Government Contracts and Public Procurement
McDermott Will & Emery’s Government Contracts and Public Procurement Practice Group has broad experience in all aspects of United States and the European public contracts. The group has a sophisticated practice with respect to United States federal, state and local government procurement and the European public procurement regime (both utilities and public sector). The Government Contracts and Public Procurement Practice Group includes partners who served as counsel to Congressional committees responsible for the creation of many of the U.S. procurement laws and regulations or held senior positions in the Executive Branch.
In the United States, our lawyers regularly represent clients before U.S. courts, agency boards of contract appeals, the General Accountability Administration, and the Court of Federal Claims. In Europe, our lawyers are experts on the case law of the European Courts on the European public procurement rules. They also advise on these rules as implemented at national level. For example, our lawyers were retained by the European Commission to review UK and Spanish legislation implementing the European Union rules, and to advise on the public procurement rules applicable to government and utilities services contracts. The U.S. group is headquartered in Washington, D.C. and the European Group in Brussels. McDermott also has lawyers with significant public procurement experience in its Chicago, London, Los Angeles, Munich and Brussels offices. Government contracts are a market with great potential and even greater legal and business challenges.
U.S. Government Contracts
The executive agencies of the United States government spend hundreds of billions of dollars annually to purchase an incredible range of goods and services. The government’s ability to acquire the goods and services it requires is governed by laws and regulations intended to promote fair and open competition prior to a contract being awarded, and are intended to ensure that the goods and/or services sold comply with the government’s stated requirements. Further, many of the laws that govern U.S. federal government contracts are complicated because they also seek to promote various societal, economic and international trade goals.
Whether the matter involves a General Services Administration (GSA) Schedule contract for office supplies or a multi-year contract with the Department of Defense or Homeland Security for computer systems, the lawyers in McDermott Will & Emery’s Government Contract Practice Group have the background and experience to provide “cradle-to-grave” guidance and legal representation with respect to the various stages, as well as all aspects, of a U.S. Government contract and subcontract. Our lawyers are well versed in the laws governing U.S. Government contracts, including the Contract Disputes Act (CDA), the Competition in Contracting Act (CICA), the Truth in Negotiations Act (TINA), the Anti-Kickback Act, the Procurement Integrity Act (PIA), the False Claims Act (FCA), Equal Employment Opportunity (E.O. 11246), the Fair Labor Standards Act (FLA), the Small Business Act, the Buy American Act (BAA) and the Trade Agreements Act (TAA), and many others.
Bid and Proposal
At the bid and proposal phase, McDermott lawyers provide advice on teaming agreements, joint ventures and proposal preparation. Where defects may exist in a solicitation or a client’s proposal is not selected for award and problems exist in the selection process, our lawyers provide strategic advice on whether a bid protest should be filed with the Executive Agency responsible for issuing the solicitation, the General Accountability Administration or the Court of Federal Claims. Our lawyers routinely represent our clients in successful defective and post-award solicitation protests.
Contract Administration and Disputes
McDermott lawyers provide advice and guidance with respect to prime contract administration and compliance, subcontracting agreements and dispute resolution. We provide strategic advice and guidance to clients where contract performance may not be in compliance with statue, regulation or contract terms and whether the degree of such noncompliance may require voluntary disclosure to the federal government.
Examples of the types of usual government contract services offered by McDermott lawyers include:
Disputes and Resolution
During the course of performance of a contract, a difference may arise between the government and the contractor on any number of issues including whether contract performance has met contract requirements, whether work requested by the government was within the scope of the contract requirements and whether the contractor is entitled to an equitable adjustment. The United States government’s termination of a contract for default will adversely affect a client’s ability to obtain future contracts from the government. McDermott lawyers have assisted clients in successfully responding to show cause letters and notices of intent to terminate for default. Such efforts have permitted the client to continue performance or negotiate a more favorable termination for convenience or no-cost termination. We have successfully represented clients under the Contract Disputes Act before the civilian and defense boards of contract appeals and the Court of Federal Claims.
