Government Contracts

Overview

​The Government Contracts Practice Group helps clients identify, mitigate and eliminate the contractual, civil and criminal risks of doing business with the government, and when necessary defend or enforce client interests so that they can achieve their business objectives. 

Our Government Contracts lawyers are primarily located in Washington, D.C., with others in Dallas, Denver, New York, Los Angeles and Paris.  We regularly handle engagements throughout the United States and the world.  Our areas of expertise include:

  • Litigation, bid protests and dispute resolution
  • Compliance counseling
  • Corporate transactions involving government contractors
  • Cost accounting standards and government audit defense
  • Suspension and debarment
  • Crisis management and internal investigations
  • False Claims Act compliance, investigations and litigation
  • Bid and proposal review and advice
  • Complex state and local procurements
  • Protection of intellectual property in government contracting

Gibson, Dunn & Crutcher's Government Contracts Practice Group represents clients in all aspects of doing business with U.S. federal, state and local, as well as non-U.S., governments.  Our lawyers have the expertise to provide cradle-to-grave counseling on all government contracting matters.

We have a reputation for advising on unique, high-stakes issues where only the best will do.  From litigation with the U.S. federal government to guiding public sector clients through complex business transactions, the group is routinely retained to handle first-impression and enterprise-critical matters. 

Experience and Recent Representations

Our lawyers excel at guiding clients through all stages of litigation, and we specialize in complex, high-stakes disputes involving matters of first impression.  The litigation risk experienced by contractors and subcontractors performing under federal, state and local contracts and grants is unique, and requires litigators with specialized knowledge.  Our team of lawyers has a deep understanding of the vast array of statutes, regulations, case law and other requirements that continue to generate a growing number of disputes.   

We have significant experience practicing before the Court of Appeals for the Federal Circuit, Court of Federal Claims, boards of contract appeals and other state and federal courts throughout the United States.  In addition to these traditional venues for government contracts litigation, our group's members routinely guide clients through dispute proceedings in non-U.S. tribunals, international arbitrations and specialized quasi-judicial regulatory hearings.   

Our deep bench of litigators has experience with virtually all types of cases involving government contractors.  We routinely handle appeals of government and contractor claims, and specialize in complex matters involving key areas such as:  

  • The U.S. government's Cost Accounting Standards and Federal Acquisition Regulation cost principles
  • Construction, engineering and contingency contracts
  • Prime-sub disputes

In these areas, we often create new law with industrywide ramifications.  Our lawyers are also adept at prosecuting and defending protests of contract awards at the Government Accountability Office and Court of Federal Claims. 

While proud of our hard-fought victories in the courtroom, our lawyers realize that the best outcome often involves resolving the dispute without the time and cost of formal litigation.  We routinely represent clients in all forms of alternative dispute resolution, including complex multiparty settlement negotiations and settlement with government enforcement agencies.  

Recent representations include:

  • Represented Raytheon Company in a precedent-setting Cost Accounting Standard 413 case affirming a $78 million judgment (with interest) in favor of Raytheon for CAS 413 "segment closing" adjustments due as a result of Raytheon's sale of four business units, and denying government counterclaims of $18 million.
  • Represented Sikorsky Aircraft Corp. in a precedent-setting Cost Accounting Standard 418 case affirming judgment in favor of Sikorsky in defense against the government's $80 million claim for an alleged CAS 418 noncompliance.
  • Represented Fluor Intercontinental, Inc in an alternative dispute resolution procedure, successfully recovering $28.5 million for the company, representing the full amount of the government's cost disallowance plus Contract Disputes Act interest and attorney's fees.
  • Won partial dismissal for Fluor Corp. of the government's claim for alleged Cost Accounting Standard 403 noncompliance on statute of limitations grounds.
  • Succeeded in convincing agency to take corrective action, on behalf of Casals & Associates, Inc., in response to a Government Accountability Office bid protest challenging contract awards made by the U.S. Agency for International Development for international rule of law and human rights services under a five-year multiple award procurement worth up to $500 million.
  • Successfully defeated government cost disallowance for Space Gateway Support, LLC, and recovered the full amount claimed for costs of accrued sick leave termination payments.
  • Successfully defeated government cost disallowance for SRI International and recovered the full amount claimed for the cost of maintaining letter of credit facility to secure long-term bonds.

