Georgia Tech Procurement Assistance Center

GAO says strict compliance with Buy American Act exception requirements not necessary

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The Situation: The Government Accountability Office (GAO) recently held that a bid need not contain all of the information listed in the Federal Acquisition Regulation (FAR clause 52.225-9) to qualify for the “unreasonable cost” exception to the Buy American Act (BAA).

The Result: The decision requires agencies to analyze the contents of a bid, rather than mechanically rejecting it on a technicality.

Looking Ahead: A company can protest a rejected bid so long as the missing information would not allow the bidder to later alter its price or relative standing.

The GAO recently sustained a protest finding that it was unreasonable for the Department of Energy (DOE) to reject a bid simply because it failed to strictly comply with all of the requirements for an exception to the BAA. In Addison Constr. Co., B-416525 (Sept. 4, 2018), Addison Construction Company submitted a bid to construct a capacitor bank for DOE in Arizona. Addison’s bid informed DOE that a portion of the construction materials used would be foreign, not domestic. Addison’s bid requested an exception to the BAA pursuant to FAR clause 52.225-9, available when the cost of domestic construction material is “unreasonable” (i.e., it exceeds the cost of foreign material by more than six percent).

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=760680

GAO says strict bid compliance with Buy American Act exception requirements not necessary

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The GAO recently sustained a protest finding that it was unreasonable for the Department of Energy (DOE) to reject a bid simply because it failed to strictly comply with all of the requirements for an exception to the BAA.

In Addison Constr. Co., B-416525, Addison Construction Company submitted a bid to construct a capacitor bank for DOE in Arizona. Addison’s bid informed DOE that a portion of the construction materials used would be foreign, not domestic. Addison’s bid requested an exception to the BAA pursuant to FAR clause 52.225-9, available when the cost of domestic construction material is “unreasonable” (i.e., it exceeds the cost of foreign material by more than six percent).

Under FAR clause 52.225-9, a contractor seeking an exception to the BAA construction materials requirement on the basis of unreasonable cost must include the following with its bid: price, quantity, unit of measure, and a description of the foreign and domestic materials at issue, along with a detailed justification for the use of foreign construction materials, a “reasonable survey of the market,” and a completed price comparison table in the format provided in FAR clause 52.225-9(d). In addition, the clause requires the contractor to provide the time of delivery or availability of the materials, the location of the construction project, specific supplier information (including the name, address, and telephone number for the supplier, and a copy of the supplier’s response or a summary thereof), and “other applicable supporting information.”

Keep reading this article at: https://www.lexology.com/library/detail.aspx?g=5c1472f9-6d91-4b8e-8983-ca1b544bf880 

Trade Agreements Act enforcement loses a couple more teeth

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Two recent judicial decisions involving the Trade Agreements Act (TAA) build on a trend reflecting a more favorable enforcement climate for contractors grappling with domestic preference regimes.

Earlier this year, the U.S. District Court for the District of Columbia dismissed a qui tam action that alleged fraud in connection with country of origin requirements imposed by the TAA. United States ex rel. Folliard v. Comstor Corp., 308 F.Supp.3d 56 (D.D.C. 2018) (finding the relator failed to adequately plead that the alleged TAA noncompliance was “material” to the Government’s payment decision). The decision marked a welcome early defeat of a False Claims Act case based on the enhanced materiality and scienter requirements of the Escobar decision (more here).

Two recent federal court decisions appear to extend the trend of taking some of the bite out of TAA enforcement, and potential exposure for alleged noncompliance.

Despite this welcome news, domestic preference programs remain a key legal obligation for government contractors (and an area likely to remain under scrutiny with the Administration’s professed focus on Buy American and Hire American initiatives).

Keep reading this article at: https://governmentcontractsnavigator.com/2018/09/17/trade-agreements-act-enforcement-loses-a-couple-more-teeth/

False Claims Act decisions provide insights into Buy American Act and Trade Agreements Act compliance

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Due to the government’s increased focus on domestic preference requirements – for example, through President Trump’s formal policy and action plan for agencies to “scrupulously monitor, enforce, and comply” with the so-called “Buy American Laws,” and Congress’s proposed legislation to make certain Buy American requirements more robust – contractors should not be surprised if there is a corresponding increase in related False Claims Act (FCA) activity.

Notwithstanding, based on a review of recent FCA decisions, whe courts generally have been skeptical of attempts by relators to allege FCA liability regarding a purported Buy American Act (BAA) or Trade Agreements Act (TAA) violation.

These decisions and several key takeaways that will help contractors avoid (and defeat) such FCA lawsuits are discussed in an article that can be downloaded here: https://www.cov.com/-/media/files/corporate/publications/2018/06/seven_takeaways_from_recent_fca_decisions_on_domestic_preference_requirements.pdf?_ga=2.118195274.232753034.1530642563-1639006631.1522784552

How will Trump’s ‘Buy American, Hire American’ executive order impact construction?

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In the latest of a series of executive orders signed since his inauguration, President Donald Trump has again chosen that method as a way to affect policy in the U.S. Unlike some other executive orders that aim to streamline project schedules and cut red tape, however, the “Buy American and Hire American” measure could put more restrictions on the construction industry.

Inside the executive order

The executive order doesn’t change anything just yet. Through the order, Trump calls on all of his administration’s agency heads to:

  1. Evaluate the implementation and compliance of existing Buy America laws under their jurisdictions
  2. Take a look at their waiver process and determine how it is affecting American business.
  3. Come up with additional policies, within the confines of existing law, that “maximize” the use of American-made products and their components, including common construction materials like steel, iron, aluminum and cement.

For purposes of the order, administration officials added that American-made steel means that it is produced in the U.S. from the melting phase forward.

