Secrets of Debriefings, Government Evaluation of Proposals and Protests, Katherine B. Burrows, Eric Valle, March 28, 2024. Read more here.
FALSE CLAIMS ACT / AUDITS & INVESTIGATIONS / LITIGATION & DISPUTE RESOLUTION
Turning $1.6 Million Into $53 Million: Key Takeaways from Eyebrow-Raising FCA Ruling, PilieroMazza Blog, Matthew E. Feinberg
On January 20, 2023, the U.S. District Court for the District of Columbia entered a judgment in the amount of $1,679,450.16 in favor of the U.S. (the government ) in a False Claims Act (FCA) litigation against Gen Digital, Inc. (formerly known as Symantec Corporation and NortonLifeLock Inc.). Although any adverse judgment in an FCA matter might be seen as a disappointment, the government requested a total judgment in the case of over $1 Billion. Accordingly, the defendants could treat a judgment for less than two-thousandths of the government’s request to be a substantial success. However, the government moved to amend the judgment, claiming the Court miscalculated the damages. Almost a year later, the Court granted the motion and increased the judgment in favor of the government to approximately $53 Million, a shocking turn of events that left the government contracting community wondering how such a drastic adjustment was even possible. Although the Court’s increase in the damages amount raised eyebrows, government contractors should be aware of important takeaways to help avoid a similar decision impacting their FCA cases. Read more here.
Government Accountability Office (GAO) Report: Whistleblowers: Disclosures and Retaliation Complaints to Pandemic Auditors
On February 13, GAO released a report explaining how federal entities handle tips from whistleblowers. federal law protects people who work for federal contractors from being fired or retaliated against for blowing the whistle on fraudulent or illegal activity. The law also covers people who work for organizations that receive federal grant money. The full report is available here.
Department of Defense (DOD) Office of Inspector General (OIG) Report: Audit of the DOD’s Oversight of Cost-Plus-Award-Fee (CPAF) Contracts
On February 14, DOD’s OIG issued a report to determine whether DOD contracting officials oversaw contractor performance and justified award fees paid for CPAF contract actions per federal and DOD policies. DOD contracting officials generally provided effective oversight of the contractors’ performance and justified award fees paid. However, Army and Air Force officials did not properly justify award fees paid for three contracts because they did not have adequate controls to ensure that contracting officials followed criteria about the calculation and justification of award fees. As a result, the officials made overpayment. DOD contracting officials did not follow federal and DOD policies when performing contract administration and management for 78% of contracts reviewed because the Military Departments and Defense agencies did not have adequate controls to ensure that contracting officials followed criteria related to the administration and management of CPAF contracts. As a result, the Military Departments and Defense agencies increased the risk that contractors were not properly incentivized. DOD did not accurately account for the universe of CPAF contracts and award fees paid to contractors because the Defense Pricing and Contracting did not establish and implement a DOD-wide solution to capture CPAF contract data. As a result, reports supporting the quantity and dollar values associated with DOD CPAF contracts were not reliable, and the DOD was unable to make informed decisions on the effectiveness of CPAF contracts.
Department of Labor (DOL) News Release: DOL releases Updated Equity Action Plan, Part of Biden-Harris Administration Commitment to Advance Equity, Economic Justice
On February 14, as part of the Biden-Harris administration’s whole-of-government equity agenda, DOL released its updated Equity Action Plan to support the administration’s advancement of racial equity through executive orders and other federal mechanisms. Read more here.
General Services Administration (GSA) Blog: Redoubling Our Commitment to Empowering Communities by Advancing Equity
On February 14, GSA published a blog affirming its commitment to upholding trust in how it delivers for its customers through the updated Equity Action Plan. The plan responds to the Biden-Harris Administration’s whole-of-government charge to further advance equity, reduce administrative burdens, and expand access to opportunity. Read more here.
Federal Labor Relations Authority (FLRA) Final Rule: Changes in Filing Addresses and Procedures
On February 15, FLRA published a Final Rule to eliminate the requirement that parties file four copies of original documents that they file with: the FLRA’s three-member, decisional component (the Authority); the Office of General Counsel; and the FLRA’s Administrative Law Judges, Regional Directors, and Hearing Officers. The Final Rule is available here and will be effective March 1, 2024.
