Overview

Contracting with the government can introduce special problems that require experienced counsel. We have more than 25 years of experience in the sector representing contractors from virtually every industry. At Mayer Brown, we understand the many opportunities and challenges of contracting with federal, state and local government agencies.

Our Government Contracts practice includes leading members of the government contracts bar with the optimum balance of skills and seniority levels needed in addressing the challenges and problems our clients face. Whether negotiating terms, clearing regulatory hurdles, managing a contract dispute or defending against parallel civil and criminal investigations, we have the leadership and industry focus to help contractors thrive.

Our Government Contracts team also can draw upon the firm's extensive resources to best address our clients' government contract needs. Those resources include lawyers in the Americas, Asia, Europe and the Middle East with experience in a range of relevant industries and areas of law across the country and overseas. For example, the Government Contracts practice functions in close collaboration with Mayer Brown’s Government Relations, Biotech, Health Care and Intellectual Property practices and works with members of those practices as issues involving their experience arise.

The lawyers in our Government Contracts practice have helped clients secure and/or perform contracts with numerous federal, state and local agencies, including, at the federal level, the Department of Defense, Department of Education, Department of Energy, Department of Health and Human Services, Department of Housing and Urban Development, Department of Justice, Department of the Treasury, Department of Veterans Affairs, Federal Aviation Administration, General Services Administration, Office of Personnel Management and US Postal Service. Our clients include such major contractors as Lockheed Martin, Verizon Communications, Abbott Laboratories, Cap Gemini Ernst & Young, BlueCross BlueShield Plans and several oil companies.

Highlights
The False Claims Act and Government Contracts

Praxis

Legislative and "Front-End" Solutions

We identify legislative issues and help clients develop strategies to address authorization and funding concerns. We also help target key prospects within the government to approach about potential government business.

Our extensive experience includes:

  • Developed legislative strategy for major contractor interested in selling innovative products to government agencies and private sector for use in combating terrorism.
  • Represented major IT company with regard to programmatic funding issues.
  • Represented industry coalition regarding liability issues associated with bioterrorism defense.

Contract Negotiations

We (i) assess contract vehicles, such as schedule contracts and indefinite delivery contracts and (ii) consult regarding strategies to pursue such contracts. We also advise contractors regarding the special risks of government contracts, including the risks posed by clauses pertaining to intellectual property, cost accounting, organizational conflicts of interest, and affirmative action. We assist contractors in contract formation, including advice regarding ambiguous or restrictive solicitations and the degree to which competition may be required. We also draft and negotiate subcontracts.

Examples of our work include:

  • Advise major information technology and management consulting firms regarding subcontract negotiations.
  • Consulted with engineering services firm regarding potential conflicts of interest in major environmental engineering efforts.
  • Advised and negotiated multi-year lease agreement, including the waiver of regulatory clauses to permit the securitization of lease proceeds to finance construction.
  • Advised and negotiated $1 billion multi-year IT contract, with provisions to protect the contractor's interest in a special purpose financing vehicle.
  • Advised and negotiated "commercial" contracts involving disclosure requirements and "best price" targets.
  • Advised and negotiated numerous subcontract agreements for Department of Energy weapons complex sites.

Information Technology

We represent contractors in the information technology (IT) area, including companies that traditionally have focused on the commercial markets but are now pursuing government sales.

Representative transactions are listed below:

  • Represented major technology and communications company in all aspects of its government business for 16 years, including contract negotiations, bid protests, contract disputes, audits, cost accounting and Truth in Negotiations Act issues, procurement fraud and false claims matters, and compliance programs. We have assisted the company with R&D and associated rights in technical data and software and represented the provider in subcontract negotiations, including use of licensed software.
  • Long-term counsel (20 years) to major IT services contractor in all aspects of its contracts with various agencies. The contracts include Supply Schedule and other services contracts. Our work has included bid protests, contract claims, and counseling on contract administration issues involving the Truth in Negotiations Act, the Cost Accounting Standards, and audit disputes. We also have represented the company in subcontract negotiations.
  • Represent commercial contractors in disputes with the Government regarding alleged breaches of software licenses.
  • Represented one of the nation's largest student loan servicing contractors regarding a government contract worth several hundred million dollars. In a bid protest, we negotiated a substantial settlement in our client's favor involving a large increment of additional business.
  • Drafted and negotiated variety of IT subcontracts for a major insurance carrier under a federal insurance program, including contracts for software development, outsourcing, and disaster recovery.