Government Investigations:
McDermott lawyers have extensive experience responding to investigations conducted by the OIG under the Inspector General Act. Under this Act, each federal agency’s Office of Inspector General (OIG) is empowered to conduct independent and objective audits, investigations and inspections, prevent and detect waste, fraud and abuse, and promote economy, effectiveness and efficiency. Under the IG Act, the OIG has the power to subpoena a government contractor’s records where an allegation of waste, fraud or abuse has been received by the OIG with respect to contract performance. The OIG may commence an investigation as the result of a “hotline” call or because the Department of Justice or a whistleblower has filed a False Claims Act complaint.
McDermott lawyers have extensive experience in handling false claims matters including alleged violations of the False Claims Act by non-U.S. corporations providing goods and services to military bases and executive agency offices located outside of the continental United States. McDermott has handled False Claims Act cases involving allegations of defective pricing, mischarging and/or overcharging, false TAA certifications and Medicare/Medicaid overcharging.
Procurement Integrity Act, “Revolving Door” Restrictions and the Anti-Kickback Act
McDermott lawyers guide our clients in complying with the procurement integrity and standards of ethical conduct requirements. We provide advice to clients who are contemplating making an offer of employment to a current or former federal government employee whether an offer of employment may be made and/or the scope of the duties that may be undertaken by a former federal government employee. In addition, McDermott lawyers provide strategic counsel, including in-house seminars, on the statutes and regulations that limit gifts and gratuities that may be offered to, and accepted by, current federal government employees, contractor employees and/or subcontractor employees and what information constitutes prohibited “bid and proposal” and “source selection” information. McDermott routinely defends clients accused of violating these rules in civil and criminal investigations.
Contract Financing, Mergers and Acquisitions:
McDermott lawyers understand the unique aspects and due diligence requirements involved in financing a United States government contract, the acquisition of a business whose contract portfolio includes government contracts or the acquisition of only those business assets that perform government contracts and the contracts themselves. Similarly, where an acquisition of a business with government contracts is contemplated, McDermott lawyers have substantial experience in evaluating a business’s government contract assets including the potential value and risks of such assets. Additionally, McDermott is able to provide the full breadth of guidance and advice with respect to mergers, acquisitions, joint ventures and other strategic business alliances in the areas of taxation, intellectual property, export control and antitrust.
Contractor and Government Rights to Contract Data and Intellectual Property
Where intellectual property is developed, conceived or reduced to practice at government, as opposed to private, expense, the United States government obtains unlimited rights in such intellectual property. Many of our lawyers hold degrees in a wide variety of technical fields who are capable of handling intellectual property matters in almost every technical or scientific discipline. McDermott’s lawyers have substantial experience in the best methods to protect rights in intellectual property and, as a result, limit the rights granted to the United States government, and/or prime contractors, under a contract with United States government. McDermott lawyers draft, review and advise clients on nondisclosure and confidentiality agreements, intellectual property and software licensing agreements, teaming and joint venture agreements, Cooperative Research and Development Agreements (CRADAs) and grant agreements and other transactions. McDermott litigates on behalf of clients who seek to enforce or protect their intellectual property rights and/or trade secrets.
Small Business Contracting Goals
To promote and sustain small and small disadvantaged businesses, the Small Business Administration (SBA) requires that a certain dollar percentage of each United States executive agency’s contracts awarded be awarded to small and small disadvantaged businesses. Each federal agency enters into an agreement with the SBA as to the percentage of contracts that will be awarded to small and small, disadvantaged businesses each fiscal year. In turn, these federal agencies pass these requirements on to the large businesses which are awarded contracts with the federal government. McDermott lawyers assist large business clients in putting together Small Business Subcontracting Plans. We also provide advise and assistance to small and large business clients with respect to the SBA’s Mentor-Protégé Program and the advantages and disadvantages of joint ventures formed between large business mentors and small business protégés. McDermott lawyers draft, review and advise clients on joint venture agreements under the Small Business Administration’s Mentor-Protégé Program as well as SBA programs.
