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.

J. Alex Ward

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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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The Tortured Regulations Department: SBA’s New Rule and Its Effect on Investments

Bid Protest Spotlight: Standing, Relationships, Responsibility

House’s Passage of the SAMOSA Act Signals Policy Shift Towards Government-Wide Enterprise Software Licensing

New DFARS Regulation on Small Business Affiliate Past Performance

Bid Protest Spotlight: Unclear Criteria, Data Rights, Conflicts

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Infusing billions of dollars into the U.S. semiconductor industry and appropriating billions more for scientific research and development, what is now colloquially referred to as the <a href="https://www.congress.gov/117/bills/hr4346/BILLS-117hr4346enr.pdf" target="_blank">CHIPS and Science Act of 2022</a> was signed into law by President Biden on August 9, 2022. According to the White House, the Act aims to “strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future,” to help America “win the race for the 21st century.” <a href="about:blank">[1]</a> The Act has two parts, the first, cleverly named Creating Helpful Incentives to Produce Semiconductors (“CHIPS” Act), authorizes more than $50 billion in federal funding to bolster domestic semiconductor and microchip manufacturing and research. The second and larger division, the Research and Development, Competition, and Innovation Act (now just called the “Science Act”), infuses $170 billion in new research and innovation funding to a variety of federal agencies. Many of those funds, in turn, will be available to contractors and grantees searching for additional monies to support research and development initiatives.The CHIPS ActThe CHIPS Act provides $52.7 billion over five years to accelerate semiconductor research, development, manufacturing, and workforce development. The funding has been allocated to select agencies as follows:<div data-reactroot=""><img src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/bltd642a55ba94668b5/630cf30a847c967c7c96bd27/220826-chips-chart1.jpg?format=auto&amp;quality=60" alt="CHIPS chart"/></div>* Estimate only; tax credit not included in $52.7 billion appropriation.One somewhat controversial aspect of the CHIPS Act is the claw-back provision included in the tax credit incentive. The Act creates a 25 percent tax credit for investments in semiconductor manufacturing, including the manufacturing of specialized tooling required for chip production. The claw-back provision prevents recipients of these incentive funds from expanding or building new manufacturing capacity or making other “significant transactions” that support semiconductor industries in “countries of concern” (currently defined to include China, Russia, Iran, and North Korea) for ten years, lest they face enforcement action by Commerce to recover all incentives provided. Details remain murky, however, as Commerce will need to enact implementing regulations to define relevant terms and determine the details around how these guardrails will work.Priorities for implementation are emerging. On August 25, 2022, President Biden issued an <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/08/25/executive-order-on-the-implementation-of-the-chips-act-of-2022/">Executive Order</a> that set forth the administration's priorities, to be reached through collaboration between the White House; State, local, tribal, and territorial governments; the private sector; research universities; labor unions; and our allied countries. These priorities include:<ul><li>Protecting taxpayer resources by ensuring that funding recipients will be held accountable for compliance with funding opportunity requirements;</li><li>Meeting economic, sustainability, and national security needs, including by building domestic microelectronic manufacturing capacity;</li><li>Ensuring long-term leadership in the microelectronics sector, through support for research and innovation;</li><li>Catalyzing private-sector investment in production, breakthrough technologies, and worker and workforce development;</li><li>Generating benefits impacting a wide range of stakeholders, including the traditionally underserved, through creation of well-paying, high-skilled union jobs and opportunities for startups, small businesses, and minority-owned, veteran-owned, and women-owned businesses and by partnering with State, local, tribal, and territorial governments and with institutions of higher education; and</li><li>Strengthening and expanding regional manufacturing and innovation ecosystems, including by investing in suppliers, manufacturers, workforce development, basic and translational research, and related infrastructure and cybersecurity throughout the microelectronics supply chain.