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Welcome to the FH+H blog, Legal Protein, lean legal news you can use! 

Partner Jack White Judges at Innovation Awards Showcase

February 20, 2017

Partner Jack White will judge nominees for the Professional Service Innovator of the Year award at the 2017 Greater Washington Innovation Awards Showcase from 7:30 a.m. to 11 a.m. March 3 at the Fairview Park Marriott.

The Innovation Awards Showcase will include booths about innovative products, services, and solutions as well as opportunities to network with professionals who are evolving their industries.

Guests will have the chance to watch presentations from award nominees that will be judged live. Attendees can also vote for their favorite innovation to win the Business Choice Award.

Other award categories include Health and Life Sciences Innovator of the Year, Hospitality, Tourism and Entertainment Innovator of the Year, Marketing and Advertising Innovator of the Year, Professional Service Innovator of the Year, Public Service Innovator of the Year, Technology Innovator of the Year for Emerging Businesses, and Technology Innovator of the Year for Mature Businesses.

Click here to register.

 


GovCon University Offers Instruction for Selling to the Federal Government

February 09, 2017

Would you like to sell your product or service to the largest purchaser in the world?

The law firm of FH+H is pleased to announce a new offering for emerging to mid-market businesses: GovCon University.

GovCon University will provide knowledge and instruction in a modular course format for entrepreneurs who would like to sell their products or services to the federal government. It will also offer instruction for established government contractors who want to avoid some of the legal pitfalls of doing business with federal agencies.

Course topics include: Contract Essentials, FAR, Export Control, NDAs, Teaming Agreements, Bid Protests, and a how-to for veteran- and woman-owned businesses on utilizing their designations for set-aside and sole source contracts.


 Regulatory and Business Challenges in the Government Contracting Environment 

Presented by GovCon University

 

March 9, 2017

1 p.m.–5 p.m. (reception to follow)

 

Stetson University College of Law, Tampa Law Center

1700 North Tampa Street – Tampa, Florida 33602 – Room 136

 

For more information and to register, contact FH+H Partner Kate Cooper at kcooper@fhhfirm.com.

Registration deadline is March 3, 2017. Fee of $99 waived for attendees registered by the deadline.


List of 25 Top Veterans Recognizes FH+H Counsel Phillip Carter

February 02, 2017

Counsel to FH+H Phillip Carter earned a spot on The Mighty 25, an annual list honoring veterans who are expected to do incredible, meaningful work across the nation over the next year.

Carter is dedicated to working with donors and organizations in order to help them understand the needs of veterans. Additionally, his research about issues facing veterans and military personnel helps to inform leaders about making positive differences in veterans' lives.

Carter currently works as a Senior Fellow and Director of the Military, Veterans, and Society Program at the Center for a New American Security, and he also has extensive government and military experience. Carter served in the Army for nine years, worked the Obama campaign as the National Veterans Director, and went on to serve as a Deputy Assistant Secretary of Defense.

With the effort Carter has put into helping the veteran community so far, FH+H is excited to see his next steps. 

To read more about Carter and other veterans on The Mighty 25 list, visit We Are The Mighty's website.


Partner Rich Gross Moderates Panel on New Administration and Gov Con Industry

January 30, 2017

Partner Rich Gross will act as the moderator for a panel about new government leaders and their potential effects on the government contracting industry at Northern Virginia Chamber's annual Gov Con Symposium, taking place from 7:30 a.m. to 11:30 a.m. Tuesday, Feb. 21 at the Hilton McLean Tysons Corner.

"Gov Con Symposium: Post-Transition Centers of Gravity" will include three panels: Government Leaders, a discussion on the new administration, the government contracting industry, and how the two can come together to innovate and collaborate; Strategies for Driving Value, a look at how to pivot the post-transition environment to address new opportunities and improve investment strategies; and Centers of Gravity, a how-to on navigating the post-transition marketplace in order to identify future contracting opportunities and develop strategies to pursue them.

Click here to register for the event. Early Bird pricing runs through Jan. 31.


FH+H Successfully Defends Client Award of $100 Million Government Contract

January 25, 2017

FH+H Partners Milt Johns and Rich Gross, along with the FH+H government contracts team, successfully defended two protests on behalf of a service-disabled, veteran-owned small business (SDVOSB) corporate client.

The client had been awarded a contract for government support services in excess of $100 million. Competitor companies then lodged protests of the contract award with the Small Business Administration (SBA) based on the client's small business status and SDVOSB status.

