The BDO GovCon Week Ahead - October 2020

October 26, 2020

New DFARS Interim Rule Introduced with November 30 Effective Date: On September 29, 2020, the Department of Defense (DoD) released an interim rule that industry hoped would provide clearer guidance regarding their implementation of the Cybersecurity Maturity Model Certification (CMMC) framework.  Most of the rule focuses on increased requirements for confirming that contractors are currently in compliance with all 110 security controls in the National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171. The interim rule also includes a clause for adding CMMC security controls, in addition to the NIST 800-171 controls, as a requirement in DoD contracts. Although the rule is not effective until November 30, 2020, the preamble encourages prime contractors and subcontractors that are required to implement NIST SP 800-171, pursuant to DFARS clause 252.204-7012, to immediately conduct and submit a self-assessment into the Supplier Performance Risk System (SPRS) in order to avoid any delays in future contract awards. As a result, many prime contractors are now sending out a letter to their subcontractors as a notice of deadline of compliance.

For more information, please click this link.

A Race to the Finish Line: One day after clinical trials for a promising COVID-19 vaccine candidate developed by Johnson & Johnson were paused due to a participant falling ill, an equally promising COVID-19 therapeutic, developed by Eli Lilly, was halted for similar safety concerns.

Eli Lilly and Johnson & Johnson have joined ranks with fellow pharmaceutical giant AstraZeneca, whose COVID-19 vaccine candidate was on hold for nearly a month due to a clinical trial participant falling ill. AstraZeneca has since continued clinical trials globally, with the notable exception of the United States.

Although pauses in clinical trials are routine and expected throughout the development phase of a vaccine or therapeutic, the breakneck timelines and mounting political pressure surrounding the COVID-19 pandemic have thrust pharmaceutical companies into a global spotlight that is uncommon in the pharmaceutical development world. The development and approval of vaccines and therapeutics regularly takes years, if not decades, to complete. However, due to the unique situation of COVID-19 and the global lockdowns that have persevered for the majority of 2020, the world truly is waiting.

In addition to AstraZeneca and Johnson & Johnson’s vaccine candidates, U.S. biotech company Moderna and pharmaceutical giant Pfizer are considered some of the top contenders for producing an effective COVID-19 vaccine. All four candidates are in Phase 3 clinical trials.

For those already infected with SARS-COV-2, Eli Lilly, Regeneron Pharmaceuticals and Gilead Sciences are working on potentially life-saving therapeutics. Gilead has pivoted its Ebola therapeutic, remdesivir, to treat COVID-19 patients. Regeneron and Eli Lilly are working on antibody treatments. However, Regeneron’s therapy has received considerably more publicity in recent weeks due to its use in President Donald Trump’s COVID-19 recovery compared to Eli Lilly’s similar offering.

As fall begins and flu season rapidly approaches, the world will continue to watch, roadblocks and all, as these therapeutics and vaccines race on to the finish line.

For more information, please click this link.

The Competitive Edge: For nations to remain competitive in the tech-driven world we live in, it is critical to remain at the forefront of innovation. Knowing the importance of remaining competitive on the global stage, the White House recently unveiled its lofty emerging tech strategy and wide-ranging goals it hopes will help the U.S. remain at the forefront of technology.

This strategy, dubbed the National Strategy for Critical and Emerging Technologies, sets policy goals and outlines ways the nation can protect its competitive edge in artificial intelligence, quantum information science, space, military and other fields.

Although this strategic framework does not contain much in the way of specific measures and action plans, it is meant to be an “overarching, broad umbrella framework,” that can be used to excel the development of additional individual strategies for particular technologies.

The overarching takeaway from this new strategic initiative is that the government plans to increase the priority of federal R&D funding, accelerating the adoption and wide-spread integration of emerging technology within multiple agencies, and recruiting a talented workforce with extensive science and technology skills.

For more information, please click this link.

