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Growth Opportunities for International Companies in 2010

Stephen Burke, Williams Mullen, 757.473.5332Stephen Burke, Williams Mullen, 757.473.5332

Robert Korroch, Williams Mullen, 757.249.7105Robert Korroch, Williams Mullen, 757.249.7105

Eliot Norman, Williams Mullen, 804.783.6482Eliot Norman, Williams Mullen, 804.783.6482

William Nusbaum, Williams Mullen, 757.629.0612William Nusbaum, Williams Mullen, 757.629.0612

Jonathan Brabrand, BB&T, 804.782.8898Jonathan Brabrand, BB&T, 804.782.8898

Maria Stefanis, Williams Mullen, 757.629.0664Maria Stefanis, Williams Mullen, 757.629.0664

Stimulus Act Funding of Private and Public Sector Projects

Strategic Use of M&A and Joint Ventures

Government Contracts

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February 2009

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February 2009

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American Recovery and Reinvestment Act of 2009 (ARRA)

• Signed into law by President Obama on Feb. 17, 2009

• Provides a total of $787 billion in funds

• Unprecedented level of funding designed to help create and save jobs, jumpstart the economy, and build the foundation for long-term economic growth

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Result?

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Practical Reaction of Clients?

Varied depending upon industry sector

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Our Agenda

1. Where is the money being spent?

2. Where are the new opportunities?

3. How much has been spent so far?

4. Can foreign companies participate in Stimulus Act projects?

5. Steps for success: legal considerations and practical strategies

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More Detailed Analysis of Those 4 Questions

1. Where are the Stimulus Act opportunities for public sector projects?

2. Stimulus Act incentives: direct funding, tax credits/loan guarantees and grants.

3. “Level Playing Field” for foreign companies?

4. Availability of financing/commercial banking services for business expansion.

5. Strategic use of acquisitions & joint ventures: smart approach in 2010?

6. Government contracts strategies.

7. Top 10 “Take-Away” Points: services required and steps for success.

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Topics #1 and #2: U.S. Stimulus Act

1. Follow the money: Where is it being spent?

2. What are the new opportunities?

3. How much has been spent so far?

4. How much remains to be allocated?

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Follow the Money: U.S. Stimulus Act Allocations?

• “Shovel-ready jobs?”

• Roads and Bridges?

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ARRA: Spending Provisions

• Funds designated to the following sectors:

– Energy and Environment: $98 billion

– Transportation: Rail, roads and bridges: $49 billion Only 50% of Energy/EnvironmentOnly 50% of Energy/Environment.

– Defense and Security: $16.448 billion

– Agriculture and Rural Development: $15.986 billion

– Biomedical research $10 billion

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3rd GenerationPhotovoltaic Cells

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How Much Has Been Spent?

• Small percentage spent to date at federal, state or local levels

• Examples: Dept. of Energy: 5.1% of $35.1 billion; Commerce:17.7% of $2.9 billion; Transportation Dept.: 17.7% of $44.8 billion; EPA (Environmental) 10.8% of $6.8 billion.

• Much federal spending to date has been in grants to states and cities who have yet to fund projects.

• Over $206.5 billion has yet to be allocated for future spending.

• This creates "sales opportunity.“ Governments are inviting proposals for projects.

• Conclusion: it is not too late, it's still early in the game, even one year after passage of the legislation.

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How Much Has Been Spent?Additional Considerations

• New and expanded federal tax incentives and revolving loan programs will continue to drive sustainability and related efficiency projects.