The FH+H government contracts team answered and opposed the protests, both of which were then dismissed by the SBA. Dismissal of these protests now clears the way for the client to begin performance under the contract.


Partner France Hoang Discusses U.S. Military Personnel Reform

January 20, 2017

FH+H Partner France Hoang will take part in a panel discussing the Total Volunteer Force (TVF) summary report from 4 p.m. to 5:30 p.m. Feb. 2.

"Total Volunteer Force: Blueprint for Pentagon Personnel Reform" will focus on Dr. Tim Kane's TVF concept, which calls for a reorganization of the U.S. military's personnel system in order to improve talent management.

The event, hosted by the Hoover Institution, will feature a presentation from Dr. Kane, a keynote speech from Admiral Gary Roughead, and a discussion with attendees.

Click here to register to attend.

 


Partner Milt Johns Quoted in Bloomberg News Federal Contracts Report

December 22, 2016

Partner Milt Johns discussed the effectiveness of bid protests at the Government Accountability Office (GAO) in a Bloomberg BNA Federal Contracts Report called Bid Protest: Agencies Roll the Dice as GAO Sustain Rate Nearly Doubles.

"Nearly one in two protesters is receiving some relief as a result of the GAO bid protest process," Johns said in the article.

Bloomberg reported a 1 percent increase in the GAO's effectiveness rate, which takes into account instances when protesters persuaded the GAO to sustain a protest as well as instances when protesters convinced an agency to take corrective action in order to fix a procurement error. The article also cited a 6 percent growth in the number of protests filed at the GAO from 2015 to 2016.

The full article is available on Bloomberg BNA's website.


Partner Milt Johns Lectures at Government Contractors Council Breakfast

December 16, 2016

MANASSAS, Va.– FH+H was a proud sponsor of the December Prince William County Chamber of Commerce’s monthly Government Contractors Council Breakfast. The featured speaker at the breakfast, Mark Amtower, spoke on “Leveraging LinkedIn as Part of Your Business Development Strategy.” FH+H Partners Milt Johns and Rich Gross participated in the breakfast, where Mr. Johns spoke to the audience of small business owners, government contractors, and service providers about FH+H’s GovCon Practice Group.

For more information on FH+H’s Government Contracts Practice Group, please visit www.fhhfirm.com/our-practices/government-contracts



The Trade Compliance Update - Three

November 03, 2016

The Trade Compliance Update

By: Jennifer S. Huber  and Adam Munitz
November 3, 2016

Welcome to the Trade Compliance Update- a weekly FH+H publication that discusses recent trade compliance matters and the manner in which international businesses can learn from such matters and reduce their legal and regulatory risk profiles.

On October 5th, the U.S. State Department entered into a Consent Agreement with Marc Turi (“Turi”) and Turi Defense Group, Inc. (“TDG”), after alleging that Turi and TDG violated Section 127.1 of the International Traffic in Arms Regulations (“ITAR”) by engaging in the unauthorized brokering of defense articles and submitting a proposal to a proscribed party without the requisite prior approval.  The facts outlined in the Proposed Charging Letter are relatively straightforward, but the case as a whole provides a number of interesting takeaways for those that are presently brokering, or are considering brokering, defense articles or defense services.

Overview

According to the Proposed Charging Letter, in early 2011 Turi and TDG requested prior approval from the Directorate of Defense Trade Controls (“DDTC”) at the U.S. Department of State to broker the sale $195 million worth of Eastern European arms and ammunition to the Libyan Transitional National Council (the “TNC”).  DDTC rejected this request.  Soon afterwards, Turi and TDG requested, and received, prior approval from DDTC to broker the sale of $267 million worth of Eastern European arms and ammunition to the Government of Qatar.  However, according to the Proposed Charging Letter, Turi and TDG immediately began working with the original equipment manufacturer and others to divert the arms and ammunition that were authorized for Qatar to the TNC.  Furthermore, in June, 2011, Turi and TDG sent to Egypt a “Confirmation Letter” for execution by the Prime Minister of the TNC, Mr. Mahmoud Jibril, under which Mr. Jibril would confirm the intended end use of various arms and ammunition that were practically identical to those referenced in the Qatar brokering license.  Ultimately, these arms and ammunition were not successfully delivered to Libya, for reasons unspecified in the Proposed Charging Letter.