A Quicker Path to Settled Rates? Last month, the Defense Contract Audit Agency (DCAA) issued a memo to its directors on the implementation of its newest tool, a repository for contractor incurred cost submissions. The Contractor Submission Portal (CSP) is a SharePoint site that will offer contractors with DCAA cognizance an electronic way to submit, revise and even withdraw their annual incurred cost submissions.

The Memorandum for Regional Directors (MRD) 20-OTS-005(R), dated September 29, 2020, details how contractors will be introduced to the portal, approximately 30 days before their annual submission is due. Contractors will then be given the opportunity to opt-in to use the portal and to become familiar with its functionality before they submit.

Using the portal is voluntary, but some of the perks of using the portal include the ability to easily update or withdraw an already submitted incurred cost submission, version control so that DCAA can easily determine which document is the most current, a simple way to transfer large files, and an automated notification acknowledging receipt of submittal.

October 19, 2020

The Need for Speed: The Department of Defense (DoD) has disseminated $600 million in awards to 15 companies spanning five U.S. military installations to support the testing and experimentation of 5G cellular technology — the fifth-generation technology standard for cellular networks. This new standard promises exceptional increases in speed, reliability and network capacity compared to the current 4G standard.

Specifically, under these awards, the five military installations will be conducting testing and research on:

  • Augmented reality and virtual reality capability for use in operations, training and mission planning.
  • Naval logistics operations (ship-to-shore transmission time)
  • “Smart warehouses” for vehicle storage and maintenance
  • Distributed command and control improvements
  • Dynamic spectrum sharing for mission systems

By utilizing this new standard, the DoD can improve communications, gain logistical efficiencies, activate next-gen equipment, and create a more secure and interconnected DoD interface. This will help to strengthen war-fighting capabilities and increase U.S. economic competitiveness in this vital field.

For more information, please click this link.

…And Then There Were Two: IBM, one of the world’s largest and well-known computing firms, has made the decision to split into two public companies. The spinoff consists of IBM’s IT infrastructure services unit, which focuses on providing technical support services to customers. This service unit, which was an IBM legacy business, has been battered by a changing marketplace and the rise of cloud computing.

With over 109 years in operation, IBM is seeking to restructure its current business model and place more emphasis on its lucrative cloud-computing services, instead of its well-known IT infrastructure services. This move represents IBM’s ability to adapt to an ever-changing market and reinvent its offerings to fit the modern world.

By the end of 2021, this newly separate company will operate under a new name and focus on providing technical support, infrastructure support and network services to clients. This newly formed company will have 90,000 employees and will retain its current operations with more than 4,600 customers in 115 countries.

For more information, please click this link.

Striving for More than Satisfactory: Fine, all right, ok, average, satisfactory …  all are just alternatives to the word “meh.” Imagine your entire company working hard to make sure that you’ve met all your government customer’s project and administrative expectations throughout a multi-year contract lifecycle, only to have the official system of record state that your company’s performance was satisfactory.

That’s what several contractors are encountering when it comes to their performance records in the Contractor Performance Assessment Reporting System (CPARS.) Government agencies and contractors alike are brainstorming on ways to reflect the contractor’s performance accurately and in a timely manner. Since past performance plays such a large part in future opportunities and awards, a recent survey highlighted some potential alternatives to the current rating process, including:

  • More frequent contractor-to-government communication through self-assessments
  • CPARS Lite for less complex and less risky contracts
  • Less reliance on some of the contract’s administrative tasks and a realignment of CPARS ratings with mission objectives, contract outcomes and the quality assurance surveillance plan

For more information, please click this link.

October 12, 2020

Fiscal Year 2020 Federal Government Spend Tops $6 Trillion: Federal spending has long been a divisive and poignant topic. On the heels of the unprecedented COVID-19 pandemic, the U.S. federal government closed FY20 with spending toping an unprecedented $6.1 trillion for the first time. This is nearly $2 trillion more than FY19’s $4.4 trillion in spending.

The sharp increase in spending can largely be attributed to COVID-19 relief, and subsequent public health and stimulus initiatives, entitlements, and defense. Health and Human Services (HHS), Social Security Administration, and the Department of Defense received $1.3 trillion, $1.2 trillion, and $690 billion, respectively.