General Services Administration (GSA) Notice: FFATA Subaward and Executive Compensation Reporting Requirements
On February 14, GSA published a Notice and request for comments about the Federal Funding Accountability and Transparency Act which requires information disclosure of entities receiving federal financial assistance through federal awards such as federal contracts, sub-contracts, grants, and sub-grants. Beginning October 1, 2010, the currently approved Paperwork Reduction Act submission directed compliance with the Transparency Act to report prime and first-tier subaward data. Specifically, federal agencies and prime awardees of grants were to ensure disclosure of executive compensation of both prime and subawardees and subaward data per the Transparency Act. This information collection requires reporting of only the information enumerated under the Transparency Act. The Notice is available here. Comments close April 15, 2024.
Department of Labor (DOL) News Release: DOL announces Employee Benefits Security Administration (EBSA) Recovered Over $1.4B for Workers, Families, Benefit Plans
On February 13, EBSA published an overview of its enforcement activities in fiscal year 2023 in a new fact sheet. The fact sheet provides details about the recovery of workers’ benefits through various enforcement, outreach and assistance programs, including the voluntary fiduciary correction program, the abandoned plan program and monetary recoveries from informal complaint resolutions through EBSA’s benefits advisors. A total of $1.4B was recovered for workers in fiscal year 2023, with more than half resulting from the agency’s enforcement actions. Read more here.
OPM’s 2024 equity goals aim to expand data-based approach, Government Executive
On February 14, the Office of Personnel Management (OPM) announced plans to expand the use of data to analyze recruitment barriers for underserved communities as well as outreach at minority-serving educational institutions in the coming year. Read more here.
Upcoming Labor & Employment Presentations
WEBINAR: Nuts and Bolts of the SCA, February 26, 2024, Nichole D. Atallah, Sarah L. Nash. Read more here.
CONFERENCE: From Compliance to Competitiveness: Revamped DBA Rule Reshapes Labor Landscape for Construction Contractors, Nichole D. Atallah, Sarah L. Nash, March 11, 2024. Read more here.
CONFERENCE: Panel: A Focus on Legal Policy, Nichole D. Atallah, March 14, 2024. Read more here.
PM WEBINAR: New Wave of Pay Transparency Requirements Affects Employers and Federal Contractors, Sarah L. Nash, Sara N. Strosser, April 4, 2024. Read more here.
PRIVATE EQUITY & VENTURE CAPITAL
Securities and Exchange Commission (SEC) Press Release: SEC Proposes Rule to Update Definition of Qualifying Venture Capital Funds
The proposal would adjust the dollar threshold to be considered a qualifying venture capital fund. The proposed rule would update the dollar threshold for a fund to qualify as a “qualifying venture capital fund” for purposes of the Investment Company Act of 1940 (Act). The rule would update the dollar threshold to $12 million aggregate capital contributions and uncalled committed capital, up from the current standard of $10 million. Read more here.
INTELLECTUAL PROPERTY & TECHNOLOGY RIGHTS
Department of Defense (DOD) Proposed Rule: Defense Federal Acquisition Regulation Supplement (DFARS), Use of DOD Program Nomenclature
On February 15, DOD published a Proposed Rule amending the DFARS to introduce coverage of trademarks and similar designations, such as popular names and program names. In addition to the request for written comments on this proposed rule, DOD will hold a public meeting to hear the views of interested parties. The Proposed Rule is available here. Comments close April 15, 2024.
DOD CIO Releases Cyber Standards Guide for International Allies, MeriTalk
Department of Defense (DOD) Chief Information Officer (CIO) John Sherman has released new cybersecurity guidance on information sharing, best practices, and training for international partners looking to develop their cybersecurity standards and procedures. Read more here.
GSA Probed for Buying Banned Chinese Conferencing Cams, Law360
The House Oversight Committee’s Subcommittee on Cybersecurity, Information Technology, and Government Innovation is probing the General Services Administration’s purchase of videoconference cameras made in China following a recent report by the GSA’s internal watchdog the subcommittee said raised alarming questions. Read more here (subscription required).