</li></ul>The Executive Order also established a Steering Council to coordinate CHIPS Act-related policy. The Council will be co-chaired by the Assistant to the President for Economic Policy, the Assistant to the President for National Security Affairs, and the Director of the Office of Science and Technology Policy. Other Steering Committee members will include a wide cross-section of government agency representatives, including the Secretaries of State, Treasury, Defense, Commerce, Labor, and Energy; the Director of the Office of Management and Budget; the Administrator of the Small Business Administration; the Director of National Intelligence; the Assistant to the President for Domestic Policy; the Chair of the Council of Economic Advisers; the National Cyber Director; and the Director of the National Science Foundation.The Science ActThe Science Act, heralded as “the largest five-year investment in public R&D in the nation’s history,” provides four federal agencies with nearly $170 billion to support “curiosity driven” and “use-inspired and translational” research and development. <a href="about:blank">[2]</a> The passage of the Science Act marks the reversal of an unfortunate trend of diminishing federal R&D spending, both as a percentage of GDP and in comparison with other advanced economies. Among the goals of the Science Act, in addition to general advancement of research, are the creation of new technology hubs, increasing participation in research by underrepresented populations and geographies, and bolstering efforts to combat theft of U.S. intellectual property. As with the CHIPS Act, where the Science Act establishes new programs or initiatives, federal agencies will need to promulgate implementing regulations before dispensing the authorized funds.The following chart illustrates the breakdown of new funding for four recipient agencies:<div data-reactroot=""><img src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/blt1b8351e671693ab2/630cf38e1ee78a063c5972f8/220826-chips-chart2.jpg?format=auto&amp;quality=60" alt="CHIPS chart"/></div>* The Science Act extends authorization and support for several existing NASA programs, including the Artemis Moon Program and International Space Station, but does not authorize new funding. The Science Act creates some new opportunities for government contractors and grant recipients. Some of the new and expanded areas of R&D funding are:<ul><li>An NSF Directorate for Technology, Innovation, and Partnerships to invest in strategic translational science, including artificial intelligence, quantum computing, advanced manufacturing, 6G communications, energy, materials science, and other critical technologies ($20 billion);</li><li>NSF studies of ocean acidification activities, including long-term data stewardship and access to ocean and coastal acidification data ($20 billion);</li><li>NIST work to advance research and standards in quantum information science, artificial intelligence, cybersecurity, advanced communications technologies, and semiconductors ($6.9 billion);</li><li>Tripled NIST funding for the Manufacturing Extension Partnership, to support small- and medium-sized manufacturers with cybersecurity, workforce training, and supply chain resiliency ($2.23 billion);</li><li>A NIST National Supply Chain Database to assist the businesses with supplier scouting, with the goal of minimizing supply chain disruptions;</li><li>Commerce to create 20 “regional technology and innovation hubs” in areas that are not leading technology centers, focused on technology development, job creation, and expanding U.S. innovation capacity ($10 billion);</li><li>DOE basic energy research programs for artificial photosynthesis, energy storage, nuclear matter, and carbon materials and sequestration to advance energy technologies ($14.5 billion);</li><li>DOE research, development, and demonstration in building technologies, sustainable transportation, advanced manufacturing, industrial emissions reduction technology, advanced materials, and renewable power ($11.2 billion);</li><li>DOE High Energy Physics Program ($6.5 billion);</li><li>DOE Advanced Scientific Computing Research Program for high-end computing systems and computer sciences research ($6 billion);</li><li>DOE Fusion Energy Sciences Program ($5 billion); and</li><li>DOE Biological and Environmental Research program for earth and environmental systems, including the development of engineered ecosystems ($4.5 billion).</li></ul>‎ConclusionThe CHIPS Act marks a shift in federal policy regarding industrial subsidies. Long averse to the potentially market-distorting subsidies favored by other countries, the United States has now embraced the mechanism (at least for this critical sector of the economy). The Science Act is the most comprehensive infusion of resources into research and development in a long while. Significant opportunities for businesses and research institutions will arise from this legislation. We will carefully monitor proposed and final implementing regulations, and track where agencies allocate funding, and what opportunities, inventions and discoveries can be attributed to these programs.<a href="about:blank">[1]</a> Office of the White House, FACT SHEET: CHIPS and Science Act Will Lower Costs, Create Jobs, Strengthen Supply Chains, and Counter China (August 9, 2022).<a href="about:blank">[2]</a> The CHIPS and Science Act Fact Sheet as prepared by House Leadership

CHIPS and Science Act Makes Available Billions of Dollars for the United States Science and Technology Sectors

Tina is a partner in Morrison & Foerster’s Government Contracts practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmace

Tina Reynolds

Associate

Markus Speidel is an associate in Morrison & Foerster’s Government Contracts & Public Procurement group, in Washington, D.C. Markus assists clients across a wide range of contract matters, including contract claims and disputes, bid protests, compliance counseling, and investigations.

