The proposed rule to implement the Cybersecurity Maturity Model Certification (“CMMC”) program in the Defense Federal Acquisition Regulation Supplement (“DFARS”) was published in the Federal Register on August 15, 2024 and will have a 60-day comment period (through October 15, 2024).
Continue Reading The CMMC Rule To Update the DFARS is Here!

In the high-stakes realm of False Claims Act (FCA) litigation per-claim penalties can reach daunting levels that dwarf even treble damages. A recent ruling from the Eighth Circuit Court provides valuable guidance on the limits of penalties under the Constitution’s Excessive Fines Clause (Clause). In Grant ex rel. United States v. Zorn the Eighth Circuit provides clarity applying the Clause in FCA litigation, specifically identifying when a penalty for purely economic loss offenses might be considered excessive. Of relevance, the Court held that:…
Continue Reading There Are Limits! Reining In FCA Penalties Pursuant to the Excessive Fines Clause

It’s been a hot summer so far but Federal Risk and Authorization Program (“FedRAMP”) is just starting to heat up. In June, FedRAMP (the Federal government’s program for security authorizations for cloud solutions) released the final Emerging Technology Prioritization Framework, which outlines the prioritization of certain artificial intelligence capabilities. In mid-July, FedRAMP announced its Agile Delivery pilot program, which is a new process for reviewing significant changes without the need for advanced approval. FedRAMP also announced a new technical documentation hub (automate.fedramp.gov) that focuses on provided support to cloud service providers in the development of digital authorization packages. Lastly, just…
Continue Reading Summer Heat Ramping Up: FedRAMP Releases Final OMB Memo and Announces Update on Roadmap Progress, Automation Site Launch, and the Agile Delivery Pilot Launch

On June 28, 2024, in a landmark decision, the Supreme Court overruled the four decade old case Chevron v. Natural Resources Defense Council. This pivotal decision should spur businesses to recalibrate their existing relationship with federal agencies. Indeed, we have already seen industry groups begin to use the overruling to influence agency rulemaking, signaling a future of significant shifts in the regulatory landscape. For those operating in regulated industries—including government contractors, and particularly those navigating the complex world of cybersecurity regulation—understanding the implications of the decision is crucial.
Continue Reading Navigating the New Cybersecurity Regulatory Landscape Post-Chevron

On June 17, 2024, the Department of Justice (“DOJ”) announced the latest settlement under its Civil Cyber-Fraud Initiative (“CCFI”) (previously discussed here).[1] The settlement resulted in a total of $11,300,000 in payments from two consulting companies (Guidehouse, Inc., the prime contractor, which paid $7,600,000; and Nan Kay and Associates, the subcontractor, which paid $3,700,000) to resolve allegations the two companies violated the False Claims Act by failing to meet cybersecurity requirements in federally-funded contracts.
Continue Reading Latest Cyber-Related FCA Settlement Underscores the Breadth of DOJ’s Civil Cyber-Fraud Focus

For companies in the U.S. that hold certain personal data and U.S. Government-related data, rules stemming from recent Executive Order (“EO”) 14117 on “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern” may create obstacles and new compliance obligations. Under this EO, the Attorney General is charged with issuing regulations to either outright prohibit or impose restrictions on transactions involving bulk sensitive personal data or U.S. Government-related data when such transactions involve a “country of concern.”…
Continue Reading Data, Deals, and Diplomacy: How the Bulk Data Executive Order Will Shape Future Contracts and Security Practices

On May 3, 2024, the FAR Council published an advanced notice of proposed rulemaking (the “Advanced Notice”) seeking to implement Section 5949 of the James M. Inohfe National Defense Authorization Act for Fiscal Year 2023 prohibition on procuring certain covered semiconductor products and services. The Congressional prohibition does not go into effect until December 2027, but the FAR Council was directed to promulgate regulations by December 2025. Though this only is an Advanced Notice at this time, the publication provides government contractors with information crucial to developing compliant infrastructures and preparing for the forthcoming rule’s publication. Interested parties…
Continue Reading FAR Council Releases Rulemaking on Prohibitions for Semiconductors

The U.S. Government continues to increase its Federal investment in space – not for exploration, but rather as a defense strategy – and this continued investment provides significant opportunity for commercial entities to partner with the Federal Government on space projects. On April 2, 2024, the Department of Defense (“DoD”) released its first ever Commercial Space Integration Strategy (the “DoD Strategy”) and, just a few days later, on April 8, 2024, the U.S. Space Force released its Commercial Space Strategy (the “Space Force Strategy”) (together the “Strategies”). The Strategies are complementary and formalize the U.S. Government’s commitment to “making commercial…
Continue Reading The Next Frontier: Key Takeaways from the New U.S. Government Commercial Space Strategies

On March 28, 2024, the Office of Management and Budget (“OMB”) issued Memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence (the “Memo”). This is the final version of a draft memorandum OMB released for public comment on November 1, 2023. The Memo primarily focuses on agency use of AI and outlines minimum practices for managing risks associated with the use of AI in the federal government. The Memo also provides recommendations for managing AI risks in federal procurement of AI that industry should keep in mind, specifically entities developing AI tools to sell to…
Continue Reading Better Safe Than Sorry: OMB Releases Memorandum on Managing AI Risks in the Federal Government

On April 1, 2024, the FAR Council published a new Final Rule that establishes FAR Part 40 – but without any new provisions of substance. This Final Rule becomes effective on May 1, 2024. Subsequently, the FAR Council published a Request for Information (“RFI”) on April 10, 2024. The RFI seeks feedback on the scope and organization of FAR Part 40 and is open for comment until June 10, 2024.
Continue Reading Not an April Fools Joke – FAR Part 40 Final Rule Has Been Published

The Federal Government spends more money annually through grants and cooperative agreements than it does through Federal contracts. Historically, these dollars primarily have been awarded to public sector and non-profit entities. That’s changing. Post-Covid, increasingly more Federal grant and cooperative assistance dollars are finding their way to for-profit entities (whether as recipients (i.e., prime contractors) or subrecipients (i.e., subcontractors)). Sheppard Mullin partner Ryan Roberts and Capital Edge Consulting CEO Chad Braley joined the Public Contracting Institute’s Practical Matters podcast to discuss what commercial companies need to know before accepting a Federal grant (and additional information can be found in our…
Continue Reading Unlocking Opportunities: Ryan Roberts and Chad Braley Discuss Grant Awards to Commercial Entities

The Cybersecurity and Infrastructure Security Agency (“CISA”) recently released its new Proposed Rule pursuant to the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (“CIRCIA”), which was published in the Federal Register on April 4, 2024 and is open for public comment through June 3, 2024. The Proposed Rule will be published in Part 6 of the Code of Federal Regulations, in a new Section 226, as part of the Department of Homeland Security’s regulations on Domestic Security.
Continue Reading CISA Cyber Incident Reporting for Critical Infrastructure Will Significantly Impact Government Contractors, Suppliers, and Service Providers