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Government Contractors

Debarment Penalty for Violating the Service Contract Act

Earlier this year, the Department of Labor (“DoL”) debarred a company and its owner/manager for three years for violations of the McNamara-O’Hara Service Contract Act (SCA) (41 U.S.C. Sec. 6701 et. seq.). Debarment is a severe punishment, so the Federal Acquisition Regulation (FAR) allows government contractors the opportunity to demonstrate why debarment is not necessary in certain situations. However, statutory debarments are a different matter. The SCA prescribes a three-year debarment for violations of the act unless there are unusual circumstances. This particular case (DoL Wage and Hour Division (“WHD”) vs. Garcia Forest Service, LLC & Samuel Garcia and Flor. Read More.

New Federal Contractor Minimum Wage Rule

Around 200,000 employees of federal contractors performing on construction, service, concession and federal property contracts can look forward to a pay raise on contracts awarded after January 1, 2015. The Department of Labor issued final regulations to implement President Obama’s executive order to increase the federal minimum wage from the current $7.25 per hour to $10.10. The rule applies to all employees covered by the Fair Labor Standards Act (FLSA), Service Contract Act (SCA), and Davis-Bacon Act (DBA) for employees that work directly on a contract, as well as those who execute additional duties necessary to the performance of the. Read More.

Inversion Legislation May Affect Government Contractors

In a summer dominated by foreign policy and global conflict, one of the few domestic issues to garner significant coverage from both the media and Washington has been the topic of corporate “inversion.” Inversion refers to the tax reduction strategy of reincorporating overseas to reduce the tax burden of foreign sourced income. Recent inversions, such as Burger King’s move to Canada, have prompted lawmakers on both sides of the aisle to not only re-examine our current inversion laws, but also the entire U.S. corporate tax structure. With a top nominal corporate tax rate among the highest in the developed world,. Read More.

SBA Hits Small Business Award Threshold

On August 1st, the Small Business Administration (“SBA”) announced that the federal government had reached its small business procurement goal for the first time since 2005. Each year, federal agencies are mandated by statute to award 23 percent of all contracts to qualifying small businesses. The Fiscal Year (FY) 2013 SBA Scorecard indicated that 23.39 percent of prime contract awards, valued at $83.1 billion, were awarded to small businesses. The positive news includes several areas of note. Awards to Small Disadvantaged Businesses (SDB) accounted for 8.61 percent of prime contract awards, far outpacing the SBA’s goal of 5 percent. Awards. Read More.

Cybersecurity Requirements: Another Challenge for Government Contractors

With all the recent data security breaches, it is not surprising that the U.S. Government is starting to crack down on cybersecurity for their government contractors. Approaches the U.S. Government are taking include issuing laws, regulations and standards that require contractors to take security measures for safeguarding their data. On July 7, 2014, President Obama signed into law the Intelligence Authorization Act for Fiscal Year 2014 (Public Law 113-126). This law requires intelligence contractors with security clearances to promptly report network and information system breaches, and provide government investigators access to the contractors’ systems that have been comprised. Additionally, the. Read More.

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DoD Inspector General Issues Two Reports on DCAA Quality Control

On August 27, 2014, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (MRD) 14-PAS-014(R) , captioned ”Audit Guidance on Removal of Modified GAGAS Statement in Audit Reports”. As background for this MRD, Generally Accepted Government Auditing Standards (GAGAS) require audit organizations to obtain an external peer review at least once every three years. For DCAA, the external reviews are performed by the Department of Defense’s (“DoD”) Inspector General. In August 2009, the Inspector General revoked its previous approval of DCAA’s quality control program. As a consequence, since August 2009, DCAA has been unable to state that it performed its audits in accordance with. Read More.

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