Markus Gerhard Speidel

Markus Speidel

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CHIPS and Science Act Makes Available Billions of Dollars for the United States Science and Technology Sectors

Supreme Court Removes “Substantial Competitive Harm” Requirement for Contractors Seeking to Protect Confidential Information from Release Under FOIA

Infusing billions of dollars into the U.S. semiconductor industry and appropriating billions more for scientific research and development, what is now colloquially referred to as the CHIPS and Science Act of 2022 was signed into law by President Biden on August 9, 2022. 

The Biomedical Advanced Research and Development Authority (<a href="https://www.medicalcountermeasures.gov/">BARDA</a>), part of the U.S Department of Health and Human Services, Office of the Assistant Secretary for Preparedness and Response, has modified an existing broad agency announcement (BAA) through which it will award government funding to companies seeking to develop products designed to diagnose, prevent or treat coronavirus infections.Current OpportunityOn March 4, 2020, BARDA revised a pre-existing BAA to solicit proposals for COVID-19 diagnostic tests, vaccines, medicines such as therapeutics or antivirals (to either help prevent or to treat infections), and respiratory devices and ventilators.  A further revised version, BAA‑18‑100-SOL-00003, Amendment 14, was issued on March 9, 2020.  The current BAA requests COVID-19 related proposals by April 30.  (The BAA also has subsequent submission dates of July 31 and October 31, 2020, with the latter being the latest possible submission date for this BAA.)The Areas of Interest included in the amended BAA are:<ul><li>AOI 7.7.1 Diagnostic assay for human Coronavirus using existing FDA-cleared platforms</li><li>AOI 7.7.2 Point-of-care diagnostic assay for detection of SARS-CoV-2 virus</li><li>AOI 7.7.3 Diagnostic assay for detection of COVID-19 disease (SARS-CoV-2 infection)</li><li>AOI 8.3 COVID-19 Vaccine</li><li>AOI 9.2 COVID-19 Therapeutics</li><li>AOI 9.3 Immunomodulators or therapeutics targeting lung repair</li><li>AOI 9.5 Pre-exposure and post-exposure prophylaxis</li><li>AOI 10 Respiratory protective devices</li><li>AOI 11 Ventilators</li><li>AOI 17 Advanced Manufacturing Technologies</li></ul>Initial proposals are to take the form of a “Quad Chart” and a brief White Paper.  Quad charts must follow this format and include a visual depiction and description of the effort, objectives, benefits, milestones, and other requested information.  The White Paper is intended to provide a brief technical discussion of the offeror’s objective, approach, level of effort, and the nature and extent of the anticipated results.  (The full Quad Chart and White Paper requirements are described in the BAA-18-100-SOL-00003, Amendment 14, beginning at page 62.)Related Government EffortsBARDA is also facilitating a parallel, consolidated U.S. government <a href="https://www.medicalcountermeasures.gov/app/barda/coronavirus.aspx">website</a> for companies to submit brief descriptions of their diagnostics, therapeutics, vaccines, and other products or technologies being developed for COVID-19.  According to the site, it is intended as “a portal for the U.S. government 2019 novel Coronavirus (2019-nCoV) medical countermeasures task force to provide a single point of entry for the submission of market research packages from interested stakeholders.”In addition, BARDA opened a special, expedited broad agency announcement, an EZ-BAA, seeking diagnostics that use platforms already cleared by the FDA, such that these products could be authorized for use in as soon as 12 weeks.  If the government can identify products and technologies that have progressed beyond non-clinical studies, have established domestic large‑scale commercial Good Manufacturing Practices (cGMP) manufacturing capability, and have utilized a platform used to manufacture a product already approved by the FDA, that will significantly expedite time to market. Relatedly, the U.S. Food and Drug Administration (FDA) has issued two <a href="https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization">emergency use authorizations</a> (EUA) of diagnostic tests from the Centers for Disease Control and Prevention (CDC) and the NYS Wadsworth Center.  