Schedule Contracts and Commercial Items

We counsel clients on issues arising out of Government efforts to take advantage of "commercial" buying practices or obtain products and services available in the commercial market. Such issues include commercial item acquisitions, Federal Supply Schedule contracts, Blanket Purchase Agreements (BPAs), and government-wide acquisition contracts (GWACs).

Our extensive experience includes:

  • Advised consulting, IT, and other firms regarding the extent to which particular services may qualify as commercial items under the Federal Acquisition Regulation and required "flow down" clauses to subcontractors.
  • Consulted with IT, accounting, consulting, manufacturing, and distribution firms regarding the Supply Schedule program, including obtaining schedule contracts, use of BPAs, and relevant risks and obligations.
  • Advised contractors with regard to competitions under GWACs and other issues involving indefinite delivery, indefinite quantity (ID/IQ) contracts.
  • Advised and represented with regard to disclosure obligations involved in negotiation and modification of GSA and VA Schedule contracts and compliance with Price Reduction clauses.
  • Advised and represented major diagnostics company in multiple audits of its compliance with price disclosure obligations in schedule contracts and negotiation of comprehensive settlement.

Combating Terrorism

We assist a variety of companies in contract issues arising out of the Government's efforts to fight terrorism, including biodefense contracting.

Representative transactions are listed below:

  • Advised multiple companies offering biotechnology products and services to combat terrorism.
  • Advised several biotechnology firms on various types of technology transfer agreements, including CRADAs and material transfer agreements.
  • Assisted foreign commercial company in bringing technology to US for anti-terrorism efforts.

Strategic Alliances, Teaming, and Subcontracting

We assist contractors with the formation, maintenance, and (when necessary) the dissolution of contractor teams.

Our extensive experience includes the following:

  • Conducted Federal court litigation regarding an alleged breach of a teaming agreement between two major defense contractors.
  • Advised major defense contractor regarding issues raised by teaming agreements and special purpose joint ventures.
  • Successfully represented defense subcontractor in a dispute with a second-tier subcontractor in a breach of contract action.
  • Advised and negotiated subcontracting flow-through clauses in major IT outsourcing contract.

Mergers and Acquisitions of Government Contractors

We advise contractors regarding issues that arise in mergers, consolidations, and other business combinations and reorganizations, including novation agreements, advance agreements, and the allowability of restructuring costs.

Representative transactions are listed below:

  • Represented major US and foreign companies in connection with the sale or merger of US defense businesses involving Exon-Florio review, export controls, and special arrangements for protection of classified business for ongoing US operations.
  • Advised major insurance carrier under federal health insurance program regarding sale of line of business.
  • Acted as counsel to major defense contractor regarding merger.
  • Represented machine manufacturer in novation of multiple federal contracts as a result of acquisition.

International and Security Issues

We advise contractors regarding issues that arise from contracts involving foreign countries and/or foreign companies, including Exon-Florio and export controls, as well as the Foreign Corrupt Practices Act. We represent clients in their efforts to obtain and retain security clearances to perform sensitive work.

For example, our recent experience includes:

  • Represented major international consulting company with regard to security clearance issues.
  • Advised major technology firm regarding role of foreign nationals in performing contracts involving classified information, including potential business restructuring.
  • Represented multiple companies in connection with international arbitrations involving the governments of Norway, the Arab Republic of Egypt, Saudi Arabia, Indonesia, and China, as well as NATO.
  • Successfully represented major systems integrator in an arbitration arising from a Foreign Military Sales contract for the purchase of mine sweepers by the Arab Republic of Egypt.
  • Negotiated de minimis settlement for one of the nation's ten largest government contractors in a $200 million international qui tam investigation arising from a series of Foreign Military Sales contracts in the Middle East.
  • Represented major aerospace company in a series of international arbitrations involving a joint venture with the Norwegian state-owned defense manufacturer to develop a missile system.
  • Represented an Asian government in connection with international arbitrations arising from 25 contracts for the construction and purchase of electric generating plants.

Disputes and Other Litigation

We frequently represent contractors in disputes with government agencies in federal courts and boards of contract appeals. Our work encompasses such disputes as: cost allowability and allocation; audit disputes; equitable adjustments; and contract terminations for convenience and default. We also handle disputes between prime and subcontractors. To best serve our clients' interests, we pursue alternative dispute resolution (ADR) and other litigation alternatives when advisable and litigate only when necessary.

We have handled numerous disputes involving government contractors, encompassing disputes with the Government and among contractors.

