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Safeguarding of Contractor Information Systems Final Rule Issued

The Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a final rule on the basic safeguarding of contractor information systems that process, store, or transmit Federal contract information (“FCI”). Effective June 15, 2016, Federal Acquisition Regulation (“FAR”) 52.204-21, Basic Safeguarding of Covered Contractor Information Systems, was created and will be included in all solicitations and new contracts. It will apply below the simplified acquisition threshold and will be a required flow down clause. It will not apply to commercial off-the-shelf items, but will apply to commercial items and to services where FCI occurs. FCI is. Read More.

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DOE Issues “Absolute Ban” on Overtime for Training and Education

On May 3, the Department of Energy (“DOE”) issued Acquisition Letter 2016-5 (“ AL 2016-5 ”), which provides guidance for managing overtime costs for training, and explicitly addresses overtime costs for training and education. The AL applies to all contracts and is effective immediately until cancelled. Federal Acquisition Regulation (“FAR”) Subpart 31.2 covers cost principles in contracts with commercial organizations. It stipulates a cost is only allowable only when it complies with all five requirements listed in FAR 31.201-2: Reasonableness Allocability Cost Accounting Standards/Generally accepted accounting principles Contract terms All of the other limitations in FAR Subpart 31.2 The limitations include the. Read More.

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FLSA Changes on Overtime Compensation Expected Summer 2016

By: Sara Crabtree , Manager Cherry Bekaert has been providing periodic updates on proposed changes to the Fair Labor Standards Act (“FLSA”) in regard to overtime compensation and how employers might be impacted by these changes. The Solicitor of Labor has now confirmed that the changes are expected to be finalized and announced during the late spring or summer of 2016, and will become effective 60 days after finalized. In March 2014, President Obama issued a memorandum to the Secretary of Labor, directing him to “propose revisions to modernize and streamline the existing overtime regulations” (under the FLSA). Although the President did. Read More.

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ESOPs Gain in Popularity

By: John Carpenter , Principal Many private company business owners are taking a closer look at Employee Stock Option Plans (“ESOPs”) as a tool for either an exit strategy or a way to “take money off the table” through a sale of a portion of their company stock holdings. ESOPs were a less popular diversification strategy during the 2000s when government spending was on the rise, especially within the Department of Defense (“DoD”) and many companies could sell for attractive multiples with large, upfront cash components. The combination of flat to declining DoD budgets leading to less attractive market multiples, and capital. Read More.

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Proposed Changes to Contractor Purchasing System Clause

The Department of Energy (“DOE”) is proposing to amend the Department of Energy Acquisition Regulations (“DEAR”) to increase dollar thresholds in its contractor purchasing system clause for management and operating contracts to conform to Federal Acquisition Regulation (“FAR”) Subpart 28.1. Additionally, DOE is revising the DEAR in accordance with a class deviation addressing Buy American Act non-availability determinations. Currently, DEAR section 970.5244-1, Contractor purchasing system, paragraphs (f)(1) through (f)(3) do not presently reflect the applicable dollar threshold in FAR 28.102-2(b) and (c). This proposed rule replaces the dollar amount in these paragraphs with reference to title 48 of the Code of. Read More.

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Audit Alert Issued for DCMA Implementation Guidance on Blended Compensation Caps

On February 19, 2016, the Defense Contract Audit Agency (“DCAA”) issued Memorandum for Regional Directors (“MRD”) 16-PSP-005(R), Audit Alert on DCMA Implementation Guidance on Blended Compensation Caps. The Alert provides auditors with official guidance when dealing with blended compensation caps with contractors, and in tandem with the Defense Contract Management Agency (“DCMA”). What does this mean? Let’s take a few steps back to October 2014, when Shay Assad, the Director of Defense Pricing Acquisition Technology, and Logistics OUSD (“AT&L”), issued a memo stating that use of a blended rate is deemed “practical and cost efficient.” This was in reaction to. Read More.

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