Gordon & Rees Government Contracts Practice Group - October 2023 Update

October 2023

Gordon & Rees is excited to announce the latest update from the firm's Government Contracts practice group, bringing you an overview of recent notable decisions, rule updates, amendments, and other critical information related to contracting with the U.S. Government. Our team has compiled the most pertinent legal developments in the ever-evolving landscape of government contracts to keep you informed. In this update, you will find insights into key legal decisions, regulatory changes, and practical guidance to successfully navigate the complexities of government contracting.

Recent Cases:

The CENTECH GROUP, Inc. v. United States, 167 Fed.Cl. 1 (2023):

  • Ruling: prime contractor’s independent breach of subcontract was not an available defense to U.S Air Force ("USAF") in defeating pass-through Contracts Disputes Act claim.
  • Summary: Prime contractor-plaintiff asserted a pass-through claim against the United States under the Contract Disputes Act (“CDA”) for nonpayment of materials furnished by its subcontractor.  The USAF ordered the goods, but later refused to tender payment. The USAF argued the the plaintiff did not suffer a cognizable injury since it also did not pay for the goods, and, therefore, could not assert a CDA claim. Specifically, the USAF argued that the plaintiff’s decision to refuse payment was independent of its own decision regarding the same goods. The U.S. Court of Federal Claims determined that the plaintiff had legal standing to assert its claims against the United States for breach of contract and breach of the implied duty of good faith and fair dealing. Specifically, the court agreed with the plaintiff’s argument because “[a] contractor may bring a subcontractor’s claim against the United States as a pass-through, or sponsored, claim only when the contractor is liable to the subcontractor for its damages.”

Consolidated Safety Services, Inc. v. United States, No. 23-521C, 2023 WL 6173385, (Fed. Cl. Sept. 22, 2023):

  • Ruling: Agency’s North American Industrial Classification System (“NAICS”) code selection held as improper based on the nature of the contemplated contractual work.
  • Summary: This case involves a pre-award bid protest concerning the government’s improper assignment of a NAICS code for a procurement. The Office of Hearing and Appeals’ (“OHA”) designation effectively barred the contractor-plaintiff’s eligibility to compete for a $72 million contract. The U.S. Court of Federal Claims ultimately ruled in favor of the plaintiff, finding the government's NAICS code selection to be arbitrary and not in accordance with the law. The court provided two main reasons for its ruling: first, that OHA’s designation ignored tasks that naturally fit a different NAICS code designation, and second, that OHA and failed to explain how the chosen NAICS code, best described the contemplated work.

Forthcoming Agency Rules:

General Services Administration Acquisition Regulation; Streamline GSA Commercial Contract Clause Requirements

  • On October 12, 2023, The General Services Administration (“GSA”) will be implementing a rule amending the General Services Administration Acquisition Regulation ("GSAR") to enhance efficiency and clarity by streamlining, reorganizing, and eliminating outdated and redundant clauses. The changes focus on three key areas: reorganizing commercial clauses and related sections, relocating a Federal Supply Schedule clause, and making editorial refinements.
  • This final rule simplifies the process for GSA contracting officers, enabling them to efficiently identify and apply relevant clauses for procuring commercial products and services while reducing redundancy and saving time.

Proposed Agency Rules:

Department of Labor Acquisition Regulation: Department of Labor Acquisition Regulation System

  • The Department of Labor ("DOL") is undertaking a comprehensive update of the Department of Labor Acquisition Regulations (“DOLAR”). This revision is designed to align DOLAR with other federal legislation, including the Federal Acquisition Reform Act and the Federal Acquisition Streamlining Act. The proposed changes include removing internal DOL policies and procedures, eliminating redundant sections that duplicate the Federal Acquisition Regulations (“FAR”), and renaming and renumbering sections for clarity and streamlining. Additionally, the proposal introduces new contract clauses into DOLAR, codifies existing clauses used in DOL contracts, and revises a Section 508 Requirements clause for alignment with FAR provisions.
  • Deadline for Comments: November 6, 2023.Comments may be submitted via the electronic Federal Docket Management System at www.regulations.gov.

Information Collection; Certain Federal Acquisition Regulation Part 28 Requirements

  • The Department of Defense (“DoD”), GSA, and NASA are seeking public input on proposed changes to specific FAR Part 28 provisions. The agencies want to ensure that the collected information remains essential for effective government acquisitions, is practically useful, and has accurate burden estimates. They also aim to enhance the quality and clarity of the collected data while minimizing the burden on respondents through modern technology.
  • Deadline for Comments: November 20, 2023.  Comments may be submitted via www.regulations.gov. 

Gordon & Rees Government Contracts Practice Group

Gordon & Rees’ government contracts team has considerable experience defending and enforcing the rights of our contractor clients in disputes against government entities and private businesses. In addition to litigating claims in state and federal courts, we routinely handle matters before administrative tribunals, such as the Government Accountability Office, the Small Business Administration, and the Armed Services Board of Contract Appeals. 

Our team of attorneys is located throughout the United States, which allows the firm to represent contractors, regardless of size, and in a wide variety of industries, including defense, information technology, construction, and aerospace, among others.  Please feel free to reach out to the authors with any questions.  Gordon & Rees would like to acknowledge the significant contributions to this update by Quyen Dang.

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