Equal Employment Opportunity Requirements
McDermott lawyers assist our clients, including those who get the Department of Labor, Office of Federal Contract Compliance Programs’ (OFCCP) 30-day audit letter, by either establishing that the client is not a covered entity or, with the help of statistical consultants, updating (or assembling from scratch) Affirmative Action Programs (AAP) and related materials. The Firm has the knowledge and experience to assist our clients through the OFCCP’s audit, either to a clean bill or a conciliation agreement. We have successfully defended against complaints of discrimination. McDermott lawyers have represented government contractors in front of various government agencies, including state and federal departments of labor and the OFCCP. McDermott lawyers have helped clients develop policies and procedures and evaluate the advisability of securing United States government contracts and/or subcontracts.
State and Local Government Contracts
State and local governments have enacted statutes and ordinances to govern their procurement processes and to assure their citizens that public procurements conducted by states and localities are fair and open. As with the federal government, more and more state and local governments are enacting laws to promote socio-economic goals for the public contracts they award. McDermott lawyers routinely provide advice to our clients on proposal strategies, bid protest issues and compliance with state and local requirements.
European Union Public Contracts
The EU procurement rules are founded on the EC Treaty’s internal market rules. These are aimed at the free movement of goods, services and capital across the borders of all Community Member States. In general, these prohibit conduct in government procurement that hinders contractors from other Member States (including GPA States) from access to government markets. In addition, State bodies and entities in the utilities sector are required to conduct procurement in a transparent manner.
The EU procurement rules require competitive tendering for contracts above a certain value placed by the State, State bodies, including State healthcare bodies or by certain utilities. Where the EU procurement rules are for some reason inapplicable, the European Court of Justice has confirmed that the internal market rules of the EC Treaty rules may nevertheless apply to contracts having a sufficient connection with the functioning of the internal market. The internal market rules of the EC Treaty include the free movement of goods, the right of establishment, the freedom to provide services, non discrimination and equal treatment, transparency, proportionality and mutual recognition. Knowledge of the EU procurement rules and the EC Treaty requirements is essential when working in accession states.
State bodies in Europe are increasingly seeking to procure goods and services from external third party providers, based both within and outside Europe. Our lawyers can provide advice at all stages of negotiation of State procurement arrangements. Such arrangements often begin with a tender process which may be structured in a number of ways pursuant to the relevant European Union procurement directives. We advise service providers and product suppliers on the legal and commercial issues involved in the submission of bid documents outlining their proposals for provision of relevant services following the issue of invitations to tender by relevant public entities. The European Directives are implemented at national level and our lawyers are able to co-ordinate the provision of advice on procedures and remedies at national level.
Disputes and Resolution in the tendering process
During the procurement process, many different issues may arise. Currently, a serious issue under EU law is the extent to which bodies subject to the procurement rules can award direct contracts without any tendering process whatsoever. The existing exceptions allowing direct awards have been restrictively interpreted by the European Court of Justice. Other issues arise over the choice of procurement procedure, particularly in the context of public private partnership arrangements, the use of framework agreements, the selection and award criteria that can be used as well as technical specifications (standards), performance or functional requirements. Breaches of the public procurement rules can be challenged both at national and EU level. The EU Remedies Directive sets out the circumstances in which legal actions arise and the remedies that must be available to aggrieved bidders at national level. The required remedies include interim measures, orders setting aside a decision or action and damages. While EU law requires these remedies to be available to contractors under national law, other administrative and/or private law remedies may also be available. For contracts falling within the scope of the procurement rules and/or the EC Treaty rules, another option is to lodge a complaint with the European Commission which has the power to take legal action against Member States directly. McDermott lawyers have assisted clients to litigate on irregular tendering procedures, complaints to the European Commission as well as alternative solutions.
Mandatory exclusion from procurement contracts
The EU procurement rules were revised in 2004 and now include grounds for mandatory exclusion from government contracts in case of convictions for: corruption; fraud; money laundering and participation in a criminal organisation. These requirements are uncertain, with Member States being required to specify the implementing conditions in accordance with their national law but having significant discretion in their implementation, such as over the time during which disqualifications will apply. Consequently, advice is required on the application of these rules and litigation is likely in the coming years.
Contacts
- Holly A. Roth
+1 202 756 8396
Send E-mail - Stephen M. Ryan
+1 202 756 8333
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