International Government Contracting
International government contracting activities span a spectrum starting with marketing, through contract formation and performance issues, to successfully managing disputes. The legal challenges relating to this spectrum include, Foreign Corrupt Practices Act (FCPA) and U.S. export control support (which continues throughout contract performance); foreign representative/consultant and foreign procurement law guidance; assistance with business structure and foreign tax issues; and negotiation of issues as they arise during performance of the international contract so as to minimize cost growth due to, e.g., customer-demanded performance of out-of-scope work. Finally, most international government contract disputes that cannot be resolved by negotiation are resolved by final and binding international commercial arbitration.
McKenna Long & Aldridge (MLA) Government Contracts attorneys are widely experienced in providing assistance across this spectrum.
MLA’s long-standing and extensive U.S. export controls practice focuses on difficult licensing and enforcement issues presented by the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR); the Export Administration Act and the Export Administration Regulations; and the Foreign Assets Control Regulations. We regularly work with export control officials in the Departments of State, Defense, Treasury, and Commerce. We have handled literally hundreds of State Department, Commerce Department, and Treasury Department Office of Foreign Assets Control matters. Those include internal investigations; decision-making assistance concerning and implementation of voluntary disclosures; responding to and defending administrative investigations; and civil and criminal Justice Department referrals and enforcement actions.
Foreign Corrupt Practices
In any international undertaking, U.S. companies must be mindful of the restrictions and FCPA imposed liabilities. U.S. and EU enforcement activities are increasing rapidly and proper FCPA compliance entails companywide internal monitoring. MLA has vast experience, dating from 1976, when FCPA was passed, in counseling clients as to the most effective ways to avoid liability and in representing them in enforcement proceedings.
International Government Contract Counseling
U.S. companies require specialized counseling in marketing, negotiating, and performing government contracts in foreign countries and for international organizations. The U.S. company will require understanding of the procurement laws and regulations pertinent to the foreign customer. The Foreign Military Sales program has its own panoply of regulations under the Federal Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation (DFAR), and the Security Assistance Management Manual, as does the separately regulated use of FMF credits in direct commercial contracts. The U.S. Agency for International Development (USAID) has it own regulatory requirements for contracts with foreign governments financed by that organization.
Foreign companies participating in the U.S. government contract market must pay attention to the application of the various U.S. laws providing for “buy national” protections, such as the Buy American Act and the Trade Agreements Act, as well as other specialized amendments and requirements. These matters may also affect the U.S. company, selling to the U.S. federal and state and local governments, that plans to import to fulfill contract requirements.
MLA has decades of experience in dealing with these issues on a daily basis. We have developed close relationships in most foreign capitals with strategic partners that have particular experience in the public procurement laws and policies of their country, so that we can provide a seamless web of advice and counsel.
Foreign Ownership and Control of U.S. Businesses
MLA advises domestic and foreign companies on foreign ownership and control of U.S. businesses as regulated by the Committee on Foreign Investment in the U.S. (CFIUS). We advise on U.S. acquisitions by foreign companies and domestic subsidiaries of those companies, and on joint ventures between domestic and foreign companies. We regularly represent businesses before CFIUS. We handle industrial security issues arising from foreign ownership, control, or influence over U.S. classified contracts.
International Claims and Disputes
Performance of foreign contracts requires particular attention to project and legal management of incipient disputes during performance. A “guardian of the specification” must be in place and vigilant; correspondence must be carefully tailored - contemporaneous correspondence in an international commercial arbitration often will decide the case - and comparative cultural negotiation processes must be understood. In the event a dispute must proceed to arbitration, a company should assess the “pros and cons” of agreeing to a short time period for negotiation before entering into the longer and more expensive final and binding international commercial arbitration process.
In such arbitrations, MLA has unparalleled experience in representing private sector companies against foreign sovereigns, and in the private sector arbitrations directly pertinent to international government contracts - such as with teaming members or joint venture partners. We have arbitrated very many of these cases over the years to successful conclusions, as well as working with the client to utilize such proceedings to enhance a settlement from a position of strength. It is more difficult for government bureaucracies to settle cases than a private sector company. Experience in taking these cases to the end and winning is key.
European and International Presence
MLA’s Brussels office is active in the public procurement field, providing counsel with respect to public works and service contracts. This work often entails representing public utilities, telecommunications companies, and large and medium-sized government contractors in both the U.S. and Europe, concerning projected strategic alliances, tender bids and cross-border joint ventures and acquisitions.
This office also assists clients seeking remedies against national or international (e.g., NATO) contracting agencies over unsuccessful bid claims, contract change and performance disputes, as well as related civil litigation and arbitration.
Outside Brussels, MLA works with an established network of law firms in the major capitals of Europe, Asia, the Mid-East, and Latin America that have extensive experience in public procurement law in their countries.
- Numerous voluntary disclosures to both the State and Commerce Departments under International Traffic in Arms Regulation (ITAR), Export Administration Regulations (EAR), and OFAC-administered sanctions programs
- Internal investigations and disclosures concerning transfers of technical data to dual national employees of U.S. multinational corporations
- The first FCPA criminal prosecution to be dismissed by a federal court before submission to jury
- Testimony on behalf of the ABA on the 1988 FCPA amendments, in particular concerning the deletion of the "reason to know" requirement
- The first full CFIUS investigation, representing the U.S. divestor
- The first Commerce Department Office of Antiboycott Compliance voluntary disclosure of numerous failures to report that resulted in no sanctions imposed
- Many FMS and Direct Commercial Contract cases over many years
- Lead counsel in the first FMF criminal fraud case brought by the DOJ
- Lead counsel in the first U.S. federal court case to enforce a foreign-sited arbitral award despite its having been voided in the foreign court; other leading arbitral award enforcement cases that made law
- Over many decades, MLA has represented numerous companies in international commercial arbitrations involving foreign governments as claimant or respondent. We have a distinguished track record of victories and favorable settlements
- ICC International Arbitration in the Middle East and North Africa (MENA) - 2nd Annual MENA Conference
- MLA's Annual Government Contracts Briefing Series
- PCI Masters Academy: Best Practices in International Contracting
- September 6, 2013
- November 2, 2012
- November 2, 2012