Following the government’s FY20 close, President Donald Trump signed a temporary government spending bill into law. This stop-gap effort subverts a government shutdown and funds federal agencies through the November election to December 11, 2020.

For more information, please click this link.

Please check this link for information about averting the government shutdown. ​

A Divided House Passes $2.2 Trillion COVID-19 Relief Package: The House of Representatives voted, largely along party lines (214-207), to approve a $2.2 trillion COVID-19 stimulus proposal. This proposal, spearheaded by congressional Democrats, represents a scaled down version of the larger $3.4 trillion relief package the House passed in May. Congressional Republicans, on the other hand, had proposed a $1.6 trillion relief bill.

Congressional Republicans and Democrats have been negotiating another stimulus bill following the approval of the CARES Act, which passed March 27, 2020. A large point of contention has been the value of this stimulus package. Congressional Democrats are in favor of another large, sweeping relief package, while Republicans are seeking a more scaled back approach.

This most recent approval in the House represents a reinvigoration of negotiations, which had largely been stalled throughout the summer.

For more information, please click this link.

Executive Order Restricts Diversity and Inclusion Training Topics: Starting next month, almost every federal contract will contain a clause that forbids contractors and their subcontractors/vendors from holding training that teaches race or sex stereotyping or scapegoating in an effort to unify the federal workforce and the workforces of those performing on federal contracts.

The Executive Order on Combating Race and Sex Stereotyping requires that federal contractors post copies of the notice in conspicuous locations where it can be seen by employees and applicants for employment, flow down the requirement to its subcontractors and vendors, and not use training that “inculcates” any form of race or sex stereotyping or scapegoating.

Federal contractors’ non-compliance with the requirements may result in the cancelation or termination of their contracts, and suspension or debarment, if their training is found to have taught the following concepts:

  • One race or sex is inherently superior to another
  • An individual is inherently racist, sexist, or oppressive by virtue of their race or sex
  • An individual should be discriminated against or receive adverse treatment based on their race or sex
  • Members of a particular race or sex cannot and should not attempt to treat others without respect because of their race or sex
  • An individual’s moral character is determined by their race or sex
  • An individual, by virtue of their race or sex, bears responsibility for actions committed by members of the same race or sex
  • An individual should feel discomfort, guilt, or anguish or any other form of psychological distress because of their race or sex
  • Meritocracy or traits, (e.g., a good work ethic) are racist, sexist, or were created by a particular race to oppress another race

For more information, please click this link.

October 5, 2020

Government Combining Efforts to Create a Unified Federal Supply Chain Council: The Office of Management and Budget (OMB) has proposed the formation of an interagency council to eliminate the duplication of efforts between different agencies. Similar to bans on Kaspersky and Chinese telecom companies for national security reasons, the council would unify the government’s recognition of supply chain risk and require federal contractors to consider their supply chain’s potential security risks, as well as their vendors’ connections, both personal and professional, to foreign governments.

For more information, please visit this link.

HHS Looking for Vendor to Get Their Feet Wet with COVID-19 Testing: Research has shown that wastewater testing and analysis, specifically of sewage from residential toilets, can help to predict new cases of COVID-19 up to one to two weeks before an outbreak occurs. This testing will play a part in America’s re-opening strategy. The Department of Health and Human Services (HHS) recently issued a solicitation for wastewater testing that would see wastewater and fecal matter testing and analysis performed for approximately 10 percent of Americans during an eight-week base period beginning at the end of September. The solicitation also contained a nine-week option period that could be exercised if the base period testing proved successful and would expand the testing to cover approximately 30 percent of the U.S. population.

For more information, please visit this link.

Government Seeking Comments on Expanded Buy American Rule: A recently proposed rule was published in the Federal Register that would expand the Buy American considerations and requirements in the Federal Acquisition Regulation (FAR) related to construction materials. The rule would implement E.O. 13881, Maximizing Use of American-Made Goods, Products, and Materials, which increases the domestic content requirement for iron and steel requirements to 95 percent and provides a preference to offerors who meet the requirements.