President Trump’s first executive order that directly affects government contractors was signed on Tuesday, April 18, 2017. Federal law and the associated Federal Acquisition Regulation (FAR) have long established a preference for the procurement of goods manufactured or produced in the United States. The most well-known domestic preference requirements are the Buy American Act (BAA) and the Trade Agreements Act (TAA), which are applied to government contractors via FAR 52.225-1 and FAR 52.225-5, respectively.
A new clause has been added to the Federal Acquisition Regulation (FAR) that requires certain contractors to provide “privacy training” to their employees. FAR 52.224-3 “Privacy Training” will be included in all contracts awarded after January 19, 2017, that involve access to a system of records or the handling of Personally Identifiable Information (PII). A system of records refers to records under the control of an agency from which information is retrieved by the name of an individual or by some other form of identifier assigned to that individual. Such contractors will now have to provide privacy training to employees that includes the following parameters.
Employees must receive privacy training prior to starting their assignment and annually thereafter. If Alternate I to the clause is used, the Government will provide the training. Otherwise, the contractor may obtain the training from a source of their own choosing. Regardless of the source, the training must include the items below.
Contractors are required to generate and maintain documentation demonstrating compliance with the training requirement.
The White House announced Monday morning that President Trump will propose increasing the defense budget by 10% or $54 billion. This increase in spending will be offset by corresponding reductions to discretionary non-defense spending. Details regarding what the increase in defense spending will be used for or what other programs will be cut were not shared. An official from the Office of Management and Budget (OMB) stated the current thinking is to allow the Pentagon to spend the additional $54 billion as they see fit. The statement issued by the White House quoted President Trump as saying the budget would also focus on law enforcement and veterans. Therefore, it appears programs in these areas will not be cut. Conversely, the statement did indicate that foreign aid would be substantially reduced though the OMB official noted that most agencies would see a substantial reduction in their budgets. President Trump has previously stated he would not cut Social Security or Medicaid and foreign aid is a small part of the budget, so the bulk of the cuts must come from other domestic programs.
A more detailed, though still summary budget is expected in mid-March and a final budget should be ready by April. However, even without details it is clear there will be more opportunities for defense contractors and less for civilian agency contractors, especially contractors working in the area of foreign aid. Stay tuned for more details.
Every 4 years on Inauguration Day, (January 20th) the Federal government offices in the Washington DC area are closed and the Federal employees who work there get an extra paid holiday. The fate of contractor employees who also work in these offices is less clear. Consequently, Aronson recommends that contractors who have employees working in Government offices take the following steps to ensure the office closings result in minimal disruption to the contractor, the contractor’s employees and the customer.
As is becoming the norm, the House and Senate have both passed continuing resolutions (CR) designed to keep the Federal Government funded, open and operating at least through December 9th, 2016. Conspicuously, by then the results of the election will be known but the new President and Congress will not have taken office. The House version of the CR contains an amendment to the effect the CR will be automatically extended until January 19th , 2017 if Congress fails to agree to a deal to keep the Government open after December 9th. The House and Senate versions of the CR differ slightly and must be aligned in conference. The main sticking point is funding for the Flint, Michigan water crisis, which the House has agreed to include in a separate water bill. It is anticipated the House and Senate will agree on the wording of the CR and President Obama will sign it.