The Office of Defense Trade Controls Compliance (“DTCC”) alleged that, “by acting to facilitate the transfer of foreign-origin defense articles to Libya without obtaining the required license or written approval from [DDTC][,]” Turi and TDG violated Section 127.1(a)(6) of the ITAR, which stipulates that “it is unlawful…[t]o engage in the business of brokering activities for which registration, a license, or written approval is required by this subchapter without first registering or obtaining the required license or written approval from [DDTC].”[1] DTCC also alleged that Turi and TDG violated Section 127.1(d)[2] of the ITAR on the basis that the Confirmation Letter sent by Turi and TDG to Mr. Jibril constituted a “proposal” to a proscribed country under the ITAR,  for which Turi and TDG did not secure prior approval.

Under the terms of the Consent Agreement, Turi and TDG are prohibited “from participating in activities subject to the ITAR” for a period of four years, and are liable for a suspended penalty of $200,000, which will be waived if, when the Consent Agreement expires, Turi and TDG have not breached the Agreement.  Notably, neither Turi nor TDG were debarred by the U.S. State Department.

Key Takeaways

1. The definition “brokering activities” is very broad.  Arms brokering is a high-risk endeavor, in part because the regulatory threshold is so low and undefined.  One need look no farther than the definition of the term “brokering activities” under ITAR Section 129.2(b) to understand that this is the case: “Brokering activities means any action on behalf of another to facilitate the manufacture, export, permanent transfer, reexport, or retransfer of a U.S. or foreign defense article or defense service, regardless of its origin.”  The non-exclusive list of examples of brokering activities that follows this definition only serves to demonstrate the sheer breadth of the term:

a. Financing, insuring, transporting, or freight forwarding defense articles and defense services; or
b. Soliciting, promoting, negotiating, contracting for, arranging, or otherwise assisting in the purchase, sale, transfer, loan, or lease of a defense article or defense service.

As a result of the manner in which this essential term is defined, arms brokers frequently find themselves engaging in brokering activities before they even realize they are doing so.  In Turi’s case, the precise nature of his activities is unclear, but the Proposed Charging Letter does make clear that he and TDG “communicated with an Eastern European manufacturer of defense articles, logistics providers, and others in furtherance of diverting to Libya the approved [Qatar] transaction[,]” and subsequently “communicated with persons in Qatar, the United Arab Emirates, and Libya regarding the Libyan weapons deal.”

2. Prior approval is required for proposals to proscribed countries.  Manufacturers, exporters, and brokers often make the mistake of assuming that the mere provision of a proposal to a foreign person, where the proposal is devoid of any controlled technical data, is categorically harmless.  However, this is not the case, and the extent to which manufacturers, exporters, and brokers can provide proposals to foreign persons without prior approval depends on the nationality of the foreign person and, more specifically, whether he/she is a national of a proscribed country under ITAR Section 126.1.  This restriction is outlined in ITAR Section 126.1(e), which stipulates that,

[n]o sale, export, transfer, reexport, or retransfer of, and no proposal or presentation to sell, export, transfer, reexport, or retransfer any defense articles or defense services subject to this subchapter may be made to any country referred to in this section (including the embassies or consulates of such a country, or to any person acting on its behalf, whether in the United States or abroad, without first obtaining a license or written approval of the Directorate of Defense Trade Controls. (Emphasis Added).

Essential here is that the terms “proposal” and “presentation” are broadly defined under the ITAR, and in order to qualify as such a communication must simply be made “in sufficient detail that it would permit an intended purchaser to decide to acquire the article in question or to enter into an agreement…”  Note to ITAR Section 126.1(e).  As an example, the ITAR stipulates that “communicating information on the equipment’s performance characteristics, price, and probable availability for delivery would be a proposal or presentation requiring a license or other approval.”  Id.  Thus, in this particular instance, the Confirmation Letter that Turi and TDG sent to Egypt qualified as a proposal, and given that the recipient was a representative of Libya, which remains a proscribed country under Section 126.1, its provision required the prior approval of DDTC.

3. Intent matters, but the U.S. government doesn’t want your policy guidance.  In assessing the various factors that mitigated Turi and TDG’s violations of the ITAR, DTCC took into the consideration that Turi and TDG “conveyed to the Department their belief that they had the authority to engage in brokering activities.”  That DTCC did so is indicative of the fact that, with respect to these types of matters, the U.S. government does weigh the intent of the parties, and exporters, manufacturers, and brokers engaging in voluntary and directed disclosures should make a point of emphasizing in their submissions to the government that their alleged violations were inadvertent (if in fact that is the case).

