GRSM Government Contracts Practice Group – November 2023 Update

Recent Cases:

Ariton v. AeroVironment, Inc., No. 2:20-CV-07438-AB-GJS, 2023 WL 6369773 (C.D. Cal. Aug. 15, 2023)

• Contractor immunity defense shielded the defendant-contractor from patent infringement liability. The defendant developed a helicopter for NASA for Mars exploration, based on the patent owed by the plaintiff. The defendant later used the patent to develop and market a new aircraft, which it did not sell commercially. The court ruled that such activity is not sufficiently “commercial” to overcome the defense and issued a judgment for the defense.

Sys. Dynamics Int’l, Inc. v. United States, No. 23-431, 2023 WL 6532692 (Fed. Cl. Sept. 21, 2023)

• The Court of Federal Claims (“COFC”) ruled in favor of the plaintiff-protester due to the Army’s failure to assign an Unacceptable technical factor rating. The awardee/intervenor submitted a staffing proposal that lacked the mandatory minimum educational requirement. While the applicable technical subfactor set forth in the solicitation did not specifically address the minimum education level, the labor category mapping set forth in an appendix to the solicitation specified the applicable minimum standards. The COFC found that the Army failed to assign a deficiency rating to the subfactor, which, per the court, prejudiced the protestor.

Forthcoming Agency Rules:

Federal Acquisition Regulation: 8(a) Program

• Department of Defense (“DoD”), Government Services Administration (“GSA”), and NASA are issuing a final rule, effective November 6, 2023, to implement the Small Business Administration's ("SBA") regulatory changes to the 8(a) Program, with the aim of clarifying program aspects and reducing confusion and burdens for procuring activities and 8(a) participants. The rule includes notification requirements for contracting officers and eliminates the need to submit actions to the SBA. The rule is expected to benefit contractors by reducing ambiguities in the procurement process.

National Defense Authorization Act of 2020, Credit for Lower Tier Subcontracting and Other Amendments

• Effective, November 13, 2023, the SBA is updating its Small Business Subcontracting Plan regulations to align with changes in the National Defense Authorization Act, which permits certain prime contractors to receive credit for lower-tier small businesses contractors.

• Additionally, the SBA is changing the threshold for required subcontracting plans to $750,000 to align with the Federal Acquisition Regulation ("FAR") and implement new recordkeeping requirements to substantiate the lower-tier subcontracting credit.

Proposed Agency Rules:

Defense Federal Acquisition Regulation Supplement: DoD Mentor-Protégé Program (DFARS Case 2023-D011)

• The DoD proposes changes to the Defense Federal Acquisition Regulation Supplement ("DFARS"), granting the DoD Mentor-Protégé Program permanent status, extending the term for program participation, and eliminating the deadline for mentor-protégé agreements, entered into after December 23, 2022. Additionally, the proposed rule includes adjustments to the dollar threshold for mentor eligibility, extends the program participation term, and expands the scope of assistance that mentors can provide and receive.

• Deadline for Comments: December 26, 2023. Contact GRSM for additional details of the proposed rule and comment submission.

Federal Acquisition Regulation: Standardizing Cybersecurity Requirements for Unclassified Federal Information Systems

• The DoD, GSA, and NASA propose revisions to the FAR to standardize cybersecurity contractual requirements for Federal Information Systems ("FIS") across federal agencies.

• The proposed rule outlines specific policies, procedures, and requirements for contractors providing services for the development, operation, or maintenance of FIS, with the aim of enhancing cybersecurity and aligning practices across the government. It will introduce two new contract clauses for non-cloud and cloud FIS services.

• Deadline for Comments: December 4, 2023. Contact GRSM for additional details of the proposed rule and information regarding comment submission.

Federal Acquisition Regulation: Protests of Orders Set Aside for Small Business

• The DoD, GSA, and NASA propose changes to the FAR to align with SBA rules that clarify the process for size and socioeconomic status protests in the context of multiple-award contracts and orders. The proposed FAR rule aims to enhance clarity in the procurement procedure, such as defining when protests are due for various scenarios.

• Deadline for Comments: December 4, 2023. Contact GRSM for additional details of the proposed rule and comment submission.

GRSM Government Contracts Practice Group

GRSM's 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. GRSM would like to acknowledge the significant contributions to this update by Quyen Dang.

Contacts:

Patrick Burns – pburns@grsm.com
Meredith Thielbahr – mthielbahr@grsm.com

Subscribe here to receive future updates from the GRSM Government Contracts team.