Practice/Industry Group Overview
Governments are among the largest consumers of goods and services, ranging from janitorial services, to cutting-edge information technology, to military and police hardware. Increasingly, governments are turning to the private sector to meet their needs, presenting reliable and lucrative opportunities for government contractors. Unlike commercial transactions, government contracts are typically highly regulated and have serious consequences for contractors who do not comply with the complex and changing rules of doing business with the government.
For years, Duane Morris attorneys have assisted clients seeking to do business with the government at the local, state, federal and international levels. We have extensive experience in government, in-house and private practice and are prepared to help clients navigate the highly regulated and technical issues that regularly arise in government procurement contracts.
Duane Morris offers a full range of litigation and counseling services on virtually every facet of government contracting and procurement, including:
- Bid protests
- Claims and disputes
- Intellectual property and data protection rights
- Subcontracting, joint ventures and strategic alliances
- White-collar crime and fraud
- Regulatory and transactional compliance
We represent government contractor clients providing goods and services in the following industries:
- Aerospace and defense
- Information technology and cyberspace
- Commercial items/General Services Administration (GSA) schedules
- Real estate
- Higher education, nonprofit, and other grant recipients
Range of Services
Bid Protest Litigation
Duane Morris attorneys have litigated pre- and post-award bid protests before contracting agencies, the Government Accountability Office (GAO), the U.S. Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit, including protests of classified procurements. As bid protests are increasingly used to open procurement opportunities or challenge improper bidding practices, we advise clients on how strategic bid protests can advance their goals, as well as when and how to intervene to protect contracts already awarded. As appropriate, we weigh and leverage the procedural advantages of the respective bid protest forums—automatic stays and/or temporary restraining orders. In short, we lay out the legal risks and benefits of a variety of approaches so that clients can make sound business decisions on when and how to protest unfavorable agency procurement decisions.
Claims and Disputes
Duane Morris represents clients in the wide array of claims and disputes that arise under government contracts, which are governed by specific rules, regulations and contract provisions not found in commercial litigation. Our experience includes assisting clients with claims involving cost disallowance, constructive changes, equitable adjustments, breaches of contract, change orders, defective pricing, price adjustments, defective specifications, defective government-furnished property and impossibility. We understand that government agencies are current and future customers, and we work to resolve disputes in a principled way that preserves business relationships. When litigation is unavoidable, we litigate claims before the Armed Services Board of Contract Appeals (ASBCA), the Civilian Board of Contract Appeals (CBCA), the U.S. Court of Federal Claims and the U.S. Court of Appeals for the Federal Circuit.
Capital Markets Transactions and Mergers & Acquisitions
Our practice draws on our experience in both the government and corporate arenas. Capital markets transactions can involve complex issues of federal government contracts and federal appropriations law, federal preemption and state laws governing security interests and perfected liens. The issues may be implicated through the federal government’s right to terminate contracts for convenience, exercise options and invoke set-off rights. Among other governmental rights and powers are anti-assignment restrictions, questions of agency authority and delegation, the scope of agency guarantees, the nature of the government’s payment obligations, potential government defenses to enforceability, and the full faith and credit of the United States. Our experience covers advice and representation in securities offerings backed by payment streams under government contracts, as well as both stock and bond offerings issued by government contractors.
Additionally, we counsel clients seeking to acquire, sell or fund business units that are government contractors. These transactions involving government contractors are subject to specific due diligence issues, such as data and privacy issues, security clearance matters, contract performance reviews and risk and liability assessments of the target company’s compliance procedures. To complete the transaction, we help obtain the necessary regulatory approvals and contract novations.
Compliance and Investigations
Companies that do business with the government are subject to heightened scrutiny and civil enforcement and criminal prosecution under a wide array of federal and state laws, including the Sherman Antitrust Act; the False Claims Act (FCA); the Wire and Mail Fraud Acts; the Foreign Corrupt Practices Act (FCPA); and securities, environmental and employment laws. Duane Morris attorneys craft robust corporate compliance programs designed for government contractors that reduce the risk of facing government investigations and enforcement actions.
In the course of routine self-audits or in response to specific allegations of noncompliance with government contracting law, regulations or rules, Duane Morris assists clients with internal investigations, which can greatly reduce the consequences of government involvement and enforcement actions. Through vigorous review, self-reporting and strong compliance programs, our goals are to avert government enforcement agencies from taking action or minimize any fines.
