posted by Akin Gump
The American Recovery and Reinvestment Act of 2009 (”Recovery Act”) included $7.2 billion of new spending on broadband infrastructure deployment and related broadband matters. The National Telecommunications and Information Administration (NTIA) and the Rural Utility Service (RUS), a division of the U.S. Department of Agriculture, recently released a joint Notice of Funds Available (NOFA) outlining the application procedures, conditions applicable to the funding, and application evaluation criteria for the first round of Recovery Act broadband funding. Approximately $4 billion of funding is available under this NOFA. Remaining Recovery Act broadband funding is expected to be awarded in two subsequent funding rounds pursuant to separate notices. NTIA and RUS reserve the right to modify the funding rules for such subsequent funding rounds.
Click here to read the full alert.
posted by Akin Gump
In March 2009, President Obama issued a memorandum outlining new restrictions on lobbyists concerning the American Recovery and Reinvestment Act of 2009 (”Recovery Act”). (Please click here to read our alert on the March 20 memorandum.) Subsequently, the White House announced that the restrictions would be revised and additional guidance would be forthcoming from OMB. (Please click here to read our alert on the May 29 announcement). On July 24, 2009, OMB issued revised guidance.
While the Administration’s emphasis continues to be on increased disclosure of lobbyist communications regarding Recovery Act issues, the latest guidance clarifies that the prohibition on oral communications only applies during a specific time period and applies to all communications, not just those made by federally registered lobbyists. As has been the case since the May 2009 announcement by the White House, lobbyists may attend and participate in phone calls and meetings with federal officials so long as the communications are not within the covered period.
Click here to read the full alert.
posted by Akin Gump
On May 29, 2009, the White House announced that it is revising restrictions placed on lobbyists from communicating with executive branch officials regarding funds under the American Recovery and Reinvestment Act (Recovery Act). More detailed guidance is forthcoming from the Office of Management and Budget (OMB), but the statement released on Friday makes clear that the absolute ban on lobbyists communicating orally or participating in meetings with executive branch officials has been revised.
President Obama issued a memorandum on March 20, 2009 prohibiting registered lobbyists from having oral communications with government officials about specific Recovery Act projects or applications and requiring that government officials only consider the views of registered lobbyists on such issues if the views were submitted in writing. The memorandum also required that oral discussions of general policy matters regarding the Recovery Act made by registered lobbyists be publicly disclosed. (Please click here to read our alert on the March 20 memorandum.)
Read the full alert here.
posted by Akin Gump
This post can also be found at Akin Gump’s blog of labor issues, the Washington Labor and Employment Wire.
On May 29, 2009, the Wage and Hour Division (WHD) released a memorandum to all federal agencies and the District of Columbia regarding federal and federally-assisted construction work funded in whole or in part by the American Recovery and Reinvestment Act (ARRA). Currently, the Davis-Bacon Act requires that each contract over $2,000 for the construction, alteration, or repair of public buildings or public works to which the United States or the District of Columbia is a party must include a provision stating the minimum wages laborers and mechanics are paid. The Secretary of Labor determines the prevailing wages for the corresponding classes of laborers and mechanics employed on projects.
Section 1606 of the ARRA indicates that the Davis-Bacon prevailing wage requirement broadly applies to ARRA-funded construction projects. Projects receiving such funding must follow the requirements located in the DOL regulations at 29 C.F.R. Parts 1, 3 and 5. This provision explicitly overrides any limitation to Davis-Bacon coverage contained in other Davis-Bacon related Acts. Thus, even if a construction project receives funding from multiple statutes, the ARRA prevailing wage requirement governs if the project receives ARRA funding.
Section 1606 of the ARRA does not apply to the following contracts: (1) tribal contracts with the Bureau of Indian Affairs involving repair and restoration of roads, school improvements, repairs and replacement construction, and detention center maintenance; (2) tribal contracts with the Department of Health and Human Services, Indian Health Services involving Indian health facilities construction projects; and (3) contracts receiving project-based rental assistance funding from the Department of Housing and Urban Development.
The WHD provides additional information for construction projects receiving ARRA funding on its website.
posted by Akin Gump
On April 14, 2009, the Department of Justice signaled that it is devoting “significant resources” to the detection and prosecution of collusion or other criminal violations of the antitrust laws that may be committed in connection with Recovery Act funds. The Antitrust Division notes on its new Recovery Initiative Web site that, “[t]he potential risk of fraud and collusion increases dramatically when large blocks of funds, such as those associated with the Recovery Act, are quickly disbursed.” In fact, Earl Devaney, the head of the government’s Recovery Accountability and Transparency Board, recently estimated that as much as 7 percent—approximately $55 billion—of Recovery Act funds may be lost to fraud.
