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Government Contractors

Proposed Rule Prohibits Award of Defense Contracts for Companies Who Violate the Fair Labor Standards Act

If your business violated the Fair Labor Standards Act (“FLSA”) within the past five years, your company may be barred from receiving new defense contracts for a period of one year. The Department of Defense Appropriations Act (H.R. 4870) for fiscal year 2015  is expected to provide funding of $491 billion for FY 2015, which is a modest one percent increase from the prior year enacted budget. Section 10030 of the act is difficult to interpret, but essentially states that any person who has violated the FLSA within five years may not receive a contract using funds available by the. Read More.

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Changes to ALL Compensation for Government Contractors

As part of the 2013 Bipartisan Budget Act, Congress reduced the contractor and subcontractor compensation cap from $952,308 to $487,000, a 49 percent reduction. The cap will be adjusted annually to reflect the change in the Employment Cost Index for all workers as calculated by the Bureau of Labor Statistics. As always, contractors can pay whatever amounts they deem appropriate, but the government will only reimburse (at the most) to the cap. Previously, Congress, in the 2012 National Defense Authorization Act, applied the ceiling on reimbursable pay to all Department of Defense (“DoD”), Coast Guard, and National Aeronautics and Space. Read More.

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New DoD Requirement to Perform its own Price Reasonableness Determination

On March 13th of this year, the Office of the Under Secretary of Defense for Acquisition Technology and Logistics issued a memorandum directing contracting officers to comply with a deviation from the Federal Acquisition Regulation (“FAR”) 8.404(d). The class deviation is applicable to Department of Defense (“DoD”) entities buying off Schedule contracts and remains in effect until the language is incorporated into the Defense Federal Acquisition Regulation Supplement. This deviation provides that “GSA has determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable for the purpose of establishing. Read More.

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SBA Adjusts Size Standards

On June 12, 2014, the Small Business Administration (“SBA”) published an interim rule with request for comments in the Federal Register making inflation adjustments to its revenue-based size standards. The new size standards become effective on July 14, 2014. Parties interested in making comments on the interim rule must submit their comments by August 11, 2014. SBA policy is to review its revenue-based size standards every five years to determine if an adjustment for inflation is warranted. This does not mean that the size standards will be revised every five years based upon specific criteria as the Truth in Negotiations Act threshold. Read More.

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Opportunities for Small Businesses – SBIR Program

The Small Business Innovation Research (“SBIR”) program (“the Program”) enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization. The mission of the Program is “to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.” High-tech companies that meet the eligibility requirements should heavily consider exploring the availability of federal government grants and contracts through this Program. The eligibility requirements include: business must be for-profit; be independently owned and operated in the United States; have less than 500 employees;. Read More.

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Defense Contract Audit Agency Issues Guidance on Professional and Consulting Costs

The Defense Contract Audit Agency (“DCAA”) recently released a Memorandum for Regional Directors entitled, “ Audit Alert on Professional and Consultant Service Costs (FAR 31.205-33) and Purchased Labor ”. The intent of the memorandum is to ensure that auditors are testing the transaction based on the nature of the claimed cost, and not on the account nomenclature in which the contractor recorded the cost. Federal Acquisition Regulation (“FAR”) 31.205-33(a) defines professional and consulting services costs as services rendered by persons who are members of a particular profession, or possess a special skill, and who are not officers or employees of the contractor. Examples include those services acquired by contractors to enhance their legal,. Read More.

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