Keep reading this article at: http://www.constructiondive.com/news/trumps-buy-american-hire-american-executive-order-construction-industry/441115/

Address to Congress foreshadows increased Buy American Act enforcement

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On February 28, 2017, President Donald J. Trump addressed a joint session of Congress for the first time and outlined his plan for a “new chapter of American Greatness.”

That plan included continued emphasis on protecting United States labor and manufacturing, and can be summarized in a few words often repeated by President Trump: “Buy American and Hire American.”

This rhetoric foreshadows the significant likelihood that enforcement of requirements for domestic sourcing and content, including the Buy American Act,  41 U.S.C. §§ 8301–8305, and the Trade Agreements Act, 19 U.S.C. §§ 2501–2581, will be a priority of the Trump Administration.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2017/03/president-trumps-first-address-congress-foreshadows-increased-buy-american-act-enforcement/

Update on government contracts ramifications of the Trump administration

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In December 2016, Jones Day issued “ Government Contracts Ramifications of the Trump Election,” a Commentary in which we discussed several likely impacts of the Trump Administration in the government contracts arena. Specifically, we discussed that the new Administration would:

  • Seek repeal of numerous Executive Orders affecting government contractors.
  • Reject some Obama Administration procurement policies, such as: the preference for fixed-price type contracts; the preference for lowest-price technically acceptable (“LPTA”) evaluation schemes; and the preference against outsourcing government jobs to private companies.
  • Embrace Commercial Item contracting.
  • Increase government spending for defense, cybersecurity, infrastructure, and immigration-related activities.
  • Decrease spending by many agencies, including the Department of Education, Environmental Protection Agency, and Internal Revenue Service.
  • Focus on compliance issues such as rooting out fraud, waste, and abuse, and ensuring compliance with the Buy American Act and Trade Agreements Act.
  • Withdraw from, or renegotiate America’s participation in, certain trade relationships, which could affect companies’ supply chains.
  • Decrease the federal workforce, which could result in understaffing and undertraining within the acquisition workforce.
  • Appoint the members of the FAR Council, including the Office of Federal Procurement Policy (“OFPP”) Administrator, Secretary of Defense, Administrator of National Aeronautics and Space Administration, and the Administrator of General Services Administration.

Since the issuance of our earlier Commentary, President Trump has taken several actions that provide additional insight into the impact his Administration will have on government contractors.

Keep reading this article at: http://www.mondaq.com/unitedstates/x/564798/Government+Contracts+Procurement+PPP/Update+On+Government+Contracts+Ramifications+Of+The+Trump+Administration

Architectural firm agrees to pay $3 million for ‘Buy American’ violations

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The Department of Justice (DOJ) has announced that Wisconsin-based Novum Structures, LLC (Novum) has agreed Justice Dept. seal - Copyto enter a guilty plea and pay $3 million to resolve its criminal and civil liability arising from its improper use of foreign materials on construction projects involving federal funds.  This use was in violation of contractual provisions implementing various domestic preference statutes, often referred to colloquially as the “Buy America” requirements.  Novum specializes in the design and construction of glass space frames often used in roofs and atrium enclosures.

The agreement resolves a criminal Information alleging that Novum repackaged materials and falsified documents relating to some federally funded construction projects in order to hide that it was using noncompliant foreign materials.  According to an agreement reached with the government, Novum will plead guilty to one count of concealing a material fact, in violation of 18 U.S.C. § 1001, and pay a $500,000 criminal fine.

“When taxpayer dollars are provided for construction projects, the government expects contractors to comply with all requirements, including ones that ensure the money remains in the U.S. economy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the DOJ’s Civil Division.  “This settlement shows that the Department of Justice is committed to pursuing claims against contractors that put financial gain ahead of complying with the law.”

In addition to the criminal fine, Novum has agreed to pay $2.5 million to resolve civil allegations under the False Claims Act that its conduct caused the submission of false claims for payment.  Specifically, the civil settlement resolves allegations that Novum caused false claims by knowingly – and in violation of its contractual obligations – using noncompliant foreign materials on several federally funded construction projects from Jan. 1, 2004 through July 11, 2013.

Construction projects funded by the U.S. government are generally subject to laws requiring the use of domestic materials, such as the Buy American Act; the Federal Transit Administration’s Buy America provision; and § 1605 of the American Recovery and Reinvestment Act.  The contracts involved in this case covered both government buildings and transit projects partially paid for with federal funds.

As part of the settlement agreement, Novum has agreed not to contest debarment from federally-funded projects.

The allegations resolved by the civil settlement were originally brought by whistleblower Brenda King under the qui tam, or whistleblower, provisions of the False Claims Act.  The act permits private parties to sue on behalf of the government those who falsely claim federal funds.  The act also allows the whistleblower to receive a share of any funds recovered through the lawsuit.  King will receive approximately $400,000 as her share of the civil settlement.

The U.S. Attorney’s Office for the Eastern District of Wisconsin prosecuted the criminal case, and also jointly handled the civil lawsuit with the Civil Division’s Commercial Litigation Branch.  Investigative assistance was provided by the Department of Transportation’s Office of Inspector General, the General Services Administration’s Office of Inspector General and the Defense Criminal Investigative Service, with additional support from other agencies.

The lawsuit is captioned United States ex rel. King v. Novum Structures, LLC, Case No. 12-cv-860 (E.D. Wis.).  The claims resolved by the civil settlement are allegations only; there has been no determination of liability except to the extent admitted in Novum’s plea agreement.

Source: http://www.justice.gov/opa/pr/wisconsin-architectural-firm-plead-guilty-and-pay-3-million-resolve-criminal-and-civil-claims

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