Trump Issues Executive Order to Strengthen Cybersecurity and Critical Infrastructure

On
May 11, 2017, President Trump issued an Executive Order on “Strengthening the
Cybersecurity of Federal Networks and Critical Infrastructure” (“EO”).  The EO makes Executive Branch agency heads
responsible for ensuring the cybersecurity of their systems and
information.  It also directs these agencies
to report, plan and budget for improvements to the cybersecurity of their Federal
systems in order to adequately protect “the executive branch enterprise.”  The EO calls for agencies to apply the National
Institute of Standards and Technology (“NIST”) Framework for Improving Critical
Infrastructure Cybersecurity (the “Framework”) in developing reports that ultimately
will be used to determine an Executive Branch cybersecurity plan.  The Framework to be used by these agencies is
the same one that has been in place since 2014 as voluntary guidance to
businesses on the development of a risk-based approach for addressing and managing
cybersecurity risks.  Notably, the EO
calls for the Executive Branch’s development and transition to a “modern,
secure, and more resilient executive branch IT [Information Technology] architecture,”
with a preference to procure shared IT services, including email, cloud and
cybersecurity services.

The EO also calls for agencies to support the cybersecurity of
U.S. critical infrastructure, which is defined to include critical physical and
information infrastructures and networks in telecommunications, energy,
financial services, water, and transportation sectors.  The EO also seeks to identify the
cybersecurity risks facing the Department of Defense (“DoD”) and the defense
industry base, including its supply chain, and to address the threats posed by
botnets and other automated, distributed cyber attacks.

Takeaways:

  • Cybersecurity remains a critical concern for
    this administration. We should expect
    that additional guidance and likely increased requirements will be issued to implement
    better and more comprehensive cybersecurity in government and with regard to those
    involved in national security, or other activities critical to the
    accomplishment of the government’s missions.
  • Given the President’s expressed intent to update
    Executive Branch IT systems and services, it is likely that an Agency’s plans
    to address cybersecurity needs will be factored into that Agency’s, and
    ultimately, the President’s Executive Branch-wide, strategic, operational and
    budgetary planning processes moving forward for FY 18 and beyond.
  • As a government contractor, you should be
    checking your systems to ensure compliance with the cybersecurity requirements
    in your current contracts and subcontracts, and moving forward to ensure your
    competitive status in future procurements.
  • Cybersecurity is likely to create opportunities
    for those with the best cybersecurity products, services and capabilities in
    the coming months and years.

If you have questions about the Executive Order or the
requirements of current cybersecurity provisions, contact Susan Warshaw Ebner,
or your FortneyScott counsel.

White House Issues Executive Order on Religious Freedom; Silent on Federal Contractors

Pres. Trump acted today to begin fulfilling his campaign promises to his evangelical and other religious group supporters.  An Executive Order (?EO?) entitled ?Promoting Free Speech and Religious Liberty? states the Administration?s positions on a number of issues of significant importance to the President?s religious ?base;? however, the omission of any limitations to LGBT rights and same-sex marriage may disappoint those same voters.

Specifically, the EO instructs government agencies, particularly the IRS, to limit regulatory oversight of political speech from churches and other tax-exempt religious institutions, to the extent legally possible.  The Johnson Amendment, now on the books, permits the IRS to suspend tax-exempt status from religious institutions if they engage in overt political activity.  In fact, there has been virtually no enforcement of this provision.

The remainder of the EO largely offers support, not action.  For example, the EO supports?but takes no affirmative steps to effectuate?the Supreme Court ruling on contraception in health insurance for religious institutions.  Earlier, the High Court ordered the Justice Department to find a resolution in its dispute with religious institutions opposed to complying with the Obamacare provision requiring contraceptive care as part of employer-provided health insurance.

For many, what is not included in the EO is of equal significance.  Despite reports to the contrary, there is no effort to limit or rescind the Executive Order requiring non-discrimination of LGBT applicants and employees by government contractors.  Also, there is no reference of any kind to same-sex marriage. However, what might raise some concerns is Section 4 which directs the Attorney General to issue guidance ?interpreting religious identity protection in Federal law.?

NDIA Turns to FortneyScott for Compliance Guide for DoD New Cyber Security Rule

National Defense
Industrial Association, a leader in defense and national security, has
published an article
co-authored by FortneyScott’s Susan Ebner, offering compliance guidance in response
to the recently issued Department of Defense (DoD) cyber
security rule
.  The rule requires
contractors to comply with 110 specific network security requirements for
safeguarding covered defense information (CDI) that is processed, stored, or
transmitted through “covered contractor information systems.”  Contractors that would provide “operationally
critical support” are also required to comply with the rule.  If you are a
covered contractor, you can obtain an extension to December 31, 2017 for your
compliance with the rule’s requirements.  Ebner notes “this extension
offers contractors a unique opportunity to assess their systems and become
compliant so that they can continue to respond to solicitations.”  In the article, Ebner outlines plans to
assess CDI systems and provides guidelines for compliance. 