That said, exporters, manufacturers, and brokers under governmental scrutiny frequently make the mistake of instead emphasizing that their alleged violations are justifiable on the basis that they are in furtherance of U.S. foreign policy.  Indeed, in this case Turi and TDG could have argued that arms exports to the TNC were in the best interest of the U.S. and were consistent with its strategic national security objectives.  The U.S. government, however, does not care for such arguments, and its officials are quick to indicate that regulations such as the ITAR are what enshrine, and implement, U.S. policy.  Accordingly, exporters, manufacturers, and brokers in a position similar to that of Turi and TDG should resist the temptation to set forth policy-based justifications, and should instead focus on demonstrating that their alleged violations lacked any degree of willfulness or intent.

4. Damages are not required, but their absence helps.  When enforcing the ITAR, DTCC is not required to demonstrate that unlawful exports have occurred.  Rather, it is sufficient for DTCC to prove that a manufacturer, exporter, or broker has violated the procedural requirements of ITAR, or acted with the intent to do so.  Indeed, in this instance DTCC alleged that Turi and TDG violated the ITAR despite the fact that they never actually brokered the sale of defense articles to the TNC.  Regardless, DTCC will consider the absence of an actual transfer as a mitigating factor, and it did just that when examining the culpability of Turi and TDG, noting that “the proposal and brokering activities for the transfer of defense articles to Libya did not result in an actual transfer.”  Thus, while exporters, manufacturers, and brokers should be conscious of acts and omissions that violate the ITAR whether or not such acts or omissions resulted in unlawful exports, and should not avoid or delay submitting voluntary disclosures that outline such acts or omissions, they should still ensure that their disclosures note, if applicable, that actual exports did not occur.

5. Fully cooperate and disclose, disclose, disclose!  As noted in the Proposed Charging Letter, Turi and TDG were credited with having fully cooperated with DTCC during its investigation, and, presumably, the fines imposed by the U.S. government were adjusted accordingly. Exporters, manufacturers, and brokers would be wise to take a similarly cooperative posture during inquiries by DTCC.  Turi and TDG did not, however, disclose their violative activities to DTCC, which was, instead made “aware of these unauthorized activities through information provided by the Department of Justice.”  Thus, it is quite possible that Turi and TDG could have received even more leniency, and perhaps even have had their export privileges reinstated in less than four years.  Exporters, manufacturers, and brokers should take note of this, and should endeavor to proactively make DTCC aware of violations themselves while they still have an opportunity to set the tone for the subsequent inquiry.  Otherwise, DTCC may well uncover the violations itself, or with the aid of another U.S. agency, by which point it will have already formed its own opinions and assumed a skeptical investigative posture.

__________________________________

Jennifer S. Huber and Adam Munitz are attorneys in FH+H, PLLC’s International Trade & Transactions Practice.  Focusing primarily on the defense, security, and intelligence sectors, Jennifer and Adam help businesses translate their domestic successes into overseas growth, and assist foreign entities with sensitive investments in, and acquisitions of, U.S. businesses.  Additional information regarding their capabilities and previous representations can be found here.


[1] This appears to be the text of ITAR Section 127.1(b)(2), but it is referenced in the Proposed Charging Letter as the text of ITAR Section 127.1(a)(6).

[2] It appears that DTCC was referring to what is presently Section 127.1(e) of the ITAR.


Partner Kate Cooper Addresses the 5th Annual Florida Defense Expo

October 31, 2016

FH+H Partners Kate Cooper, Milt Johns, and Rich Gross recently attended the Florida Defense Contractors Association’s 5th Annual Florida Defense Expo.  The Florida Defense Expo is an annual forum for military, law enforcement, Homeland Security and other similar organizations to connect with businesses providing products and services to warfighters and first responders.  Ms. Cooper, who runs the FH+H’s Tampa office, was a featured speaker at the Expo. She provided an overview of recent changes and updates in Government Contract law, to include the recent Supreme Court decision in Kingdomware Technologies, Inc. v. United States, an important decision for veteran-owned businesses.  Other Expo speakers included a number of Florida Congressmen, senior officials from US Special Operations Command and the US Navy, and executives from prominent defense contractors.   

For more information on FH+H’s Florida offices or our Government Contract Practice Group, contact us at info@fhhfirm.com 


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