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Scott A. Freling

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Scott Freling represents civilian and defense contractors, at all stages of the procurement process, in their dealings with federal, state, and local government customers and with other contractors. He has a broad-based government contracts practice, which includes compliance counseling, internal investigations, strategic procurement advice, claims and other disputes, teaming and subcontracting, and mergers and acquisitions. He represents clients in federal and state court litigation and administrative proceedings, including bid protests before the Government Accountability Office and the U.S. Court of Federal Claims. He also represents clients in obtaining and maintaining SAFETY Act liability protection for anti-terrorism technologies. Mr. Freling’s experience covers a wide variety of industries, including defense and aerospace, information technology and software, government services, life sciences, renewable energy, and private equity investment in government contractors.

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As part of the FY23 National Defense Authorization Act (“NDAA”), Congress has given the Department of Defense authority to pay defense contractors for increased costs due to inflation.  Section 822 of the NDAA amends Public Law 85-804 (50 U.S.C. 1431) to allow contractors to apply for adjustments, while also giving the DoD wide discretion to grant or deny requests.  President Biden is expected to sign the FY23 NDAA soon, and Section 822 has the potential to be welcome news for contractors who have been battling inflation under multi-year, fixed-price contracts. 

As readers of this blog know from prior posts, DoD has issued position papers over the last year that attempt to address inflation with existing legal tools, but as a practical matter, the Department has provided few options for contractors impacted by rising costs.  The new NDAA provision could finally provide DoD with the legal support it needs to aid contractors struggling with inflation.  However, many questions remain about how this law will work and whether it will actually meet the growing needs of the defense industrial base.  In particular, Congress has not yet appropriated money to fund applications for relief, and DoD must prepare guidance for implementing the statute.  Both of these things will need to happen before contractors can apply for and potentially receive inflation-based price adjustments under this amended Public Law 85-804 authority.

This post discusses the amendment and analyzes the hurdles that remain between defense contractors and inflationary relief.…

Continue Reading Congress Offers Greater Hope for Defense Contractors Battling Inflation; Actual Relief Is Still Not Clear

On the heels of the FTC’s opposition to Lockheed Martin’s acquisition of Aerojet Rocketdyne and Lockheed’s termination of the deal, the Department of Defense (DoD) released a report expressing concerns about the state of competition among its contractors.  Of particular note, the report encourages DoD action to (1) increase oversight of M&A transactions and (2)…

On October 15, 2019, the Defense Security Cooperation Agency (DSCA) announced that foreign arm sales for Fiscal Year (FY) 2019 totaled $55.4 billion.

This amount nearly matches the total from FY 2018 of $55.7 billion, continuing the significant increase in foreign arm sales under the Trump Administration and potentially signaling that the enormous 33 percent…

This article was originally published in Law360 and has been modified for this blog.

The Government Accountability Office (GAO) recently issued a bid protest decision regarding the application of the Berry Amendment’s domestic sourcing requirement to a U.S. Department of Defense (DOD) solicitation for leather combat gloves with touchscreen capability.  In that decision, the GAO

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A recently proposed rule would update the Federal Acquisition Regulation (“FAR”) to incorporate statutory changes to limitations on subcontracting that have been in effect since 2013. The U.S. Small Business Administration (“SBA”) has long since revised its own regulations to implement these changes, but some contracting officers have been reluctant to follow these changes in the SBA regulations because the FAR contains contradictory provisions.

The proposed rule is a sign of progress. In particular, it should add significant clarity to the current disconnect between the FAR and SBA regulations. However, the proposed rule is not perfect, and a number of recent developments highlight that outstanding questions remain.

FAR Changes to Limitations on Subcontracting

For the majority of contractors, the proposed rule is most relevant for its change to the way that limitations on subcontracting are calculated.

Specifically, the proposed rule would amend the FAR to recognize a simplified regime for contractor compliance and to expressly permit set aside recipients to subcontract any amount of performance to one or more “similarly situated” small businesses. These changes would significantly benefit small businesses that engage in teaming with other small businesses. In addition, these changes are important for contractors that do not qualify as small businesses—such as large businesses, nonprofit organizations, and certain non-U.S. entities—in that more subcontract spending under set asides can be made available to these types of entities when subcontracts to similarly situated small businesses do not count against limitations on subcontracting.

The FAR currently contains an outdated limitations on subcontracting framework, under which a small business that received a set aside was expected to track performance costs for either personnel or manufacturing, depending on whether a set aside was for services or supplies. A recipient was required to ensure that it performed work amounting to at least 50 percent of such costs, with an exclusion for materials under set asides for supplies. Similar frameworks with different percentages also applied to construction contracts.

Now, under the updated framework that has been in effect by statute since 2013 (and in SBA regulations since 2016), a small business that receives a set aside is only expected to ensure that no more than 50 percent of the amount paid under its prime award is paid to subcontractors that are not similarly situated. Corresponding updates have been made for construction contracts, and material costs continue to be excluded from limitations on subcontracting under set asides for supplies.…

Continue Reading Signs of Progress with the Limitations on Subcontracting, but Outstanding Questions Remain

Earlier this week, colleagues in our Government Contracts Group published an article about a recent Trump Administration memo regarding the “assessment and enforcement of domestic preferences in accordance with Buy American Laws,” and which follows the Administration’s April 2017 Buy American Executive Order.  In the article, Justin Ganderson, Scott Freling, Fred Levy…

Last week the Savannah River Site (“SRS”) in South Carolina, a large nuclear facility owned by the U.S. Department of Energy (“DOE”), went into a lock down after electronic and canine scans of a commercial delivery truck attempting to enter the facility indicated possible explosive residue on the vehicle.  Fortunately, the lock down was lifted…

We have already seen tremendous fallout from recent cyber attacks on Target, the U.S. Office of Personnel Management, Sony Pictures, and J.P. Morgan.  Now imagine that, instead of an email server or a database of information, a hacker gained access to the controls of a nuclear reactor or a hospital.  The potential consequences are devastating:…

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