Commerciality: Establishing pricing to the federal government

By Skyler Handl, Corporate Counsel, Public Sector

Selling to public sector customers is different from selling to the commercial market. For example, how much do you know about the government acquisition concept of “commerciality”? To preserve margins in government sales, you need to know how to comply with this concept.

Public sector customers typically require vendors to disclose cost data and then negotiate a profit, or “fee.” This flows through the entire government acquisition supply chain.

Commerciality was introduced as an exception to the general rule of cost disclosure to streamline government acquisition of commercial technology through requirements aligned to commercial market practices. Commercial technology is vetted by the open market, which mitigates risk, and reduces the expense of government acquisitions as development costs are spread across the commercial market. You wouldn’t expect to pay a one-time non-recurring engineering fee for the latest cellphone; it is baked into the price.

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New Requirement for Software Deliverables to Comply with NIST 800-218

By Skyler Handl, Corporate Counsel, Public Sector

On September 14, 2022, OMB took a substantial step forward in implementing EO 14028 Improving the Nation’s Cybersecurity by issuing memorandum M-22-18. This memorandum requires agency leaders to comply with NIST Secure Software Development Framework (SSDF), SP 800- 218,3 and the NIST Software Supply Chain Security Guidance with regards to third-party software in agency information systems. This applies to software developed or modified by major changes after September 14, 2022, regardless of whether the software is a commercial product or COTS item.

How does this impact your business?

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The rise of DPAS rated orders and how to handle them

By Skyler Handl, Corporate Counsel, Public Sector

Your marketing strategy may focus on one thing, but the government’s increasing application of the Defense Production Act may have other plans for you. If your government business has a manufacturing component, it’s important to be able to navigate this legislation.

The COVID-19 pandemic and ensuing supply chain shortages have put a spotlight on Defense Production Act (DPA) 15 C.F.R. Part 700.  Enacted in 1950, this post World War II era legislation grants the U.S. government authority to jump to the front of the line in acquiring goods or services required to meet national defense requirements and promote “emergency preparedness.” The Department of Defense issues approximately 300,000 DPAS (Defense Priorities and Allocation Systems) rated orders annually. While traditionally used for military and national security acquisitions, the DPA recently made national news for its use by the U.S. government to acquire personal protective equipment (PPE) and baby formula. It has even been invoked as a possible way to get gas and oil prices under control.

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ESG contract stipulations are becoming common. Are you prepared?

By Skyler Handl, Corporate Counsel, Public Sector

How familiar are you with new Environmental, Social, and Governance (ESG) policies in the U.S. and abroad? For public sector companies, staying current with these new requirements will be an important part of remaining competitive.

ESG has become popular recently in the commercial investor market, but it actually has been a long-time staple in government contracting. For decades the U.S. government promoted public policy aligned to ESG objectives through the inclusion of contract and subcontract requirements to combat human trafficking (FAR 52.222-50), promote small and diverse business (FAR 52.219-9) and to utilize energy efficient products (FAR 52.223-15). Social and Governance objectives have historically impacted contractor responsibility and qualification under FAR Part 9, and have been weighted factors in evaluation criteria during best value competitions with specific attention for exceptional small and diverse business plans.

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