An EUA is a unique authorization that enables the FDA to authorize otherwise unapproved products for use in a public health emergency.  That emergency was officially declared on February 3, 2020, opening the door for EUA submissions and authorizations to deal with the COVID-19 pandemic.  In addition, FDA also issued a <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-new-policy-help-expedite-availability-diagnostics">new policy</a> on February 29 to help expedite the availability of diagnostic tools created laboratories certified under the Clinical Laboratory Improvement Amendments of 1988 (CLIA), 42 U.S.C. §263a to develop or offer high complexity tests.In addition, we understand that at least two companies are currently developing Coronavirus vaccines with assistance from BARDA and that another is working with the government on a treatment for people who are already sick.Additional BackgroundFor those unfamiliar with the organization, BARDA is a federal sub-agency tasked with the procurement and development of countermeasures against bioterrorism (also including chemical, nuclear, and radiological threats), as well as pandemic influenza and emerging diseases.  BARDA regularly publishes a series of BAAs through which it seeks submission of proposals at set intervals over a period of time from industry and research centers with novel ideas about ways to fight bioterrorism and disease.  BARDA evaluates these initial proposals and then selects those that it would like to pursue further.Eventually, awards of various values are made, based upon program priorities, proposals’ scientific/technical merits, how well the proposals fit BARDA’s areas of interest, and available funds.  Awards may be in the form or cost-reimbursement or other cost-based funding, or BARDA may award grants or make use of its Other Transaction Agreement (OTA) authority to issue that type of agreement.The BAA process generally proceeds as follows, although BARDA has indicated that the process may be altered somewhat during this unprecedented time:<ol><li>Company submits initial proposal by dates specified in BAA. (BARDA generally accepts proposals only four times per year).</li><li>Within 90 days of receipt of the initial proposal, BARDA notifies the company whether it would like a more detailed, Full Proposal.</li><li>The company prepares and submits a Full Proposal in accordance with the BAA instructions.</li><li>Within 180 days, BARDA either accepts the Full Proposal or reverts to the company with additional questions.</li><li>Once BARDA’s questions are answered, it asks the company to submit a Final Proposal Revision (“FPR”).</li><li>Assuming the FPR is acceptable, the FPR will be incorporated by reference into the final contract, OTA or grant. If BARDA has further questions, it will ask again and request another FPR.</li><li>If the parties agree to the FPR, a final agreement is presented by BARDA to the company, and the company will review and sign.  Sometimes contract or grant terms and conditions may be negotiated at this stage (if the company is unwilling or unable to accept the agreement as written), although most of the terms and conditions are non-negotiable in that they are statutory or regulatory requirements or otherwise considered mandatory by BARDA.</li></ol>Our Morrison & Foerster team has extensive experience assisting clients in responding to BAAs and negotiating contracts, grants, and OTAs.  We can provide guidance as to which type of vehicle may be most appropriate, and assist with compliance considerations for those companies without significant federal contracting experience or appropriate cost accounting and Federal Acquisition Regulation (FAR) compliance systems.  On the FDA front, we are actively engaging with FDA on the EUA process and advising clients on their diagnostic test development.  We can help with FDA communications, understanding inter-relationship among public health agencies, and assessing the opportunities presented for new product development in light of the COVID-19 pandemic. Please contact the authors for further information.

