doing business with the us federal governmentevents.eventact.com/ivc/select usa seminar - ivc...

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©2014 Greenberg Traurig, LLP. All rights reserved.

Doing Business with the US Federal Government

Meital Stavinsky| [email protected]|

Greenberg Traurig, LLP | gtlaw.com

The Opportunity

> Purchasing Power: The US federal government is the world’s largest purchaser of goods and services, spending over $500 BB annually

> Leading by Example: adoption of certain innovative solutions by the US federal government has proven to assist in encouraging the US public to adopt such solutions

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The Barrier – Buy American

> Buy American Act of 1933 (BAA) (41 U.S.C. 8301) – US federal government preference for awarding procurement contract dollars to domestic companies

> International Free Trade Agreements (FTAs) -- generally provide for reciprocal non-discrimination in government procurement among the signatories to these agreements

> Keep in mind: many rules, many exceptions, and exceptions to the exceptions…

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Buy American – FTAs Countries

> Israel, similarly to Chile, Singapore, Australia and others, is a party to a bilateral agreement with the US. Both the bilateral agreements and the FTAs guarantee signatory countries non-discriminatory treatment in government procurement activities

> China, India and Turkey for example, have an observer status. China is working to accede to the agreement but that is still being negotiated. On the other hand, Hong Kong is a party to the agreement

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Buy American -- Ramifications > The BAA restricts the purchase of items that are not

domestic end products through a price evaluation penalty applied to competing offers of foreign end products (6% or 12% depending if domestic offer is made by a large or small business)

> For Department of Defense procurement, the price evaluation penalty is 50%

> Compliance test – be sure to get familiar with rules and exceptions… for example, when end-product is manufactured in the US with a component made by a non-designated country, but it’s cost is less than 50% of total US components

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Buy American – Application for Evolving Technologies

> BAA is waived for Information Technology that is generally made available to the public on a commercial basis

> Software: programing of some source code in non-designated country is permissible as long as certain subsequent key steps occur in the US or in a designated country

> Cloud Computing: eligibility is determined by the country where the bidder was established regardless of where the contractor’s data center is located

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The General Services Administration

> The acquisition arm of the federal government, the General Services Administration (GSA) establishes long-term government-wide contracts

> The federal government, comprised of more than 60 agencies and nearly 1.7 million civilian workers, acquires most of its goods and services through contracts

> The GSA provides access to over 11 MM commercial supplies and services, at volume discount pricing

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Getting on the GSA Schedule

> Becoming a GSA schedule contractor increases the ability to be awarded federal contracts

> Different contracts are used for different purposes. The primary contract vehicle is the GSA Schedules, or Multiple Award Schedules, program

> However, companies who do not currently hold a GSA contract can still participate by seeking subcontracting opportunities with current contract holders

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GSA -- Resources

> How GSA Buys: Schedule and Contracts (http://www.gsa.gov/portal/content/104109)

> Finding Federal Business Opportunities (www.FedBizOpps.gov)

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http://www.gsa.gov/portal/content/104109

http://www.fedbizopps.gov/


Federal Funding Sources

> The federal government provides funding to carry out Congressional goals through a variety means:

> Federal grants

> Annually providing funds by formulas to recipients such as states, research universities and Land Grant Colleges, etc.

> Appropriations

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Grants

> Federal government “stamp of approval”

> Typically, US Entity/ Person Requirement

> Some requires applying along with a US Strategic Partner

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Resources > Opportunities: agency’s website and at www.Grants.gov

> Some of the agencies that could be relevant for R&D type of projects, depending on your solution’s application:

– Department of Agriculture (USDA)

– Advanced Research Projects Agency-Energy (ARPA-E)

– Environment Protection Agency (EPA)

– National Science Foundation (NSF)

– Defense Advanced Research Projects Agency (DARPA)

– National Institutes of Health (NIH)

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http://www.grants.gov/


Federal Financing Programs

> Federal financing programs were designed in an attempt to provide a solution to companies’ financing needs for manufacturing production scale-up

> Loan and loan guarantee

> Support innovative companies that are typically unable to obtain private financing due to high technology risk

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Department of Energy

> DOE Loan Program provides loan guarantees to private clean energy companies to spur private investment

> A successful beneficiary of the program: Tesla Motors

> Applicant must be located in the US. Foreign ownership or sponsorship of the project is permissible as long as the project is located in the US

> The Advanced Technology Vehicle Manufacturing Loan Program, also provides direct loans (up to 30% of cost) to manufactures of advanced technology vehicles and components

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Department of Agriculture

> The Business and Industry Guaranteed Loans Program (B&I) is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities

> Corporations borrowers or other non-public organization-type borrowers must be at least 51% owned by persons who are either citizens of the US or reside in the US after being legally admitted for permanent residence

> Typically, the total amount of loans to one borrower must not exceed $10 MM

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The Israel-US Binational Industrial R&D (BIRD)

