Recent Developments
November 13, 2014. President Obama issued a Presidential Memorandum click here authorizing the U.S. Agency for International Development pursuant to Public Law 85-804 to indemnify contractors performing Ebola-response contracts in Africa "with respect to claims, losses, or damage arising out of or resulting from exposure, in the course of performance of the contracts, to Ebola." This Presidential action is the latest example of how contractors should request contract-based indemnification (via FAR Clause 52.250-1) from any U.S. Government Agency for activities that pose unusually hazardous risk including Ebola-related risks.
July 31, 2014. President Obama signed an Executive Order click here that requires contractors to report labor law violations and requires contractors to agree that certain claims would not be arbitrated without the voluntary post-dispute consent of employees or independent contractors. Employers seeking federal contracts will be required to report certain labor law violations, including "arbitral awards" or "administrative merits determinations," that occurred within the prior three years when bidding on contracts. These reports will be used by Contracting Officers to determine if an offeror is "responsible" and thus eligible to receive an award. The new Executive Order will be implemented through amendments to the FAR. Employers will have an opportunity to submit public comments to the proposed FAR rule.
October 1, 2013. As of today, contractors that require Defense Base Act Insurance in connection with U.S. Army Corps of Engineers contracts can no longer rely on guaranteed coverage with fixed program rates from one carrier (CNA) and a designated managing agent/broker. Instead, contractors must now obtain DBA Insurance in the open and competitive marketplace from a broker of their choice. Willis’ dedicated Government Contractor team is uniquely positioned to provide government contractors with the most competitive DBA coverage pricing and options coupled with world class service. If you do business with the Army Corps of Engineers, CENTCOM Contracting Command (formerly JCCI-A) or the U.S. Army Contracting Command (408th CSB) and need DBA Insurance, please contact Bryan Salek or Steve Capace immediately for assistance.
January 4, 2013. Section 865 of the FY 2013 National Defense Authorization Act, signed into law on January 2, requires the Secretary of Defense to report to Congress when "entering into a contract that includes an indemnification provision relating to bodily injury caused by negligence or relating to wrongful death" or modifying an existing contract to include such language. This requirement (which excludes contracts awarded under 10 U.S.C. § 2354 and CERCLA, but not indemnification provisions authorized under Public Law 85-804) ratchets up the recent focus on contractor recovery for work performed under government contracts with its mandate that the Secretary explain to Congress the justification for including the indemnification provision.
January 3, 2013. On December 21, 2012, the government issued a final rule that requires incoming contractors to offer qualified employees of the predecessor contractor and its subcontractors a right of first refusal of employment if the positions are covered by the Service Contract Act, unless a waiver is obtained or an exception applies. The rule becomes effective January 18, 2013 and implements Executive Order 13495 and the Labor Department's regulations on Nondisplacement of Qualified Workers Under Service Contracts.
November 15, 2012—DOJ and the SEC today issued long-awaited written guidance on the U.S. Foreign Corrupt Practices Act in a 120-page publication entitled, A Resource Guide to the U.S. Foreign Corrupt Practices Act. The Guide covers numerous topics of interest to any company that could fall within the broad reach of the FCPA.
July 23, 2012—With the expiration of the CNA contract, as of today, contractors that require Defense Base Act Insurance in connection with U.S. Department of State contracts can no longer rely on guaranteed coverage with fixed program rates from one carrier and a designated broker. Instead, contractors must now obtain DBA Insurance in the open and competitive marketplace. Willis’ dedicated Government Contractor team is uniquely positioned to provide government contractors with the most competitive DBA coverage pricing and options coupled with world class service. If you do business with the U.S. Department of State and need DBA Insurance, please contact Bryan Salek or Steve Capace immediately for assistance.
On September 27, 2011, a 200-page class action lawsuit [click here] was filed against numerous government contractors and DBA insurance carriers claiming that certain U.S. nationals, local nationals and third country nationals were unjustly denied medical treatment and DBA benefits after they were injured while performing services overseas in connection with U.S. Government contracts. The complaint also seeks to recover for Post-Traumatic Stress Disorder (PTSD) claims that have yet to be diagnosed or that have been misdiagnosed.
It's possible that this lawsuit may be expanded to include additional plaintiffs and additional government contractors as defendants. The lawsuit alleges, among other things, that the contractors “willfully intended” to deprive DBA benefits to individuals and their families. Proper processes and procedures relating to DBA administration could help avoid your client being named in this and similar lawsuits. This lawsuit makes evident that the failure to properly place and administer DBA insurance may subject a company to costly suits and liability. If you have any questions, please do not hesitate to contact Bryan Salek (bryan.salek@willis.com) or Steve Capace (steve.capace@willis.com).
12 Sept 2011--OMB announces final guidance on “inherently governmental” functions. A copy of the long-awaited final policy letter (click here) goes into effect on 12 October 2011. This policy is an attempt to clarify what functions are inherently governmental and must always be performed by a federal employee. The document includes a list of functions that are clearly inherently governmental and separate lists of "functions closely associated with the performance of inherently governmental functions" -- where agencies have more discretion in utilizing contractor services. If you have any questions or concerns about how this final policy letter may affect your existing or prospective business, please contact a member of our team
Aug. 31, 2011–The eight-member, bipartisan Commission on Wartime Contracting in Iraq and Afghanistan issued their congressionally mandated Commission final report, “Transforming Wartime Contracting: Controlling Costs, Reducing Risks.” Click here for a copy of the entire 240 page report that concludes at east $31 billion has been lost to contract waste and fraud and outlines proposed major reform.
http://www.wartimecontracting.gov
On July 28, 2011, the Office of Special Inspector General for Afghanistan Reconstruction (SIGAR) released a report entitled “Weakness
in the USACE Defense Base Act Insurance Program Led to as Much as $58.5 Million in Refunds Not Returned to the U.S. Government and Other Problems”
Click here for a copy of the entire report. Willis’ Government Contractor Practice has established a best practices approach to assist our clients avoid
some of the pitfalls mentioned in this report. To learn more, please contact a member of our team.