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U.S. Government Announces New Federal Funding Opportunities Related to COVID-19

Updated Coronavirus (COVID-19) Guidelines For Employers

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The Biomedical Advanced Research and Development Authority (BARDA), part of the U.S Department of Health and Human Services, Office of the Assistant Secretary f

U.S. Government Announces New Federal Funding Opportunities Related to COVID-19

You can rejoice in a recent Supreme Court decision if you have ever spent hours trying to convince a government agency not to release your company’s confidential information to the public in response to a Freedom of Information request. In a reversal of long-standing precedent in federal district and circuit courts, the Supreme Court ruled Monday that those submitting confidential information to the government need not demonstrate a “substantial competitive harm” to protect that information from disclosure under the Freedom of Information Act (FOIA). Instead, the Court held in <a href="https://www.supremecourt.gov/opinions/18pdf/18-481_5426.pdf" target="_blank" rel="noopener noreferrer">Food Marketing Institute v. Argus Leader Media</a> that those seeking to prevent disclosure of confidential commercial or financial information under FOIA Exemption 4 need simply demonstrate that (1) the information is “customarily kept private” or “closely held”; and (2) the government, in receiving the information, provided “some assurance that it will remain secret.”  The extent to which this new rule will limit the nature and type of federal contractor information released under FOIA is unclear. But the Court’s decision, at the very least, assures contractors that they will no longer be forced to prove (to an agency or to a court) that they will be substantially harmed by the release of information they provide to a federal agency, so long as that information has been provided with the expectation that it remain confidential.At the center of Food Marketing Institute is “Exemption 4” to FOIA’s mandatory disclosure requirement, which states that FOIA does not apply to “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”  5 U.S.C. § 552(b)(4). Congress provided no guidance in the FOIA statutes as to what would make commercial or financial information “confidential,” but for 45 years, federal courts all but unanimously applied the D.C. Circuit’s National Parks test, requiring a party to demonstrate that disclosure of such information would either “impair the Government’s ability to obtain necessary information in the future” or “cause substantial harm to the [submitter’s] competitive position.”  See National Parks & Conservation Assn. v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).In an opinion authored by Justice Gorsuch and joined by Chief Justice Roberts and Justices Thomas, Alito, Kagan, and Kavanaugh, the Supreme Court rejected that test as “a relic from a ‘bygone era of statutory construction,’”<a href="#_ftn1" name="_ftnref1">[1]</a> one that inappropriately elevated legislative history above statutory text. The Court, turning instead to an assortment of English‑language and legal dictionaries contemporary to FOIA’s enactment, found no mention of “substantial competitive harm” in their definitions of “confidential.”  Instead, the Court gleaned “two conditions” that “might be required” to make information confidential. Based on definitions such as “known only to a limited few,” “not publicly disseminated,” and “intended to be held in confidence or kept secret,” the Court found that information could be considered confidential if it “is customarily kept private, or at least closely held, by the person imparting it.”  Based on definitions such as “spoken or written in confidence” and “told in confidence,” the Court found that information also could be confidential if “the party receiving it provides some assurance that it will remain secret.”The Court questioned whether both conditions must be met. The first “has to be,” it figured, as “it is hard to see how information could be deemed confidential if its owner shares it freely.”  But the Court left open whether “privately held information [can] lose its confidential character for purposes of Exemption 4 if it’s communicated to the government without assurances that the government will keep it private,”<a href="#_ftn2" name="_ftnref2">[2]</a> finding the information at issue clearly satisfied both conditions.So, for now at least, a contractor seeking to prevent the release under FOIA of information it has submitted to the government must show that information was submitted under some assurance that the government would keep it secret. But what kind of assurance satisfies?  