Takeaways: 

  • To obtain that extension, however, you must
    notify the DoD Chief Information Officer (“CIO”) within 30 days of contract
    award of the requirements that you have not yet
    implemented.
  • Solicitations and contracts for the acquisition
    of commercial off-the-shelf supplies are exempt from compliance with this rule.
    Different versions of this DoD cyber clause, and still other Federal
    Acquisition Regulation (“FAR”) and agency cyber clauses, may be in your contract
    and may establish different immediate and longer term requirements.
  • Develop a plan to determine which clauses are in
    your contract.
  • Develop a plan for meeting immediate and longer
    term compliance, review and reporting obligations.
  • If you are subject to the newly issued DoD
    clause, act promptly in order to obtain an extension to the time for compliance
    with its security requirements.
  • Establish your cybersecurity response team so
    you can take the right steps to meet your security compliance and reporting
    obligations.


Contact Susan Ebner or your FortneyScott
attorney if you have questions about which clauses apply to you and what you
are required to do.

President Trump Rescinds ?Blacklisting? Executive Order and Regulations

On March 27, 2017, the implementing regulations issued pursuant to
President Obama’s Executive Order (EO) 13673, Fair Pay and Safe Workplaces-commonly
referred to as “Blacklisting”-were rescinded by President Trump signing a
Congressional joint resolution of disapproval (H.J. Res. 37) under the
Congressional Review Act (CRA).  In addition, President Trump signed a new Executive Order revoking EO 13673 in its entirety. The new EO directs agencies to “consider
promptly rescinding any orders, rules, regulations, guidance, guidelines, or
policies implementing or enforcing” EO 13673, which would include the U.S.
Department of Labor’s companion guidance to the now-rescinded Blacklisting
regulations.

Trump’s actions are the coup de grace to the embattled Blacklisting
executive order and implementing regulations which, most notably, would have
required contractors and subcontractors to self-disclose a wide range of
alleged violations of labor and employment laws when seeking to do business
with the federal government.  Although a Texas federal court issued a
nationwide injunction last fall staying EO 13673’s requirements for
self-reporting of violations and restricting pre-dispute arbitration
agreements, contractors still were required to comply with the rule’s “paycheck
transparency” provisions that become effective on January 1, 2017.

Importantly, in addition to the rescission of
all the current Blacklisting regulations, the CRA nullification bars agencies in the future from
reissuing rules in “substantially the same form” and promulgating new
rules that are “substantially the same,” absent specific
authorization by a law.

Contact your FortneyScott attorney for
additional information about the impact of these changes on your company’s
federal contracts and related compliance matters.

Acosta Makes An Impressive Showing at Senate Confirmation Hearing

In
a deft and professional performance, Secretary of Labor designee Alex Acosta
indicated that if confirmed, he would give thoughtful review to the various
challenges facing Department of Labor (DOL).
Specifically, Acosta indicated that he was open to examining, the
overtime regulation, Wage and Hour’s view on joint employer, job training, and
a return to DOL opinion letters.

Acosta
faced questions from both sides of the aisle on his position regarding the enjoined
overtime regulations.  He expressed his
wish to examine both the exemption threshold and duties test, acknowledging
that the current threshold is behind the times, but expressed concern with the
extreme impact of the enjoined regulations.

Acosta
also voiced strong support for the traditional definition of the joint-employer
relationship, contrary to the position taken by the Obama Administration.  In response to bi-partisan concerns about the
future of job training and Job Corps. programs, Acosta voiced intent to
evaluate job-training programs with a specific emphasis on fostering successful
programs at the local level.  Acosta
clearly stated support for the Department to return to issuing Opinion Letters,
as opposed to the often amorphous Interpretations issued by Obama’s DOL.  When asked about the way OFCCP has been using
statistics in compliance evaluations, Acosta simply recognized the validity of
disparate impact analysis in discrimination cases.

Generally, with respect to
the reorganization of the Department and the reexamination of regulations, as
instructed by recent Executive Orders, Acosta made clear that he would be
responsive to the directions from his boss, the President.

Pres. Trump Issues Executive Order to Reorganize the Executive Branch

The ?Administrative State? has received a frontal assault.  President Trump signed an Executive Order that is likely to have far reaching consequences in shaping the structure and programs of executive agencies during the Trump Administration and beyond.  Indeed, the new EO may be the harbinger of the most significant restructuring of the federal agencies since President Franklin Roosevelt, which then saw the greatest expansion of the federal bureaucracy.  The Trump administration may implement the most significant devolution of agencies in generations which will fundamentally change how the federal government operates.

President Trump signed a new EO dated March 13, 2017, entitled a ?Comprehensive Plan for Reorganizing the Executive Branch. ?  The new EO directs the Director of Office of Management and Budget (?OMB?) to follow three steps to reorganize the executive branch.  First, OMB is to collect from each federal agency within 180 days a proposed plan to reorganize the executive branch agency, and to improve effectiveness and accountability.