Because of this perceived increased risk of criminal conduct, the Division is providing training to help inspectors general and other investigative arms of agencies receiving funds detect and prevent collusion and other types of procurement fraud. To that end, the Division has created the “Red Flags of Collusion” checklist to use as a guidepost for the IGs to detect anticompetitive conduct. The Red Flags of Collusion are set forth in a four-part “MAPS” (market, applications, patterns and suspicious behavior) analysis on the Web site. Under each step of the analysis, the Division sets forth attributes of a procurement or grant award action that would suggest a greater likelihood of collusion, such as (M) few vendors, (A) common sources for two or more proposals, (P) use of losing or withdrawn bidders as subcontractors to winning bidders and (S) submission of multiple proposals.
While designed to help government inspectors general prevent or detect fraud, companies seeking to supply services or procure grant awards in connection with Recovery Act funds can apply MAPS to their individual circumstances as part of a general antitrust compliance effort to help identify whether they are participating in a procurement or grant award action that may involve or suggest the possibility of collusion. While prevention of fraud is one goal of the Division’s effort, the Division made clear that if prevention efforts fail, the Division will “investigate and prosecute any criminal conduct directed at thwarting competition” for Recovery Act funds.
The Antitrust Division’s Recovery Initiative Web site can be found here.
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Federal agencies release weekly reports detailing their stimulus-related activities. We have collected the most recent reports here:
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Many of the OIGs are in various stages of implementing Recovery Act oversight initiatives. Some have comprehensive plans in place and others are, in all likelihood, currently working on them. Looking at these disparate initiatives as a whole, one can discern a few meaningful trends.
First, we are going to see increased interagency coordinated oversight and enforcement activity. This is a trend that has been developing within the IG and federal law enforcement community for several years now, but, with the heightened focus on Recovery Act accountability, this trend is going to accelerate. This means that government-fund recipients could potentially face investigations by as many as a half dozen OIGs at once.
Second, the OIGs are diligently attempting to educate their parent agencies and the fund recipient community on “fraud indicators,” in order to try and prevent fraud in the first place. Recovery Act fund recipients should stay abreast of these educational initiatives and incorporate this information into their own internal compliance program activities.
Third, all the OIGs connected with agencies that received stimulus funds to spend also received additional financial resources to increase their oversight capabilities. A review of the OIGs that have produced Recovery Act oversight plans makes clear that almost all of them are gearing up by hiring new auditors and investigators to carry out the oversight mission.
Finally, OIGs are together taking increased steps to share information and “best practices” in order to develop a sophisticated bench of OIG auditors and investigators across the government. OIGs that might have been sleepy backwaters in years past may increasingly become as smart and active as the most historically robust OIGs. As a result, companies should be vigilant about compliance efforts on federal programs that in the past may not have received significant scrutiny.
posted by Akin Gump
On March 31, 2009, the Department of Transportation (DOT) OIG issued an audit report providing its analysis of the oversight challenges facing the DOT regarding Recovery Act spending. The three major oversight challenges noted were ensuring that DOT grantees properly spent Recovery Act funds, implementing new accountability requirements and programs required under the Act and combating fraud, waste and abuse. Regarding the latter, the OIG cited as two focus areas the need to enhance fraud awareness within the agency and among its contractors and the need to take timely and effective action to suspend and/or debar stimulus fund recipients that defraud DOT programs. In addressing fraud awareness, the report noted the following key fraud schemes that have plagued past DOT projects: false claims for materials and labor, bribes related to contracts for materials or labor, product substitution and disadvantaged business enterprise fraud. The report also provided a list of “red flag” fraud indicators typically associated with fraud schemes. Regarding suspension and debarment, the report noted that DOT needed to dramatically improve its processes in order to take more timely actions.
See the audit report here.
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On March 19, 2009, the Inspector General for the Department of Energy (DOE), Gregory H. Friedman, testified before Congress regarding the Recovery Act oversight initiatives already underway at the DOE OIG. The DOE is slated to receive and distribute approximately $40 billion of Recovery Act funds for various science, energy and environmental programs and initiatives. Additionally, the DOE has been authorized to make or guarantee loans totaling up to $127 billion for innovative technologies as well as auto industry advancements. IG Friedman described the DOE-OIG’s oversight strategy and numerous specific steps it would entail, including, (1) evaluating the internal control structure for the most significant programs; (2) evaluating the controls established by the primary recipients over the use of funds; (3) examining the use of funds through transaction testing at the recipient or end-user level; (4) providing fraud awareness briefings to DOE officials, contractor officials and fund recipients; (5) enhancing existing relationships with other law enforcement agencies; and (6) expanding its fraud hotline capabilities. Additionally, Mr. Friedman is among the nine IGs serving on the Recovery Accountability and Transparency Board (RATB), and, thus, DOE-OIG oversight efforts, like those of the other RATB-represented IGs, will be closely coordinated with it.
See testimony here.
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The Office of Management and Budget (OMB) has released new guidance for federal agencies carrying out programs and initiatives in the Recovery Act. The Guidance is intended to “establish and clarify the required steps Federal agencies must take to meet the accountability objectives” outlined in the Recovery Act.
To download a copy of the OMB’s new guidance, please click here.