In Food Marketing Institute, the Court cited the government’s promises of privacy in the Federal Register when promulgating regulations requiring submission of the data at issue. If text supporting a regulation counts, then one would strongly suspect the government’s assurances in FAR 15.506(e)(3) — that it will not disclose in a debriefing any confidential manufacturing processes or techniques, cost breakdowns, profit, indirect cost rates, or similar information submitted with a proposal — should also suffice. By corollary, the promise to disclose information such as overall cost or price, including unit prices, in FAR 15.506(d) means such information would not be protected under Food Marketing Institute.In all events, it is as important now as ever that contractors mark their proposals with the legend supplied in FAR 52.215-1:<blockquote>This proposal includes data that shall not be disclosed outside the Government and shall not be duplicated, used, or disclosed — in whole or in part — for any purpose other than to evaluate this proposal. If, however, a contract is awarded to this offeror as a result of — or in connection with — the submission of this data, the Government shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting contract. This restriction does not limit the Government’s right to use information contained in this data if it is obtained from another source without restriction. The data subject to this restriction are contained in sheets [insert numbers or other identification of sheets]</blockquote>or such other legend or marking as prescribed in the RFP. Use of this legend will help ensure that the proposal — and any portions of it not incorporated into the final contract — will remain confidential. Furthermore, during contract performance, it is essential to mark all technical data and computer software in accordance with the applicable data-rights clauses.<a href="#_ftn3" name="_ftnref3">[3]</a>  And, where appropriate, mark other documents with a FOIA legend such as the following:<blockquote>This document contains trade secrets and commercial or financial information which are proprietary and confidential and exempt from disclosure under the Freedom of Information Act, 5 U.S.C. § 552(b)(4). Furthermore, this information is prohibited from disclosure under the Trade Secrets Act, 18 U.S.C. § 1905. <a style="font-size: 1rem;" href="#_ftn4" name="_ftnref4">[4]</a></blockquote>These practices should not be new to government contractors, but if your company has not been using them routinely, we recommend that you implement them immediately. Although the scope of information protectable under FOIA Exemption 4 may have grown, the sensitive information that keeps contractors up at night — cost breakdowns, indirect rates, confidential technical information, and trade secrets — have long been exempt from disclosure, if marked appropriately. The difference now is that, under Food Marketing Institute, contractors will be spared the time, cost, and aggravation of having to prove, at the behest of an aggressive FOIA-requester or insistent government official, that disclosure could cause them substantial harm when, in many cases, the FAR itself already recognizes as much. This is welcome, and warranted, relief.<a href="#_ftn1">[1]</a> This quotes the United States in its amicus brief, in which the Administration’s position was a marked departure from those before it and undoubtedly in contrast with the government’s position in many ongoing FOIA disputes.<a href="#_ftn2">[2]</a> Emphasis in original.<a href="#_ftn3">[3]</a> See, e.g., FAR 52.227-14(g)(3)-(4) (Alternates II and III), DFARS 252.227-7013(f), and DFARS 252.227-7014(f).<a href="#_ftn4">[4]</a> This additional sentence recognizes a nuance that is beyond the scope of this post, but one that might be affected by the Food Marketing Institute holding — that is, FOIA does not itself prohibit the government from disclosing information that falls within an exemption; the Act’s exemptions merely enumerate categories of information the government is not required to disclose pursuant to a FOIA request. Courts have long held that FOIA Exemption 4 is coextensive with (or at least wholly within) the scope of the Trade Secrets Act, 18 U.S.C. § 1905, which prohibits government officials from disclosing “information concern[ing] or relat[ing] to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association,” and can serve as a basis for injunctive relief under the Administrative Procedure Act if an agency has decided to disclose information falling into FOIA Exemption 4. See Chrysler Corp. v. Brown, 441 U.S. 281 (1979); CNA Financial Corp. v. Donovan, 830 F.2d 1132, 1151-52 (D.C. Cir. 1987); McDonnell Douglas Corp. v. Dep’t of the Air Force, 375 F.3d 1182, 1186 (D.C. Cir. 2004). With the scope of FOIA Exemption 4 now greatly enlarged under Food Marketing Institute, however, it’s possible courts could find situations in which information would be exempt from disclosure under FOIA but not necessarily protected from disclosure under the Trade Secrets Act.