Should government enforcement agencies become involved, we work closely with clients and investigating agencies to ensure transparency and limit their risk of facing suspension, debarment and parallel proceedings with multiple government agencies. We endeavor to resolve any non-compliance issues quickly, with minimal disruption to and impact on our client’s business and reputation.
Suspension and Debarment
Debarment and suspension can have devastating consequences for companies that do business directly or indirectly with government agencies. A company listed on the government’s “Excluded Parties List System” (EPLS) becomes ineligible for new federal government work, federal export licenses and state and local contracts for a period of years. The federal government is taking an increasingly aggressive approach to debarring or suspending contractors. Contractors risk suspension or debarment if they have pleaded or have otherwise been found guilty of criminal conduct, or they fail to disclose to the government “credible evidence” of a violation of certain criminal fraud laws or the False Claims Act. Other grounds for suspension or debarment include false certifications of compliance with federal law or regulations ranging from the Buy American Act to the Davis-Bacon Act (DBA), as well as false certifications of responsibility or Disadvantaged Business Entity status.
Governments may not only terminate contracts for default, but they may also terminate contracts for the government’s convenience. Terminations, either for default or convenience, can be a challenge to navigate. We help clients respond to show cause/cure notices, thereby avoiding termination for default. Additionally, we negotiate with the government on behalf of clients to change a default termination to a termination for convenience, which reduces the contractor’s loss and liability. Duane Morris also assists clients with documenting and presenting termination costs and with terminating subcontracts if the prime contract is terminated.
Federal contractors are subject to a host of special employment and labor laws, regulations and compliance requirements, including the DBA; Service Contract Act (SCA); and affirmative action plan requirements for race, gender, disabilities and veterans status administered by the Office of Federal Contract Compliance Programs (OFCCP), as well as specialized federal contractor employee whistleblower protection laws. There are also a multitude of relatively new and ever-growing regulations and executive orders, including “Non-Displacement of Qualified Workers” and “Fair Pay and Safe Workplaces.”
Duane Morris counsels clients on all types of general employment and labor matters that government contractors face, including: guidance on hours worked; overtime, holiday and vacation pay; compliance with federal and state pay laws; employee terminations; discrimination claims; plant shut-down notification laws (WARN Act); covenants not to compete; nondisclosure agreements; employee handbooks; and myriad other traditional labor and employment issues that contractors encounter.
We offer training on preventive practices to avoid and minimize employee claims through sound human resources practices. Our attorneys handle litigation involving wrongful discharge claims, discrimination and sexual harassment matters in federal and state courts and before administrative agencies. We also advise unionized employers about collective bargaining, arbitration, strikes, secondary boycotts, contract administration and trust fund suits, and we advise non-union employers who are faced with union organizational activity.
International Procurement and Government Contracting
International procurement presents a range of issues involving sourcing and manufacturing; import and export regulations; foreign ownership, control and influence (FOCI); the propriety of certain payments; and similar topics. Our familiarity with pertinent laws, such as the Buy American and Trade Agreements Acts and the FCPA, as well as the laws and regulations governing imports, exports and foreign military sales, allows us to guide clients as they tackle national and international markets.
Duane Morris assists clients in complying with often-complex requirements of export controls and economic sanctions regulations, including the Department of State’s International Traffic in Arms Regulations (ITAR), the Department of Commerce’s Export Administration Regulations (EAR), Defense Federal Acquisition Regulation Supplement (DFARS) rules and the Office of Foreign Assets Control’s (OFAC) economic sanctions regulations. As government contractors can face stiff consequences for violations, including default termination and suspension and debarment, we work closely with our clients to ensure compliance in global transactions.
Foreign Corrupt Practices Act
The FCPA gives the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) far-reaching jurisdiction to combat foreign bribery and corruption or what they perceive to be foreign bribery and corruption. As the DOJ and the SEC continue to use the FCPA and the Dodd-Frank Act’s whistleblower bounty provisions to combat corruption, government contractors that conduct business internationally face an increased risk of costly investigations or enforcement actions. To minimize the FCPA risks inherent in international operations, the multidisciplinary Duane Morris FCPA Practice provides the full spectrum of preventive counseling and enforcement defense needed in today’s highly scrutinized global economy.
