Government Contracts

Sidley’s Government Contracts practice represents global clients in all facets of the intensely-regulated relationship between private industry and federal, state, local and foreign governments. Matters on which our lawyers routinely work include counseling some of the most sophisticated U.S. and foreign companies on the myriad issues associated with obtaining, performing and closing-out government contracts, including issues related to proposal preparation, cost and pricing structures, contract negotiation, compliance with applicable regulatory structures, and terminations and other post-performance matters. Our lawyers also have broad experience representing major defense, healthcare and other government contractors in criminal and civil proceedings relating to the performance of contracts, often involving sophisticated weapons systems and other cutting-edge technology and including some of the more significant civil False Claims Act (FCA) investigations and litigation in recent years.

In addition, we work on internal investigations, voluntary and mandatory disclosures to federal agencies and the Department of Justice (DOJ), bid protests, and matters involving suspension and debarment issues, export controls, foreign military sales, lobbying and election laws, the foreign ownership and control of U.S. companies and complex litigation relating to many of these areas of practice. We frequently represent both corporate and individual clients in congressional investigations and have significant experience in all aspects of such representations. Our team is also involved in matters of international commerce, representing foreign clients dealing with U.S. government agencies and U.S. clients dealing with foreign governments, and handling international arbitration.

Major Federal Procurement

Sidley regularly counsels clients on a broad spectrum of issues regarding federal procurements, including areas such as negotiating government contracts, subcontracts and teaming agreements; compliance with General Services Administration (GSA) and Department of Veterans Affairs (VA) Federal Supply Schedule (FSS) contracting requirements; government contract financing; the Cost Principles and the Cost Accounting Standards; protectionist statutory and regulatory requirements such as the Buy American and Trade Agreements Acts (as well as recent additions in this area arising from stimulus initiatives); rights in technical data and computer software and software documentation; and the various socio-economic provisions applicable to government contracting. Additionally, our lawyers counsel clients on the specific rules and regulations related to standards of conduct that apply to company representatives selling to the government, as well as the applicability of the Procurement Integrity Act and the recent additional federal ethical requirements relating to government acquisitions. We also assist contractors whose confidential commercial or financial information is sought through Freedom of Information Act requests.

Our Government Contracts lawyers have extensive, practical knowledge of all aspects of compliance with the Federal Acquisition Regulation (FAR), the Department of Defense (DOD) Supplement to the FAR (DFARS), the NASA Supplement to the FAR, and the GSA Acquisition Regulation and other agency supplements to the FAR, as well as the procurement requirements of agencies that have developed their own unique procurement processes, such as the Federal Aviation Administration (FAA) and the U.S. Postal Service (USPS). We regularly assist companies in determining and understanding appropriate contract types, including the use of and advantages inherent in commercial item contracts, as well as the use of FSS contracts and other government-wide contracting mechanisms.

We also regularly counsel GSA and VA FSS contractors regarding compliance with the Price Reduction Clause, Industrial Funding Fee requirements and the Economic Price Adjustment Clause, and we work closely with Sidley’s Life Sciences clients on all aspects of their involvement with federal procurement law and government contracts and agreements.

Bid Protests

Sidley has extensive experience in the prosecution and defense of contract award litigation. When grounds to overturn an adverse contract award decision may exist, the availability of different forums – the U.S. Court of Federal Claims (COFC), the U.S. Government Accountability Office (GAO), and the agency responsible for the procurement in issue – requires careful assessment of the advantages, disadvantages and relative costs of each. We have a wealth of experience in this regard, facilitating careful review of the alternatives and selection of the most appropriate forum in which to pursue such actions. Lawyers in our Government Contracts practice have succeeded in contract award litigation matters representing clients from a broad array of industries – including high-technology firms engaged in aerospace, defense, healthcare, communications and information technology industries, as well as commercial item contractors in fields as diverse as professional services and office furniture supply.

We have a remarkably successful track record at the GAO, achieving many positive outcomes for our clients in recent years. Our successes also involved obtaining remedial, corrective actions as a result of our protests, providing significant benefits to our clients.

Firm lawyers also have significant experience in representing and counseling clients in contract award litigation in various state administrative and judicial tribunals.