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 litiga

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Locke Bell is a partner in the firm’s Government Contracts & Public Procurement practice.

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Supreme Court Removes “Substantial Competitive Harm” Requirement for Contractors Seeking to Protect Confidential Information from Release Under FOIA

You can rejoice in a recent Supreme Court decision if you have ever spent hours trying to convince a government agency not to release your company’s confidentia

Effective May 1, 2018, newly issued federal government contracts, grants, and cooperative agreements will be subject to revised regulations implementing the Bayh-Dole Act, the federal statute governing title and license rights for inventions developed with federal funding.  The new regulations were issued on April 13, 2018 by the Department of Commerce, National Institute of Standards and Technology (NIST) as a final rule amending 37 C.F.R. part 401.  See <a href="https://www.gpo.gov/fdsys/pkg/FR-2018-04-13/pdf/2018-07532.pdf">83 Fed. Reg. 15954 et seq</a>.  Included in the regulations are changes to the standard intellectual property-related contract clauses that must be included in most federal contracts, grants, and cooperative agreements.Of particular note, under the revised regulations the federal government now has essentially an unlimited amount of time to demand title to grantee and contractor “subject inventions” – those inventions conceived or first actually reduced to practice in the performance of work under a funding agreement – in instances where the contractor did not precisely follow the notice and election procedures.  This change reinforces the importance of meeting the deadlines imposed under Bayh-Dole for invention disclosure and election of title.  A graphic describing the applicable deadlines is available <a href="https://govcon.mofo.com/cybersecurity-and-data-privacy/the-bayh-dole-act/">here</a>.Below we summarize this change and other significant considerations under the new regulations.  While the new rules apply to all federal funding agreements (i.e., grants, contracts, cooperative agreements) executed after May 14, 2018, agencies may, in their discretion, amend current funding agreements to make the new rules applicable prospectively.1. Expanded Government Opportunities to Demand Title to InventionsHistorically, if a contractor<a href="#_ftn1" name="_ftnref1">[1]</a> failed to disclose a subject invention or to elect title to that invention within the timeframes specified under the Bayh-Dole regulations, the government had sixty days, upon discovery of the error, to object to the procedural error and seek title for itself.  In practice, this meant that even where a contractor had mistakenly failed to disclose an invention or to elect title it could rectify the mistake by filing a notice and/or election of title and then waiting sixty days for the government’s objection period to expire.  This now happens routinely when subsequent licensees of an invention discover that government funding was involved in the development of the product, but that Bayh-Dole procedures were not followed.The most significant revision to the implementing regulations eliminates the government’s limited sixty day objection period and instead makes the objection period indefinite.  37 C.F.R. § 401.14(d)(1).  This means that a contractor’s failure to timely notify the funding agency of a subject invention, or to elect title to that invention, could allow the government to request title at any point in the future.  This new scheme injects uncertainty into the process and will have significant ramifications for companies, universities, and other organizations that develop inventions with government funding assistance.  Contractors may find themselves without valid title to a product or process they have patented or facing legal action from subsequent licensees whose licenses could be of little to no value if the government elects title.Now that the risk profile has changed, recipients of federal funding must prioritize strict adherence to the invention disclosure rules from this point forward.  (This has historically been a challenge for researchers, particularly those in life sciences fields.)  Further, potential licensees of inventions must be very careful to ascertain whether federal funding was involved and, if so, to verify through due diligence that all required deadlines were met.  In the event of error or delay, funding recipients must now seek and receive explicit confirmation from the funding agency that it will not seek to obtain title in the future.  It remains to be seen whether federal agencies will be willing to provide such confirmation.2. Regulatory Confirmation of Bayh-Dole’s Application to Large BusinessesAs originally crafted, the Bayh-Dole Act applied only to small businesses and non-profit institutions, including research universities.  The Patent and Trademark Law Act of 1980, Pub. L. 96-517 (as amended), was codified in 35 U.S.C. §§ 200-212 (the “Bayh-Dole Act”).  Executive Order 12591, issued April 10, 1987, expanded the reach of the Bayh-Dole Act’s requirements and protections to large businesses, thereby bringing all recipients of federal grants, contracts, and cooperative agreements under the same set of rules with respect to the treatment of subject inventions.  