The Department of Justice’s Procurement Collusion Strike Force, formed last year to
increase contract compliance reviews, continues to expand its efforts. Any company with sizeable government
business should take notice, not just for the task force’s actions, but
for its focus on criminal prosecution under the False Claims Act. Most enforcement actions have traditionally
been undertaken by the Civil Division of DOJ.
As a result, penalties against individuals or companies caught violating
rules include fines and potential suspension or debarment. These are strong penalties in and of
themselves, but do not ultimately compare to criminal penalties that can
seriously harm a corporate reputation and land individuals in a real prison,
not just suspension and debarment jail. Attorney
Michael Volkov, writing in JD Supra, points out: “Last year, the Antitrust
Division unveiled its important compliance guidance, Evaluation of
Corporate Compliance Programs in Criminal Antitrust Investigations.
Companies involved in public procurement should adopt and implement robust
corporate compliance programs.”
It may also be a best practice to read the DOJ report to ensure that
those programs feature components recommended by the agency. Approximately one-third of the task force’s
open criminal investigations involve government procurement. Such actions
could cost contractors millions in fines, legal fees, lost business, and
damaged reputations. Compliance is
something that few people like to talk about, but it is most definitely the
“ounce of prevention” that can protect both you and your company.
GSA issued an update last week on related to its Schedules consolidation process reminding contractors that their GSA Advantage catalogs and price lists must be updated BY October 31st.
This is despite reports that some acquisition offices are already overwhelmed with consolidation and end-of-year work.
Regardless, contractors that do not update their price lists and catalogs may have their information removed from GSA websites.
an established government contractor, is approached by a new company with
a potentially great technology solution.
Does it, though, present a supply chain risk that federal customers
can’t use? You think it might
and provide a new government supply chain review board information. It turns out, though, that the company is
legit. They’re now suing you,
though, because you reported them as a potential risk. Sound like we’re jumping ahead to
Halloween? Not really. This is exactly the scenario government
contractors could find themselves in when trying to navigate the government’s
changing secure supply chain rules.
A new interim rule, created by the passage of the Federal Acquisition
Supply Chain Security Act of 2018, gives the government a variety of tools to
exclude an inappropriate company from contracting with the federal government
if there is a potential supply chain risk.
Similarly, government contractors are encouraged to share information on
potential secure supply chain risks, including information on problematic companies.
Contractors may, however, face lawsuits or other legal action if the
information doesn’t pan out. Talk about
a Catch 22. Federal contractors
have to be increasingly careful about the partners they use in their federal
supply chains, but also must take care to make judgements only on well-founded
information. Someone once said
that government business is not a “go it alone” proposition. This is indeed the case here. Make sure
your firm works with outside legal and other help to navigate these
increasingly tricky waters.
One perennial customer crack, unfair we think, against GSA is “what do
we get for our money?” when paying contract access fees. While Allen Federal believes it should be
obvious that customer agencies get a great deal from GSA in terms of vetting
contractors and establishing popular acquisition vehicles, the agency is
nevertheless adding a new feature to help its customers more easily find
contractors that meet specific needs. The
“Market Research-As-a-Service, or “MRAS”, feature will leverage existing GSA
research and analytics to assist customer agencies in developing an appropriate
acquisition approach and potential contractors that can meet their needs. MRAS personnel will help customer agencies
define and identify suppliers and contracts, research and identify supplier
capabilities, access existing market reports, and assist with a comprehensive
market plan that includes contract suggestions and socio-economics
considerations. All of these
services will be provided at no cost to GSA customer agencies. MRAS will function differently than GSA’s
fee-for-service assisted acquisition offices, which perform many of these same
functions, but also manage actual procurements.
Just as with assisted acquisition offices, though, contractors
will want to establish relationships with MRAS providers. Working with
GSA to meet customer needs is already a proven best practice. Ensuring that this office has the latest
information not only on individual company capabilities, but also on market
trends, examples of previously successful acquisition approaches and more, will
be critical to ensuring that GSA’s MRAS office has the information it needs to
be successful. Also, never forget that relationships
matter in acquisition just as much a process knowledge. Contractors should get to know MRAS just as
customer agencies will.
The FAR Council has already issued one
clarification to its initial Interim Rule prohibiting companies that do
business with the government from using covered IT and telecommunications
anywhere in their business. The new rule, published in late August,
clarifies that companies certifying that they do not use such covered
equipment must only do so on an annual basis, not in response to each
bid. More guidance is expected to
come. Contractors should not confuse
this guidance, though, with a removal of the requirement to get rid of or not acquire
covered IT and telecommunications gear from a host of Chinese companies. Companies are absolutely expected to comply
with the requirement. No Huawei,
ZTE or other related equipment can be used by companies wishing to do business
with the government, regardless of whether that equipment is used in support of
the execution of a government contract.
Be on the lookout, though, for more regulatory changes on this topic.