Our attorneys draw on experience gained from assisting government contractors in managing FCPA issues, as well as from previous service with the DOJ and SEC in high-profile cases. We routinely conduct FCPA-related due diligence for M&A transactions involving multiple foreign countries and also assist with the FCPA issues that can arise after a merger. Our work includes conducting internal investigations of possible FCPA violations on behalf of international companies and in cooperation with enforcement agencies.
White-Collar Crime and Fraud
The FCA remains one of the government’s most powerful enforcement tools, collecting billions of dollars in judgments each year, and it offers whistleblowers strong financial incentives to report fraud through qui tam suits. Duane Morris has extensive experience in working with the government to resolve FCA investigations and limit our client’s exposure, either through early settlement or vigorous litigation defense.
Intellectual Property Rights and Data Protection
Duane Morris has extensive experience counseling clients with respect to the intersection of government contracts and intellectual property rights. Government contractors face specific IP challenges, as a shifting and complex set of regulatory schemes determine IP rights. The FAR, DFARS and other statutory and regulatory provisions governing intellectual property rights are both complex and unforgiving. An act as seemingly innocuous as accepting a contract to develop a minor modification to an existing product, or failing to use an appropriate restrictive legend, can have the unintended consequence of allowing the government to use your intellectual property for competitive procurement purposes, or even to reverse-engineer or decompile your proprietary computer software. We help clients navigate safely through the complex government contract procurement process, including compliance with the Bayh-Dole Act, identification and protection of technical data, compliance with the Department of Commerce’s EAR, modifications to DFARS provisions and indemnification for patent infringement under 28 U.S.C. § 1498. We draft intellectual property licenses related to patents, trademarks, copyrights and technical data rights pursuant to government contract requirements. Following successful award of a government contract, we respond to Freedom of Information Act (FOIA) requests issued to the government entity awarding the contract and seeking our client’s intellectual property or other competitively sensitive data.
Unique Military Programs: Nonappropriated Fund Instrumentalities (NAFI) and Military Base Realignment and Closure (BRAC)
Most government contracts use funds appropriated by Congress that are recorded by the U.S. Treasury. However, there are government organizations that act as a fiscal entity by contracting for goods and services to support government employees and their families, such as lodging, restaurants, sale of commercial goods and certain services that include the Army & Air Force Exchange Service (AAFES), Navy Exchange Service Command (NEXCOM) and Morale, Welfare and Recreation (MWR) programs. Despite its government function, not all entities follow standard procurement rules and each has its own policies, procedures, instructions, rules and directives that prospective contractors and service providers must follow, along with applicable federal laws and regulations.
At various times, the U.S. military attempts to improve its efficiency through massive, widespread base closures and the relocation of thousands of military personnel throughout the world. These operations basically close and/or open small cities in a very short period of time, and the costs associated with them are in the tens of billions for various service and supply contracts that cross many sector lines, such as construction, energy, environmental, transportation and healthcare.
Duane Morris helps our clients understand these complex requirements and regulations in an effort to maximize the chance of a successful bid or resolve issues during contract administration.
National and Homeland Security
The federal government has increased purchases of goods and services to support enhanced Homeland Security efforts to strengthen law enforcement and intelligence agencies in the war against terrorism. Our attorneys provide legal counseling to numerous contractors that offer products and services to all levels of government. Duane Morris helps these clients to comply with the new statutes and to understand how this legislation affects their businesses as they explore new markets and develop proposals to address federal, state and local needs in this area. We also introduce and discuss statutory and regulatory tools that are available to third-party suppliers to reduce or eliminate liability exposure in the wake of a terrorist attack.
Governments, at all levels, occasionally spin off certain commercially viable functions into private or quasi-private entities. We represent companies, as well as federal and state agencies, relating to the privatization of government activities, organizations and functions, including water and wastewater, environmental remediation, military housing, highways and infrastructure, and operations and maintenance. Our lawyers have drafted and negotiated applicable terms and conditions, assisted in pricing and reviewed relevant legislation and regulations to facilitate completion of the transaction.
Public-Private Partnerships (P3s)
Public infrastructure is increasingly being designed, financed, built and managed through public-private partnerships (P3s). Duane Morris lawyers have skillfully negotiated arrangements in a variety of infrastructure projects and are experienced in working with all levels of government, as well as related parties involved in infrastructure projects. We work with government agencies, developers, service providers, construction companies, environmental and engineering companies, investors, lenders and other private-sector parties to structure financing, negotiate and document agreements and ensure regulatory compliance in P3s projects.