Notwithstanding the Executive Order, however, the implementing regulations in 37 C.F.R. were never amended to include large businesses until now.  Revised 37 C.F.R. § 401.1(b) now states that the regulations apply “to all funding agreements with firms regardless of size.”3. Circumvention of Supreme Court’s Ruling in Stanford v. RocheIn its 2011 decision, the Supreme Court held that title in a patented invention vests first in the inventor, even where the Bayh-Dole Act applies.  NIST has attempted to temper the impact of this holding by mandating that contractors require their employees to sign agreements requiring prompt disclosure of subject inventions and assigning all rights in the inventions to the contractor.  37 C.F.R. § 401.14(f)(2).4. Continued Preference for U.S. Companies and Requirement for U.S. ManufactureSeveral commenters on the draft proposed rule had requested that the regulations be revised to permit foreign collaborators to receive standard Bayh-Dole rights.  NIST rejected this request as contrary to the statutory mandate.  83 Fed. Reg. 15,955.  Similarly, NIST maintained the requirement for substantial U.S. manufacture of subject inventions, and rejected the suggestions of commenters to permit automatic waivers in certain instances.  In doing so, NIST noted that the Bayh-Dole statute allows waivers from the requirement only “in individual cases.”  83 Fed. Reg. 15,956.5. No Deviation from Required Patent LanguageSome commenters had asked NIST to give contractors flexibility in terms of the language used to reference government support in patent applications.  83 Fed. Reg. 15,956.  NIST declined, reiterating that the “two clear, concise sentences”<a href="#_ftn2" name="_ftnref2">[2]</a> prescribed by 37 C.F.R. § 401.14(f)(4) must be used to “notify readers of the Federal government’s rights in a subject invention.”  Id.6. Recognition of Contractors’ Strategic Use of Provisional Patent FilingsNIST acknowledged several commenters who pointed out the increasing use by contractors of provisional patent applications.  83 Fed. Reg. 15,956.  In turn, NIST amended the provision permitting the government to obtain title when a patent application had been abandoned to now apply only to non-provisional patent applications.  37 C.F.R. § 401.14(d)(3).  NIST also altered the requirement for contractor notice of a decision not to continue patent prosecution to require notice only where a non-provisional patent application has been abandoned.  37 C.F.R. § 401.14(f)(3).  (This notice period also was extended from thirty days prior to the expiration of the response period to sixty days (although sixty days was a compromise from the original 120-day change proposed by NIST).)  83 Fed. Reg. 15,956.  Finally, where a contractor requests an extension of time for filing a non-provisional application after a provisional application has been filed, a one year extension will now be granted automatically upon request, unless the funding agency notifies the contractor otherwise within sixty days of the request.  37 C.F.R. § 401.14(c)(5).7. Affirmation of Small Business Licensing Preference Requirement for Nonprofit OrganizationsNonprofit organizations have historically been required to give preference to small businesses when licensing subject inventions for commercial exploitation.  37 C.F.R. § 401.14(k).  The new regulations provide an avenue for small business appeals to the funding agency if they believe a nonprofit organization is not following this small business preference requirement.  37 C.F.R. § 401.7(b).8. Revised Procedures in Situations Involving Government Employee Co-InventorsUnder the revised regulations, the government agency that employs a government employee co-inventor now has patenting priority over the funding agency in instances where the contractor has declined to elect title.  37 C.F.R. § 401.10(a).9. Recognition of iEdison ChallengesWhile NIST expressed its support for the online electronic database operated by the National Institutes of Health (NIH), it noted that it cannot compel agencies to use the database and implicitly acknowledged some challenges with the system in touting a new collaboration between NIH and NIST to develop enhanced iEdison training modules and to identify “opportunities for updates and improvements” to the iEdison messaging system.  83 Fed. Reg. 15,957.<a href="#_ftnref1" name="_ftn1">[1]</a> The term “contractor” in 37 C.F.R. part 401 encompasses grant recipients and cooperative agreement holders as well as those with procurement contracts and is therefore used throughout this article to pertain to all federal funding recipients.<a href="#_ftnref2" name="_ftn2">[2]</a> The required language is:  “This invention was made with government support under (identify the contract) awarded by (identify the Federal agency).  The government has certain rights in the invention.”

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Bayh-Dole Regulatory Update Offers Clarifications to Federal Grantees and Contractors But Also Raises Specter of Government Interference with Patent Rights

Foreign Investment 2020 (Part 5): Final CFIUS Rules Announced

Effective May 1, 2018, newly issued federal government contracts, grants, and cooperative agreements will be subject to revised regulations implementing the Bay

Bayh-Dole Regulatory Update Offers Clarifications to Federal Grantees and Contractors But Also Raises Specter of Government Interference with Patent Rights