Our recent experience includes:

  • Represented financial institutions in Winstar-type breach of contract actions in the Court of Federal Claims.
  • Advised major defense contractor in disputes with the Army in the Court of Federal Claims over defective specifications and a termination for default.
  • Represented major insurer in disputes regarding health care contracts.
  • Represented consortium of 24 energy companies in connection with $2 billion in claims against DOD arising from the Government's illegal adjustment of the purchase price of fuel.
  • Represented electronics and telecommunications firm in challenging a fixed-price development contract as illegal, thereby permitting the contractor to pursue recovery of $60 million in cost overruns.
  • Successfully represented petroleum refiner before the Small Business Administration in opposing an agency challenge to the refiner's status as a small business.
  • Represented major IT firm in successfully restructuring a $200 million outsourcing contract for which the Government had failed to provide adequate baseline and integration data.
  • Successfully represented energy company before the Federal Circuit in opposing the Government's allegations that the company forfeited a contract claim because of an intervening bankruptcy.
  • Prepared successful requests for equitable adjustment for subsidiaries of major health care carriers under a federal insurance program.
  • Advised subcontractor in a $300 million breach of contract suit in federal court against a prime contractor on a major Air Force program.
  • Defended prime contractor in a suit in federal court arising from termination for convenience of a Navy missile program.

Bid Protests

We regularly litigate protests regarding solicitations and contract awards before the US Government Accountability Office (GAO), the Court of Federal Claims, and other types of forum. We have handled dozens of protests before the GAO, Court of Federal Claims, federal administrative agencies, state courts, and other adjudicative bodies with protest jurisdiction.

Our extensive protest experience includes, for example:

  • Successfully defended at GAO a contract award valued at more than $3 billion for a new generation of armored vehicles.
  • Successfully defended at GAO a contract for telecommunications services valued at roughly $1 billion.
  • Successfully pursued a federal court protest regarding a state Medicaid program in a case of first impression.
  • Represented major systems integrator in overturning award of a $500 million IT contract.
  • Successfully defended at GAO a $1 billion contract for cruise missiles.
  • Handled significant matters before special purpose bid protest forums, e.g., US Postal Service and Washington Metropolitan Area Transit Authority.

Cost Accounting

We advise contractors regarding cost accounting issues, including allowability and cost allocation, and represent companies in cost-related disputes arising under or relating to government contracts.

Examples of our work include:

  • Represent major insurance carrier in cost allocation dispute under federal health care program.
  • Advised major defense contractors, insurance carriers, and other entities regarding the allowability of legal and other costs.
  • Advised major insurance carrier regarding pension issues involving Cost Accounting Standard (CAS) 413.
  • Represent defense contractor in a dispute regarding the application of CAS 406 and 410 to a large state income tax refund received by the contractor.

Audits and Investigations

We advise contractors with regard to audits and investigations of government contracts and programs as well as conduct internal investigations to advise clients regarding risks and potential exposure.

Recent transactions include:

  • Handled several reviews for major health care companies regarding compliance with government pricing and anti-kickback laws and regulations and preparation of compliance program.
  • Handled internal reviews for technology companies regarding compliance with regulatory pricing regulations.
  • Assisted major defense contractor in defense and settlement of numerous Cost Accounting Standards issues raised in DCAA audits.

Compliance Programs

We have extensive experience in developing and implementing corporate compliance programs in diverse industries, including the defense, health care, and pharmaceutical industries.

Our extensive experience includes:

  • Trained employees of health insurer and major diagnostics company in compliance with certification, price disclosure, and price reduction requirements of Federal Supply Schedule contracts.
  • Advised and represented major automobile manufacturer regarding compliance program.

Fraud and False Claims

We help contractors develop practical approaches to difficult situations, including the criminalization of government contracting. We advise and defend clients with regard to the False Claims Act, including private enforcement (qui tam) actions, and related civil and criminal investigations. We have represented contractors in more than 15 major qui tam actions and numerous fraud investigations by the Government.

Examples of our recent work in this area are listed below:

