Redstone Government Consulting Blog | Government Regulations (22)

Supply-Chain Rules Under DFARS Subpart 239.73

In the ongoing trade war between the U.S. and China, the U.S. Government’s Section 301 tariffs on Chinese-origin goods has received most of the attention, and rightfully so. Effective September 1, 2019, these tariffs generally impact all Chinese-origin goods imported into the United States, including all information technology and telecommunications equipment (“Equipment”). However, there have also been several recent developments in U.S. law, relating to non-tariff restrictions on foreign-origin Equipment, with specific focus on Chinese-origin products.

The Federal Acquisition Regulation (FAR) implemented Section 822 of the Fiscal Year 2017 National Defense Authorization Act (NDAA) which requires contactors to submit additional certified cost or pricing data when only one offer is received in response to a competitive solicitation.  Certified cost and pricing data is required when the following three criteria are met:

GSA establishes the per diem rates for the lower 48 Continental United States (CONUS), which are the maximum allowances that federal employees are reimbursed for expenses incurred while on official travel.

Did you know that you can and should record your Intellectual Property such as Trademarks and Copyrights with Customs and Border Protection (CBP) using their e-Recordation system? Once you do so, CBP can help prevent the importation and exportation of infringing goods. In fact, you must record your IP with CBP because CBP cannot help you with infringing or counterfeit imports/exports if you don’t! This service is readily available here.  

We are expecting changes this year related to Emerging Technologies Export Controls. The Bureau of Industry and Security (BIS) is holding its’ annual conference this week on Export Controls in Washington, D.C. The theme of this year’s conference is “Emerging Technologies, Strategic Trade, and Global Threats”.  This event will cover:

Both the EAR and the ITAR regulate Deemed Exports. But what exactly is a Deemed Export and how is it different from a traditional export?

On December 18, 2018 the Administrative Judge, in ASBCA No. 61583, denied the contractor’s appeal and granted the Government’s request for summary judgement related to the contractor’s claim that it was entitled to a penalty waiver because the contractor did not demonstrate that it “had adequate policies, training, controls, and review systems, and that it inadvertently incorporated the [unallowable cost]” in its incurred cost proposals. This decision serves as a reminder of the importance of maintaining adequate policies and procedures.

A recent ASBCA decision (No 61583) confirms that Government benevolence does not extend to penalties associated with a contractor’s final indirect cost rate proposal (FICRP) which included expressly unallowable indirect costs. In one case, the issue was unallowable legal costs incurred as a result of the US Department of Justice (DOJ) investigation of the contractor, which was triggered by information suggesting that the contractor claimed indirect salaries for an individual whose services were as the housekeeper for the owners of the company and thus unallowable as costs allowable to Government contracts. 

Did you know that The International Traffic in Arms Regulations affects more than just exporters? You may need to register with the Directorate of Defense Trade Controls even if you do not export.

We have received a number of inquiries from clients related to cost allowability for Employee Stock Ownership Plans (ESOPs). In this Part II, we focus on the cost allowability rules and regulations for government contractors (Part I provided a more general description of ESOPs).