Debarment and Suspension

Sidley lawyers are well experienced in representing clients in negotiations with officials responsible for suspension and debarment determinations in the Military Departments, GSA and other federal agencies. Such representations typically entail working closely with our clients to develop submissions designed to forestall suspension or debarment proceedings, as well as the negotiation and implementation of administrative agreements. We have also litigated debarment issues in federal district court.

Federal Procurement Litigation and Responses to Agency Audits

Our lawyers have extensive experience representing a broad spectrum of clients in criminal and civil actions relating to federal procurements. We litigate in Federal District Courts and Courts of Appeals across the country, including the Court of Appeals for the Federal Circuit, as well as in the Court of Federal Claims, Boards of Contract Appeals and state courts. Our commercial litigation practice often involves disputes between or among companies arising out of contract, warranty, products liability, patent infringement, misappropriation of trade secrets and various other claims. In many cases, criminal and civil investigations of procurement issues proceed on parallel tracks, and our lawyers are highly experienced in navigating the pitfalls and opportunities that such investigations present. We also have represented clients in major arbitrations under the American Arbitration Association rules, as well as the rules of the International Chamber of Commerce, and we have worked within a wide variety of Alternative Dispute Resolution formats with great success.

We have defended clients in complex legal proceedings, including actions alleging labor mischarging, defective military weapons systems and hardware, falsification of testing, failure to conduct required inspections, quality-system breakdowns, subcontractor fraud and bid rigging and fraudulently obtained grants. We also work regularly on such matters with other Sidley practice groups, including our International Trade group, on matters such as those involving allegations of non-compliance with the country-of-origin requirements of the Buy American Act and the Trade Agreements Act. Our lawyers also have extensive experience litigating alleged fraud in connection with government healthcare programs. We have broad experience in all aspects of such matters, from the initial investigatory phases through litigation and motions practice, trial preparation and negotiation and settlement. We regularly deal on such matters with DOJ attorneys, in both the Civil and Criminal Divisions, and with U.S. Attorneys’ offices around the country.

We have particularly broad experience in defending clients in actions brought by private whistleblowers under the qui tam provisions of the civil False Claims Act (FCA) and similar state statutes. In many such cases, we have been successful in convincing the government not to intervene in the action or to intervene for the limited purpose of dismissing the claims as part of favorable settlements with our clients. We are often at the forefront of FCA jurisprudence, including litigating the extent of Rule 9(b) protections in FCA cases, the reaches of the FCA’s public disclosure bar, and the applicable standard of materiality in FCA cases. In addition, many of the whistleblower actions we litigate involve allegations of client retaliation against the whistleblower, in violation of the FCA or similar state statutes, and we have developed a great deal of expertise in defending these retaliation claims as well.

We are often called upon by clients to conduct internal investigations of possible procurement-related violations. Where appropriate, we work closely with clients to prepare disclosures to the relevant government agencies. Thereafter, we work extensively to address and close the issues with the agencies involved—often including DOJ—and to help craft and implement remedial programs to satisfy government requirements and protect against future wrongdoing.

Sidley also frequently assists clients in the defense of claims by federal and state governments, including claims for defective pricing, breach of warranty and noncompliance with the Cost Accounting Standards.

We regularly assist clients in responding to Defense Contract Audit Agency (DCAA) audits by preparing comments to the DCAA and to the Defense Contract Management Agency (DCMA). We have been successful in negotiating resolutions of governmental claims relating to such audits before they reach litigation, and we also have significant experience in litigating such claims.

Sidley lawyers also have extensive experience defending shareholder derivative actions and class actions related to criminal investigations or other allegations of corporate wrongdoing. We have successfully represented some of the largest defense contractors in such actions.

Contract and Grant Agreement Reviews

Sidley is called upon frequently by clients in different industries to review and provide advice on voluminous and complicated federal contracts and grant agreements. We frequently assist companies in performing due diligence in connection with acquisitions, divestitures and joint ventures, or in financing transactions, with emphasis on the nuances and concerns arising from government contracts and trade regulatory perspectives. We regularly assist clients in reviewing the implications of the FAR, the Foreign Corrupt Practices Act (FCPA), Office of Management and Budget (OMB) Circulars, and statutory, regulatory and agency provisions concerning export controls, antitrust, foreign ownership, control and influence, Exon-Florio (CFIUS) issues and other national security requirements.