  • Represented major insurance carrier in a False Claims Act qui tam case, joined in part by the Government, alleging failure to pass through credits under a federal health insurance program.
  • Represented another major insurance carrier in a qui tam suit alleging that it paid Medicare claims submitted by a large national laboratory with invalid diagnostic codes and other alleged documentation deficiencies.
  • Currently handling large and complex qui tam case brought against major insurer that remains under seal and thus inactive until DOJ determines whether to take over the case or let the qui tam plaintiffs pursue it.
  • Represented major medical products and services company in a qui tam action, where the relator has alleged that the company falsely represented the adequacy and effectiveness of its testing of plasma used to manufacture plasma derivatives, as well as asserted retaliation claims. Following full discovery, our motion for summary judgment was granted on all counts, and the district court's summary judgment ruling was upheld on appeal.
  • Negotiated a de minimis settlement for one of the nation's 10 largest government contractors in a $200 million international qui tam investigation arising from a series of Foreign Military Sales contracts in the Middle East.
  • Represented major insurance company in a qui tam case in which the relator has alleged false claims were filed for federal reimbursement for certain health care services.
  • Represented major technology and communications contractor in a series of qui tam and False Claims Act actions involving regulatory pricing issues.
  • Represented major defense contractor in a far-ranging qui tam case alleging failure to comply with quality assurance requirements of contracts to manufacture rocket motors and more than $500 million in damages and penalties. The case was settled on the eve of a jury trial.
  • Represented the same defense contractor in a qui tam case alleging cost mischarging, delivery of substandard products, and unauthorized use of Government property. We negotiated a settlement approved by a court over DOJ objections.
  • Represented defense contractor in a qui tam case alleging time card fraud and other labor mischarging between fixed price and cost reimbursement contracts. A criminal investigation was closed without any charges. We negotiated a settlement approved by a court over DOJ objections.

Health Care Contracting

We have significant experience in government health care contracts, including the Federal Employees Health Benefits Program, TRICARE, Medicare, Medicaid, and other federal insurance programs. We counsel and represent clients regarding compliance with Federal Supply Schedule contracts, pharmaceutical pricing laws and agreements, fraud and abuse investigations, and agency and court proceedings.

Representative transactions are listed below:

  • Advised major pharmaceutical manufacturer regarding compliance with pharmaceutical pricing agreements, Federal Ceiling Price, Section 340B, and Medicaid rebate programs.
  • Advised and represented drug manufacturer in settlement of claims arising from VA audit of compliance with Federal Ceiling Price requirements.
  • Advised and represented major health care company in voluntary disclosure of non-compliance with disclosure obligations under Supply Schedule contract.
  • Advised and represented major insurance carriers regarding Medicare program audits.
  • Advised and represented major carriers regarding termination of participation in Medicare program.

Protecting Intellectual Property and Proprietary Information

Intellectual property and other proprietary information are critical to any business. The rules and remedies in federal contracts are unique. We help clients to negotiate clauses to safeguard their rights in the software and other data involved in performing government contracts. We help protect contractors' information from release under the Freedom of Information Act by assisting contractors in preparing oppositions to release and, when appropriate, pursuing legal action to prevent release.

In the last two years, we have successfully represented a major technology and communications company and defense companies in several federal court cases to enjoin release of sensitive information requested under the Freedom of Information Act.

In addition, we have:

  • Counseled major technology and communications company regarding research and development of communications products and associated rights in technical data and software and representation of the provider in subcontract negotiations including use of licensed software from subcontractors.
  • Advised and represented commercial contractors regarding disputes with the Government concerning software licenses.
  • Advised biotechnology company regarding protection of intellectual property under contracts and other agreements with the Government.
  • Assisted major defense and IT contractors in preparing oppositions to release of proposal information under FOIA.

Debarment, Suspension, and Exclusion

We advise companies regarding the risks of debarment, suspension, and exclusion from federal programs and represent companies in negotiations with the Government and debarment/suspension proceedings.

For example, our recent experience includes:

  • Advised and represented large advertising company in debarment proceedings arising from irregularities on time and materials contract.
  • Negotiated no-debarment provisions in global settlement agreements.
  • Advised, negotiated, and successfully avoided suspension or debarment of technology firm.

Socioeconomic Issues

We represent companies with regard to the panoply of socioeconomic programs and clauses included in government contracts and related subcontracts, such as affirmative action requirements, Service Contract Act, Buy American and Trade Agreements Acts, and the Javits-Wagner-O'Day Act.

For example, we have:

  • Represented major defense contractor in a dispute with the Government regarding the contractor's alleged non-compliance with affirmative action program requirements.
  • Advised major IT and consulting firm regarding affirmative action requirements.
  • Assisted defense contractors in negotiations with the OFCCP regarding the contractors' implementation of Equal Opportunity requirements.

State and Local Procurement

In addition to our work at the federal level, we assist clients with similar issues pertaining to state and local procurements.

Examples of state and local procurement work include:

  • Advised major consulting firms regarding risks and affirmative action requirements under state procurements.
  • Advised leading behavioral health company regarding state procurement issues, including conflicts of interest.
  • Counseled major financial services firm regarding state procurements.
  • Counseled major pharmaceutical companies regarding negotiation of state schedule contracts and "piggyback" arrangements.