Our lawyers are regularly involved in corporate, finance, program and contract matters concerning the deployment of new technologies.  We have helped fashion business structures to achieve business objectives, such as forming LLCs to perform government contracts.  We have also aided in developing enterprise, financial and regulatory strategies for technology-driven projects. 

We have substantial experience in project design and counseling on multiparty enterprises in such ambitious system-development efforts as a reusable commercial space launch vehicle, space shuttle resupply systems, ballistic missile intercept vehicles, surface-to-air missile systems, electronically steerable array radars and advanced civil aircraft.  Our capabilities in these areas include in-depth understanding of highly specialized policy environments and regulatory regimes, both civil and military.​

Government contractors operate in one of the most highly regulated industries in the world.  They face a maze of regulations, statutes, agency guidance and judicial opinions that affect virtually all aspects of their operations.  In this current climate of heightened scrutiny, compliance issues can rapidly degrade a contractor's balance sheet and result in civil and criminal enforcement actions that can threaten a contractor's very existence.  

Our group regularly provides the following compliance-related services: 

  • Design and implementation of companywide compliance programs including drafting policies, procedures and employee handbooks covering topics such as general ethics obligations, gifts and gratuities, procurement integrity, organizational conflicts of interest, cost and pricing issues, labor charging and estimating systems, and technical data and patent rights
  • Employee training on all compliance-related topics
  • "Compliance checkups": auditing company policies and procedures to identify areas of potential compliance risk
  • Counseling regarding policies and procedures to ensure compliance with the Truth in Negotiations Act
  • Counseling regarding General Services Administration (GSA) Schedule contracting and adherence to the most favored customer/price reduction clause requirements 

Our lawyers are deeply skilled in designing, implementing and supporting government contracts compliance programs, as well as providing compliance counseling on discrete issues.  Whether the matter involves designing a compliance program from scratch or providing advice on existing compliance risks, we focus on giving tailored and practical counsel that can be immediately translated into action.  Our Government Contracts lawyers also regularly work with Gibson Dunn subject matter experts in other fields to ensure that our compliance solutions are enterprise-wide and include consideration of obligations imposed on our clients through compliance regimes that are not specific to government contracting.  ​

Gibson Dunn is among the preeminent U.S. law firms in aerospace and defense industry merger and acquisition (M&A) work.  Our Government Contracts group regularly collaborates with our corporate transactional lawyers to provide our specialized government contracting expertise.  This allows purchasers and sellers of government contractors to close deals and obtain significant insights into a host of factors affecting the pricing and viability of a contemplated transaction, such as:

  • Compliance and litigation risk
  • Novation agreements
  • Cost Accounting Standards implications
  • Intellectual property protections
  • Export restrictions
  • Foreign ownership and security concerns

In addition to significant experience in the M&A field, our lawyers often provide expert counsel to clients regarding government contracting issues inherent in a wide range of other corporate transactions, including:

  • Spin-offs and reorganizations
  • Joint venture formation
  • Prime-sub and cooperative agreements
  • Intellectual property licensing agreementsli>

Our lawyers are also experienced in advising current and prospective equity and debt holders of government contractors, as well as providing specialized government contracts counsel to corporate boards and independent board committees. 

Government contractors face a business climate unlike almost any other: The government often seeks to disallow hundreds of millions of dollars incurred in performance of a contract years after the fact.  Significant annual profits can be erased on the basis of a single audit report from the Defense Contract Audit Agency (DCAA) or civilian agency Office of Inspector General (OIG).  This audit risk is substantially increased by the unique and often opaque set of rules governing government contract cost and pricing, including the Federal Acquisition Regulation cost principles and Cost Accounting Standards. 

Our lawyers specialize in representing clients through all aspects of DCAA and OIG audits, from submitting the incurred cost proposal to litigating a claim following an audit report questioning costs.   

Recent representations include:

  • Represented Raytheon Company in a precedent-setting Cost Accounting Standard 413 case affirming a $78 million judgment (with interest) in favor of Raytheon for CAS 413 "segment closing" adjustments due as a result of Raytheon's sale of four business units, and denying government counterclaims of $18 million.
  • Represented Sikorsky Aircraft Corp. in a precedent-setting Cost Accounting Standard 418 case affirming judgment in favor of Sikorsky in defense against the government's $80 million claim for an alleged CAS 418 noncompliance.
  • Represented Fluor Intercontinental, Inc in an alternative dispute resolution procedure, successfully recovering $28.5 million for the company, representing the full amount of the government's cost disallowance plus Contract Disputes Act interest and attorney's fees.
  • Won partial dismissal for Fluor Corp. of the government's claim for alleged Cost Accounting Standard 403 noncompliance on statute of limitations grounds.

