Albo & Oblon, L.L.P - Arlington/Main Office.
2200 Clarendon Blvd., Ste. 1201
Arlington, VA 22201
(703) 312-0410
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Albo & Oblon, L.L.P -- Fairfax County Office
6367 Rolling Mill Place, Suite 102
Springfield, VA 22201
(703) 455-0046
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Albo & Oblon, L.L.P. -- Norfolk/Hampton Roads Office
World Trade Center
101 West Main Street, Suite 435
Norfolk VA 23510
(757) 200-7900
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Albo & Oblon, L.L.P. -- Washington, D.C./Maryland Office
641 Indiana Avenue, N.W., Second Floor
Washington, DC 20004
(202) 386-7470
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This article is for your personal information only and is not intended as legal advice. This area of the law is very complex. Every case is different and the information contained herein is general. This information is not intended to be legal advice. Nor is this material intended to replace consultation with a professional. Always consult a licensed attorney for your particular case. Nothing herein shall create an attorney/client relationship.
Overview of Government Contract Law
Q. What are some of the major regulations government contractors need to know?
A. Various procurement statutes and regulations govern the process the federal governments must follow in its business dealings with private industry. They cover critical matters, such as how the federal government selects, monitors, and pays its contractors. Major procurement regulations include the following:
General Statutes and Rules:
The Federal Acquisition Regulations (FAR) is found at Title 48 C.F.R. Chapter 1. The FAR provides most of the rules for government contracts and these rules often surprise those who have previously only dealt with the private sector. For example, the FAR permits the government to make certain unilateral changes to the contract. And, the FAR permits the government to audit the books of the private company.
The United Services Procurement Act of 1947 governs procurements made by the following agencies: The U.S. Department of Defense, The Department of the Army, The Department of the Navy, The Department of the Air Force, The Coast Guard, and The National Aeronautics and Space Administration.
The Competition in Contracting Act (CICA) is intended to increase full and fair competition in Government procurements. This law serves to restrict the Federal Government's ability, except in limited circumstances, to procure goods and services by non-competitive means such as "sole source" or "set-aside" procurement awards.
Contracts Disputes Act (CDA) -- The CDA creates a legal framework for resolving disputes between a contractor and a procuring agency relating to the performance of most government contacts. A dispute arising during the performance of a government contract between the contractor and the procuring agency often results in the contractor filing a claim against the agency. The procedure for such disputes requires the contractor to a request a final decision from the agency Contracting Officer. If the decision is not favorable to the contractor, the contractor may appeal the CO's decision to the agency's Board of Contract Appeals or to the U.S. Court of Federal Claims. 41 U.S.C. § 605(a).
The Procurement Integrity Act. The PIA prohibits the release of source selection and contractor bid or proposal information. Also, a former employee who served in certain positions on a procurement action or contract in excess of $10 million is barred for one year from receiving compensation as an employee or consultant from that contractor. 48 C.F.R. § 3.104-1-11.
False Statements Act—18 U.S.C. 1001 prohibits contractors and individuals from "knowingly and willfully" making false statements which might support a fraudulent claim or which might "pervert or corrupt the authorized functions of Government agency to which the statement was made." The Act covers oral and written statements, whether sworn or unsworn. Interestingly, the Act applies to matters that involve a Government agency's activity even if the false statement was not made to the Government. (ex.: False Statements Act violation found where subcontractor submitted false invoices to prime contractor under federal price redeterminable contract).
Truth in Negotiations Act of 1962 (TINA) requires that, before contractors engage in price negotiations for negotiated contracts at over $500,000.00, they must disclose and certify their underlying cost and pricing data. Subcontractors are also subject to TINA if the prime contract is covered under the statute.
The False Claims Act (FCA), 31 U.S.C. §§ 3729-33, provides for civil actions by the government to recover damages and civil penalties against contractors who submit false claims for payment. The FCA covers fraud involving any federally-funded contract or program, with the exception of tax fraud. Penalties for violations of the FCA are severe—the government may recover three times the amount of its loss, plus an additional penalty of between $5,000 and $10,000 for each false document used or each false claim submitted. The FCA allows any person who knows that an individual or company has financially defrauded the federal government to file a "qui tam" lawsuit to recover damages on the government's behalf.
Qui Tam Actions- 31 U.S.C. § 3730(b)(1) allows a private citizen to bring an action under the False Claims Act on behalf of the United States. The citizen, called a "relator" files the complaint with the government. The government then investigates the complaint and determines whether it will litigate the case or not. Should the government proceed with litigation, the relator is entitled to between 15 and 30 percent of all damages recovered by the government, whether through a judgment or through settlement.
The Anti-Kickback Act prohibits contractors and subcontractors from soliciting, accepting, or attempting to solicit or accept any kickbacks from their subcontractors. This statute is intended to prevent a contractor or subcontractor to receive money in exchange for the award of a subcontract without going through a full and fair competitive process. The Act provides for both civil and criminal sanctions, depending on the nature of the violation.
Labor Statutes
The Davis-Bacon Act, 40 U.S.C. § 276a-2(a), establishes minimum wages for contractor laborers and mechanics working on government construction projects. The U.S. Department of Labor issues wage determinations reflecting current established wages and fringe benefits for various classes of laborers and mechanics. These wage determinations cannot be contracted around, so even if a government contract sets wages for such employees below the applicable wage determinations, a contractor, not the procuring agency, is ultimately responsible for compliance with the Act.
The Walsh-Healy Act, 41 U.S.C. § 351-58, requires contractors to pay their employees no less than the minimum wage prevailing in the locality on government service contracts. The Act prohibits contractors from assigning employees to hazardous or unsanitary working conditions and requires the contractor to post notices of the prevailing minimum wage were employees may see such notices. Penalties for noncompliance with the Act include withholding of contract funds, contract termination, and in extreme cases, debarment.
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