Duane Morris counsels clients concerning the requirements of the Small Business Administration (SBA), Department of Defense (DOD), Department of Veterans Affairs (VA) and other agency programs designed to benefit the various categories of small businesses. We help clients structure their businesses and operations to maximize the advantage of applicable programs, while avoiding running afoul of the many intricate program requirements and substantial penalties, including suspension and debarment, for violating the applicable rules.
Duane Morris Government Strategies (DMGS), the firm’s independent lobbying and government relations affiliate, is a full-service government relations firm. Unlike most other lobbying firms, DMGS works at all levels of government and on both sides of the aisle. The principals serve or have served in local, state and federal government positions and have the experience, skill and relationships to ensure that legislators in Washington understand and fight for realistic and sound oversight. DMGS has worked with a variety of clients and have been successful in lobbying key elected and agency officials to achieve objectives for clients.
DMGS’ understanding of government buying practices and compliance protocols and solid relationships at all levels of government give its clients an advantage when navigating this complex process. DMGS knows the essentials of winning government contracts, such as how best to market and sell services and products and how to put multiple contract vehicles—including GSA schedules—in place that enable government customers to purchase from a company. Additionally, DMGS’ Procurement team understands how to establish contractual relationships with federal agencies to facilitate research and development, as well as non-dilutive investments to establish and commercialize technologies, processes and solutions.
Sale of Goods and Services: DMGS performs detailed tasks to deliver results to its procurement clients. These tasks and supporting processes are designed to ultimately identify opportunities for clients to increase sales in the federal marketplace by best use of their sales and marketing resources. DMGS’ proven process is designed to identify opportunities as far in advance of the RFP process as possible.
Non-Dilutive Development Funding: DMGS provides consulting services related to identifying and capturing non-dilutive federal Research, Development, Test & Evaluation (RDT&E) funds. The firm uses a formula driven by client criteria matching to government program criteria in order to measure the potential for successful capture of funding. This process allows DMGS to pinpoint specific potential funding sources.
Grants, Cooperative Agreements and Other Social Government Programs
As funds are available through new discretionary grant competitions related to the American Recovery and Reinvestment Act, the Departments of Energy and Homeland Security and other federal agencies, it is an ideal time to match business goals with a grant writing team that has the experience and knowledge in these fields. DMGS offers grant proposal writing services that comprise the collaborative planning of the grant and development of the full narrative and will work to write a comprehensive package that includes detailed budgets and mission statements.
Duane Morris Government Strategies has years of experience identifying, qualifying, pursuing and securing grants at the federal, state and local levels of government, as well as with foundation, corporate and private funding. DMGS’ Grant Strategies Division provides three basic services: grant monitoring, grant writing and grant development. Through experience with various programs, DMGS can be a valuable partner in identifying eligible costs and project needs, drafting first-rate applications and monitoring the grant process throughout its duration.
- Represented a bidder in one of the largest bid protests in New Jersey history — the contract to operate the state lottery — resulting in the overturning of an award to our client's competitor and a re-bid of the contract.
- Serve as outside procurement counsel to a major bus manufacturer on all of its government procurement matters, including overturning two local government awards, resulting in an award of more than $100 million in contracts to our client.
- Represented a transit advertiser in a suit against a regional transportation agency; action resulted in the agency's decision to extend our client's contract rather than soliciting a new vendor.
- Represented a contractor in a bid protest to overturn a "sole-source" procurement for Army helicopters. Army withdrew procurement within two days of filing of bid protest with the Government Accounting Office.
- Represented the U.S. Department of Agriculture in the privatization of the Graduate School; transaction involved the transfer of all of the assets and liabilities of the school to a nonprofit entity while maintaining the school's educational mission.
- Represented Lockheed Martin Corp. in opposing an effort by Zoltek Corp. to substitute it as a defendant in a patent-infringement action Zoltek had originally brought against the United States stemming from the U.S.'s alleged use of Zoltek's patent in the manufacture of the F-22 fighter plane. Obtained a decision from the U.S. Court of Appeal for the Federal Circuit allowing it to seek an interlocutory appeal of a Court of Federal Claim's decision that Lockheed was not protected by government-contractor immunity pursuant to 28 U.S.C. §1498.
- Represented a defense and intelligence contractor in its sale to American Management Systems for $42 million in cash.