Suspension or debarment from government contracting can easily represent the death knell for clients reliant upon government-funded projects, either as a prime or sub-contractor.  Spurred by pressure from Congress, the federal government, as well as state and local governments, has dramatically increased suspension and debarment activity in recent years.

Our lawyers have experience assisting both major federal government contractors and other entities that deal individually with the government (e.g., those that accept payment for filling pharmaceutical prescriptions).  We guide them in working with suspension and debarment officials to neutralize concerns regarding present responsibility, and we help them implement satisfactory corrective action in order to continue their government work.  We have helped clients successfully avoid suspension or debarment in the face of government show-cause notices and notices of proposed suspension or debarment.  Our lawyers also have significant familiarity with negotiating administrative agreements to avoid a suspension or debarment, or to lift one already in place.  

In addition to our work involving responses to government inquiries, we routinely advise clients of downstream suspension or debarment risk related to civil or criminal fraud matters.  We also counsel regarding possible criminal violations of laws unrelated to government contracts, such as the Clean Air Act and the Clean Water Act.  Our proactive approach of cooperatively working with suspension and debarment officials has allowed clients faced with serious criminal and civil liability to avoid the additional, devastating loss of access to government contracts.​

With the unique political pressures and regulatory requirements inherent in the government procurement industry, it is often not a question of if but when the next crisis will hit.  Our lawyers excel at providing multidimensional crisis management expertise when decisions must be made quickly and our clients' reputations are on the line.  Whether it's guiding them through internal emergencies or those brought about by government investigations and enforcement activity, our clients routinely turn to us when only the best will do.  Our lawyers have assisted several clients in making "mandatory disclosures," working collaboratively with the client from the internal investigation through the final government audit.

Our lawyers also possess significant experience in conducting internal investigations ranging from examinations of specific incidents of alleged misconduct to program and enterprise-wide reviews.  Our group has particular proficiency in managing complex internal investigations requiring coordination among multiple sites or business units throughout the world, as well as managing internal investigations in anticipation of litigation or governmental inquiries.  We routinely work in concert with Gibson Dunn subject matter experts in related fields, including White Collar Defense and Investigations and the U.S. Foreign Corrupt Practices Act (FCPA), to target government-contract-specific issues within broader investigations.​

Government contractors continue to face a significant increase in enforcement activity under the civil and criminal False Claims Acts, both through direct government actions and those brought by private qui tam relators.  Our lawyers have significant experience counseling clients on all aspects of False Claims Act compliance.  They assist with designing and implementing compliance programs, help clients conduct internal investigations regarding potential and alleged violations, and defend against civil suits and criminal prosecutions.  Across all areas, we excel at guiding clients through one of the primary legal risks facing the industry.  We are one of the only U.S. firms with experience taking a matter from internal investigation through district court litigation and appeal to argument before the U.S. Supreme Court.​

Recent representations include:

  • Obtained a decision from the D.C. Circuit vacating a jury verdict against Science Applications International, Inc. and holding that the trial judge erred in allowing for proof of scienter based on "collective knowledge."
  • Won summary judgment in Los Angeles Superior Court on behalf of Parsons-Dillingham Metro Rail Construction.

Our lawyers have significant experience assisting clients in preparing bids and proposals for government contracts.  A great bid or proposal can mean not only new work, but also increased protection from bid protests and downstream audit risk.  In addition to working with clients to draft bids and proposals, we also regularly provide analyses of government contract solicitations to help our clients understand exactly what requirements they may be accepting by submitting a bid or proposal. ​

Our lawyers are skilled in state- and local-level government contracting issues.  We routinely counsel clients regarding opportunities with these government entities, and participate in negotiation and drafting of multimillion-dollar state procurement contracts.  We also help our clients navigate multifaceted state procurement regulations and statutes, as well as reconcile these requirements with their federal obligations.

Our lawyers have particular expertise in negotiating and drafting complex information technology agreements.  We serve as regular outside counsel to leading professional services, systems integrators, software developers and management consulting firms.  Gibson Dunn Government Contracts lawyers took a key role in successful reforms of California's information technology procurement practices, and they are knowledgeable about IT contracting practices in many other states.  We have represented telecommunications companies, financial institutions, manufacturers and many others in a wide array of technology-related arrangements.​