Additionally, public comments are to be submitted pursuant to a notice published in the Federal Register by the Director of the OMB inviting the public to suggest improvements in the organization and functioning of the executive branch.
Finally, within 180 days after the comment period, OMB then is to ?submit to the President a proposed plan to reorganize the executive branch in order to improve the efficiency, effectiveness, and accountability of agencies.?  In addition to addressing the elimination of ?unnecessary agencies, components of agencies, and programs and to merge functions, the plan also is to include recommendations for any legislation or administrative measures necessary to achieve the proposed reorganization.?  Presidential action and necessary legislation then would follow.

Next steps:  Employers, and in particular Federal contractors, will need to carefully monitor these developments.  Specifically, the following steps should be taken:

? When the comment period is opened, the comments should be submitted and there should be full engagement by the business community stakeholders.
? Recognizing that the federal budget for many agencies and programs may be cut, employers should develop recommendations on how critical missions can be completed more efficiently and effectively.
? Specific focus should be on the agencies affecting workplace obligations, including the key DOL agencies — Wage and Hour, OSHA and OFCCP, as well as the EEOC and NLRB.
? Additionally, federal procurement processes also may be addressed, including changes in agencies/programs, oversight, and funding. Additional changes may result in the government?s use of consolidated data to negotiate better deals for the government.

Contact your FortneyScott attorney or info@fortneyscott.com for additional information about these developments and the steps that FotneyScott is taking to address these significant matters.

DoD Issues Draft Guidebook for Acquiring Commercial Items

“Commercial
item” purchases are often favored both by the Government and by contractors, as
they are subject to fewer regulations and may be procured more quickly, using
streamlined Federal Acquisition Regulation (“FAR”) Part 12 procedures.  Recently enacted laws encourage this strong
preference for the acquisition of commercial supplies and services.  On February 24, 2017, the Department of
Defense (“DoD”) issued a draft Guidebook for Acquiring Commercial
Items
(“Guidebook”).

The draft Guidebook is comprised of two parts – Part A:
Commercial Item Determination and Part B: Pricing Commercial Items.  Part
A
of the Guidebook proposes processes and decision trees, and some examples
of their applications, for DoD personnel to use in assessing whether a product
or service qualifies as a “commercial item” under FAR 2.101 “Commercial item”.   Part B of the Guidebook proposes
processes and decision trees for conducting a price analysis to determine the
appropriateness of a contractor’s proposed commercial item pricing.

Takeaways:

  • The Guidebook proposes a road map for the DoD to
    use to determine whether a particular product or service will qualify as a “commercial
    item.”
  • Once DoD issues a Commercial Item Determination
    (“CID”), it can be used in future DoD procurements.
  • The Guidebook, once issued, should be of
    significant benefit to contractors, too. It can be used to guide contractors with
    regard to what they need to provide to DoD to demonstrate that their product or
    service, or the product or service of their subcontractor(s), qualifies as a “commercial
    item.”

The period for submission of comments on the Guidebook has
been extended; comments are due on or before May 1, 2017.

If you have
questions about this draft Guidebook, or are interested in learning more about
whether a particular product or service might qualify as a “commercial
item” subject to more streamlined acquisition requirements and processes, please
contact your Fortney & Scott attorney, or Susan Warshaw Ebner.

CSALs were Mailed on February 17, 2017/Revised Pay Transparency Notice

OFCCP has confirmed that as of February 17, 2017 that it has mailed 800 Corporate Scheduling Announcement Letters (CSALs) in its first release of the FY2017 Scheduling List. These are the first CSALs issued by OFCCP in approximately two years. In the revised FAQs for CSALs, OFCCP stated that these CSALs are being sent directly to establishments notify them that they will be scheduled for a compliance evaluation during the upcoming scheduling cycle.  According to the FAQs on the Federal Contractor Selection System (FCSS), the 800 establishments cover 375 distinct companies in 29 industries. The FY2017 Scheduling List also includes 30 Corporate Management Compliance Evaluations (CMCEs).
In addition, OFCCP made a small change to the notice that federal contractors must post regarding the Pay Transparency regulations, which became effective on January 11, 2017 and apply to all covered contracts entered into or modified as of that date.  OFCCP has indicated that federal contractors should implement the revised Notice as soon as practicable.  The revised notice can be found here.

Your FortneyScott attorney can provide you with advice on how to respond to these developments, or contact us by email at info@fortneyscott.com for additional information.

Ninth Circuit Court of Appeals Rules Against Reinstating the Travel Ban

In a unanimous ruling, a panel of three judges from the Ninth U.S. Circuit Court of Appeals have upheld the suspension of the immigration travel ban.  FortneyScott’s attorneys will continue to monitor this breaking development and will keep you updated.

FortneyScott Amici Curiae Brief Filed in 9th Circuit in State of Washington v. Trump et al.

Amici Curiae Brief filed by FortneyScott and Employment Law Alliance law firms in State of Washington v. Trump et al., No. 17-35105 (9th Cir, filed February 7, 2017).