In addition, we routinely assist clients in reviewing federal, state, and local government agencies’ solicitations and developing proposals in response to such solicitations. We regularly assist clients in developing requests for proposals addressed to intended subcontractors under government contracts, and we work with our clients on issues concerning the resulting subcontracts. Similarly, we assist clients that are intended subcontractors under government contracts to review requests for proposals issued by prime contractors or higher-tier subcontractors and develop proposals addressed to such contractors.

Our assistance often focuses on whether or not the procurement seeks commercial items and the implications of the regulations relating to such procurements. In addition, we regularly provide detailed advice to clients on how best to protect their intellectual property based on the FAR and DFARS rules regarding rights in technical data and computer software, as well as the correct fulfillment of regulatory requirements relating to all types of required certifications and representations.

We additionally advise several clients on negotiating state and local government contracts. In these matters, we frequently advise on limitation of liability, indemnification, and social policy issues. We also assist clients in responding to requests for information about business practices.

Compliance Counseling and Internal Investigations

We regularly advise clients on all aspects of compliance issues concerning their government contracts. Our work in this regard is often broadly focused, involving a review of client activities in the context of the applicable regulatory or contractual requirements, or may be more focused on a specific area or action or planned action. We are frequently called upon by clients to lead, conduct or assist with internal investigations relating to compliance issues on government contracts. These investigations may take place at the same time as federal or state investigations, but often they are triggered by our client’s internal identification of a possible issue. Issues that often arise in this context involve procurement integrity, contingent fees, kickbacks, personal and organizational conflict of interests, and, more recently, establishment and ongoing implementation of contractor codes of business ethics and internal controls. We have assisted clients in developing internal compliance manuals, advised them on whether or not specific planned activities would comply with these requirements and worked with them on voluntary disclosures to the government when noncompliant conduct has been identified.

Breach of Contract, Claims and Requests for Equitable Adjustment

Our lawyers are frequently involved in investigating, preparing, litigating and resolving contract disputes and claims for relief under a broad range of government contracts for many different agencies. These disputes include, for example, claims for equitable adjustment of costs, constructive changes, breaches of contract, terminations, delays, defects, cost allowability, defective pricing and environmental remediation costs. We have a wealth of experience in presenting such claims to the relevant contracting officials and in litigating them, where necessary, in the Boards of Contract Appeals, the U.S. Court of Federal Claims or other appropriate forums. We typically work closely with clients, in-house counsel and independent experts in the development of such claims, from the more routine to the most complex.

U.S. Civil, Military and Dual-Use Export Licensing Requirements, Export Control Compliance Programs and Export Management Systems

Our lawyers work regularly with the export regulations administered by the State Department’s Directorate of Defense Trade Controls, the Department of Commerce and the import licensing requirements of the Bureau of Alcohol, Tobacco and Firearms. We often advise clients on the development and implementation of technical assistance agreements, manufacturing license agreements and warehouse and distribution agreements.

International Defense Trade

Sidley lawyers have extensive experience representing clients in all facets of international defense trade, including export controls, technology transfer, FCPA compliance and anti-boycott compliance issues. We have represented foreign governments, companies that deal with the U.S. government, defense contractors that sell to foreign governments and foreign companies. We have extensive experience in particular in the area of Foreign Military Financing (both Foreign Military Sales and Direct Commercial Contracts), and we have represented foreign governments and U.S. and foreign companies that have been involved in transactions involving such funding.

We also represent clients in connection with the negotiation and implementation of executive agreements for mutual participation in defense procurement, host nation agreements, status of forces agreements, and other co-production, joint program and mutual assistance agreements. In addition, our lawyers have extensive experience working with clients on issues arising out of the ownership or control of U.S. companies by foreign governments or foreign corporations.

Litigation Relating to the Sale or Acquisition of Business Segments, Resulting in the Termination of Pension Plans and Treatment of Post-Retirement Benefit Plans

Our Government Contracts practice is in the vanguard of this still-developing area of the law, representing major government contractors in landmark cases involving segment closings and overfunded and underfunded defined benefit pension plans. This is a very complex area of the law, involving general pension law, the Cost Accounting Standards’ treatment of pension costs and accounting and actuarial principles and pronouncements. We bring significant experience to all of these aspects of pension cases.