Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

Brad is a partner in Morrison Foerster’s Litigation Department, Managing Partner of the Austin office, and Chair of the firm’s Israel practice. He is the former Co-Chair of the firm’s Global Litigation Practice and the Government Contracts + Public Procurement Practice.

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In a decision sure to bring some comfort to contractors providing information technology equipment and services to the federal government, a U.S. district court

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U.S. District Court for the District of Columbia Finds That Alleged Cybersecurity Vulnerability Is Not Material Under False Claims Act

U.S. District Court for the District of Columbia Finds That Alleged Cybersecurity Vulnerability Is Not Material Under False Claims Act | Government Contracts Insights

Victoria Dalcourt Angle

In a decision sure to bring some comfort to contractors providing information technology equipment and services to the federal government, a U.S. district court judge recently granted a motion to dismiss a False Claims Act (FCA) suit, finding that the relator both failed to establish materiality under the FCA and failed to prove the necessary scienter on the part of the contractor.In <a href="https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2015cv0608-73" target="_blank" rel="noopener noreferrer">United States ex rel. Adams v. Dell Computer Corp</a>.,<a href="#_ftn1" name="_ftnref1">[1]</a> the relator, a self-described cybersecurity expert not affiliated with Dell, alleged that through his own independent testing methods he had uncovered a vulnerability in certain Dell computer systems.  Adams, the relator whom the government declined to join in this FCA action, argued that, by allowing this vulnerability to persist in computers furnished to the federal government, Dell had made false statements and had falsely certified compliance with government technology policies and requirements in violation of the False Claims Act.Ruling on a motion to dismiss, the court summarily dismissed the false statements count because the complaint did not allege with particularity any specific false statements made by Dell.In considering the second claim, the court acknowledged that the D.C. Circuit has accepted the “implied certification” theory under the FCA.  To establish implied false certification at the motion to dismiss stage, “a relator must allege that (1) defendant certified compliance with a particular contractual condition, (2) defendant failed to comply with that condition, (3) defendant knowingly misrepresented the noncompliance, and (4) compliance was a condition ‘material to the government’s decision to pay.’”<a href="#_ftn2" name="_ftnref2">[2]</a>In addressing whether the defect was, or could have been, material to the government’s decision to purchase the computer systems at issue, the court cited to the Supreme Court’s Escobar decision as creating a “demanding” standard for FCA materiality.<a href="#_ftn3" name="_ftnref3">[3]</a>  The court acknowledged the government’s interest in the security of the computer systems it purchases, as well as the existence of various federal government technology policies, but found that these factors were not sufficient to establish materiality.  The court found some ambiguity as to whether the government’s technology policies extended to the defendant but, even assuming they did, noted that the mere existence of a vulnerability was not enough to establish materiality.  The government’s cybersecurity policies do not specifically require defect-free products, but only computer systems with limited vulnerabilities and the means to remediate and mitigate any vulnerabilities that might appear.  The court also found somewhat persuasive the defendant’s argument that, even after the government was aware of the relator’s allegations, federal agencies continued to purchase the computer systems in question, further demonstrating lack of materiality.Additionally, the court found that the relator had not demonstrated that the company knew, or should have known, of the alleged defect, and therefore concluded that the FCA’s scienter requirement was not met.  In large part, the court found the relator’s claims that he was uniquely qualified to identify the vulnerability, and had only done so through complex testing using “unique methods and tools,” to call into question whether the company could have been aware of the vulnerability.  Even assuming knowledge on the part of the company’s engineers, however, the court determined that there was no reason to believe that the persons with knowledge of the alleged defect were also aware that the defect violated a material provision in agreements with federal government agencies.  The court stated that the FCA knowledge requirement required such a connection.In summary, this decision stands for the principle that a cybersecurity vulnerability that does not violate a federal contract’s explicit terms cannot form a sufficient basis for an FCA claim, particularly where that vulnerability is difficult to identify and test.  The case can be contrasted with other recent decisions finding that certifications made with respect to cybersecurity compliance with knowledge of, or reckless disregard with respect to, their falsity can form the basis of an FCA claim.<a href="#_ftn4" name="_ftnref4">[4]</a>  (See our <a href="https://govcon.mofo.com/defense/federal-court-confirms-that-cybersecurity-gaps-can-form-the-basis-of-false-claims-act-violations/#_ftn1" target="_blank" rel="noopener noreferrer">prior blog article</a> on this point.)While the current D.C. district court decision is a welcome one for contractors faced with potential FCA claims, government contractors should continue to take great care to comply with cybersecurity requirements, particularly those explicitly included in contract terms, to avoid exposure under the False Claims Act and the threat of contract claims or termination for default.<a href="#_ftnref1" name="_ftn1">[1]</a> United States ex rel. Adams v. Dell Computer Corp., No. 1:15-cv-608 (D.D.C. 2020).<a href="#_ftnref2" name="_ftn2">[2]</a> Id. at * 6, citing United States v. Sci. Applications Int’l Corp. (SAIC), 626 F.3d 1257, 1269-71 (D.C. Cir. 2010); Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989, 2001 (2016).<a href="#_ftnref3" name="_ftn3">[3]</a> Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989.<a href="#_ftnref4" name="_ftn4">[4]</a> See, e.g., United States ex rel. Brian Markus v. Aerojet Rocketdyne, Inc., 381 F.Supp.3d 1240 (E.D.Cal. 2019) (denying motion to dismiss of FCA claim where contractor was alleged to have falsely certified to compliance with cybersecurity requirements); United States ex rel. James Glenn v. Cisco Systems Inc., No. 1:11-cv-00400-RJA (W.D.N.Y. 2019) (complaint alleged FCA claims related to vulnerabilities in video surveillance software; Cisco settled the case with the Justice Department for $8.6 million).*Michaela Thornton contributed to this blog post. Michaela is a full-time law student at The George Washington University Law School and a Law Clerk with Morrison & Foerster’s government contracts practice group.

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