> Mission: stimulate, promote and support industrial R&D of mutual benefit to both the US and Israel

> Offers conditional grants for joint development projects on a risk-sharing basis. BIRD funds up to 50% of each applicant’s R&D expenses associated with the joint project. Repayments are due only if commercial revenues are generated as a direct result of the project. If a project fails, BIRD claims no repayments

> For Fiscal Year 2014, BIRD provided $10 MM in funding for eleven new projects between Israeli and American companies

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BIRD Energy

> US-Israel joint renewable energy and energy efficiency developments. Follows the same rules and procedures as BIRD

> Project outcome should lead to commercialization

> The maximum conditional grant is $1M per project

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The Small Business Innovation Research (SBIR)

> Goal: encouraging domestic small businesses to engage in R&D activities and projects that have the potential for commercialization

> Currently, 11 federal agencies are participating in the SBIR program, with the US Small Business Agency serving as the coordinating agency for the program. Among the participating agencies: USDA, DOD, DOE, DOT, EPA and NASA

> 2013 – $1.9 BB, 5091 awards

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SBIR Award > The Award objectives:

– Phase 1: establish the technical merit, feasibility, commercial potential of the proposed R&D, and determine the quality of performance of the small business. Funding: typically, up to $150K for a period of 6 months

– Phase 2: continue the efforts initiated in Phase 1. Funding: based on the results achieved in Phase 1 and the scientific/ technical merit and commercial potential of the project proposed in Phase 2. Typically, up to $1MM for a period of 2 years

– Phase 3: where appropriate, pursue commercialization

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Eligibility

> Could Israeli companies apply?

> Place of business in the US

> More than 50% controlled and owned by US citizen/ permanent resident alien

> No more than 500 employees including affiliates

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GT Government Law & Policy Overview

> "Law Firm of the Year - Government Relations" in the 2014 edition of U.S. News - Best Lawyers

> Our team includes both former Republican and Democrat elected officials and senior staff. This includes former senators, congressmen and a former secretary of transportation

> We have helped our clients secure billions of dollars in funding for critical projects and programs

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Lobbying States and Local Governments

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Presenter

Presentation Notes

Our firm for example, combines the capabilities of our Federal Practice in Washington D.C. with our state and local practices across the country. This integrated team works together to provide clients with seamless representation in any forum – before the U.S. Congress and executive agencies, as well as state and local government entities. Different from many lobbying boutiques because GT is not just a Washington, D.C. firm. Our nationwide network of offices, 29 U.S. offices, including eight offices in state capitals


Other Legal Considerations for Doing Business in the US

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Corporate Structure > Each State has its own laws and tax regime (in some cases, cities

and counties too); e.g., Florida and Texas have no personal income tax, unlike NY, CA, IL

> Also different laws with respect to non-competes, termination of distribution agreements, local taxes, etc.

> Most major law firms are on-line with local Secretary of State: can establish an entity within a day, with articles of incorporation, by-laws, operating agreement, request for tax ID number, as appropriate for entity

> Planning is everything (choice of jurisdiction; choice of location -- taxes, work force, environment, tax abatements or concessions; choice of entity -- C Corp, LLC, LLP, etc.; shareholder agreements, employment agreements, option arrangements; banking relationship; immigration, etc.)

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Self-serving, but true…

> As in Israel, you can acquire credibility and contacts by associating yourself with professionals who have credibility and contacts (e.g., with financial institutions, government agencies, vendors, landlords and sellers of real estate, investment bankers, private equity and VC funds, private investors)

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EB-5 Basics

> Foreign nationals can get a green card if: > Invest $500K or $1MM (depending on geographical area); and

> Investment creates full-time jobs for 10 US workers

> Green cards conditional for two years

> Conditions removed if investment sustained and jobs created

> This streamlined path to US residency for Israelis is also a source of potential capital for Israeli companies in the US

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Minimizing Risk and Avoiding US Litigation > Be proactive: “best defense is a good offense”

– Integrate legal advice into your business units

– Identify and evaluate potential risks of litigation

– Develop and implement risk avoidance programs

> Review and revise your commercial agreements to offset risk – Indemnity and hold harmless provisions

– Releases, waivers and disclaimers

– Insurance provisions

> Require alternative dispute resolution for unavoidable conflicts – Expedited procedures (w/o 3d party involvement) to resolve issues early

– Mandatory arbitration, sometimes preceded by mandatory mediation

> Choose your “weapons” in advance: choice of law and forum


An International Firm of 1750 Attorneys & Government Law & Policy Professionals

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Thank You

If you have any questions, please feel free to contact me:

Meital Stavinsky, Esq.

E-mail: [email protected]

Tel. (US) 305.579.0518

Tel. (Israel) 03.636.6017

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doing business with the us federal governmentevents.eventact.com/ivc/select usa seminar - ivc...

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