• January 13, 2010 CEA Report confirms this analysis

• Green Building initiatives: not off the ground (WSJ Article)

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Public and Private Sector Opportunities

• Public Projects

Federal

State

Local

• Private Projects

• P3 (Public-Private Partnerships)

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Where is the Money Going?What are the Opportunities

For International Companies? • Going to many sectors where foreign companies are already

market or technology leaders

• Urban transit and rail transportation

• Water quality and wastewater treatment plants

• Environmental, natural resources,

• Energy efficiency and renewable energy (wind, solar)

• Medical research, biomedical research, medical technologies particularly health care IT ($19 billion)

• Building out the broadband infrastructure ($5 billion)

• Green investments and green buildings ($46 billion)

• List is enormous and diverse, affecting nearly all sectors—from airport body scanners to vaccines

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ARRA: Energy & Environmental

• $5 billion for the Weatherization Assistance Program• $3.1 billion for the State Energy Program• $2.73 billion for Energy Efficiency and Conservation Block Grants• $2.0 billion for Advanced Battery Manufacturing Grants • $800 million for the Biomass Program • $454 million for Retrofit ramp-ups in energy efficiency • $400 million for the Geothermal Technologies Program • $400 million for Transportation Electrification • $346 million for Energy efficient building technologies • $256 million for the Industrial Technologies Program • $93 million for Wind energy projects • $50 million for Information and Communications technology • $41.9 million for Fuel Cell Markets

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Green Building

• Over $46.05 billion in funding for energy-efficiency retrofits and renewable energy projects

• $100 million for US Navy and Marine Corps facilities for energy conservation and alternative energy projects

• Expansion of homeowner tax credit program:

– Energy-efficiency improvement tax credit increase from 10% to 30% of the costs of the improvements up to $1500 per year in 2009 and 2010

– $2.3 billion in new clean energy manufacturing tax credits

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ARRA: Health Care

• $19 billion for Medicare and Medicaid to ensure widespread adoption and use of interoperable health information technology (IT)

• $24.7 billion to subsidize COBRA health insurance premiums (at 65% level for 9 months) for workers who have lost their jobs

• $10 billion to the National Institute of Health to conduct biomedical research

• $1.1 billion for comparative effectiveness research to evaluate the relative effectiveness of different health care services and treatment options

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ARRA: Health Care (cont.)

• $2 billion for Health Information Technology (HIT) grants, training, infrastructure, dissemination of best practices, telemedicine, and clinical education

• $50 million for pandemic flu/BARDA

• $1 billion for prevention and wellness programs to fight preventable diseases and conditions

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Telecommunications/Broadband

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ARRA: Technology and Communications

• $2.5 billion for the Department of Agriculture for distance learning, telemedicine, and programs that increase broadband access and usage

• $4.7 billion for the National Telecommunications and Information Administration Broadband Broadband Technology Opportunities Program for competitive grants to accelerate broadband deployment in unserved and underserved areas, with at least $200 million for competitive grants for expanding public computer center capacity and at least $250 million for competitive grants for innovative programs for sustainable broadband adoption

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Public Sector: Examples of Stimulus Act Projects

• New Green Building Coast Guard HQ, Washington D.C. $493 million

• Add Solar Roof on Federal Courthouse, Richmond, VA $1-5 million

• IT consulting, Social Security Administration $95 million

• Disposal of Nuclear Waste, Los Alamos National Laboratory, $10 million

• Architectural/Engineering Services, Waste Water Treatment Facilities $5 million

• Smart Grid Power Distribution System, Philadelphia

• Steam Lines, Electrical Systems, $387 million, Dept. of Energy

• Geospatial Products and Services, Dept. of Interior, Denver, Colorado, $250 million

• Biomedical Research $5 billion in grants announced 09/30/09

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Private Sector: Examples of Stimulus Act Projects

1. Alstom (American Electric Power Co.), Clean coal technologies in West Virginia, $334 million

2. Iberdrola, Five wind farms (Texas, Oregon, Pennsylvania, Minnesota), $294 million

3. Saft, Factory to manufacture lithium ion cells and batteries, Jacksonville, FL, $95.5 million

4. Johnson Controls – Saft, Batteries for hybrid vehicles, Holland MI and Lebanon, OR, $299.2 million

5. ArcelorMittal, Blast furnace gas flare capture, East Chicago, IN, $31.6 million

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Clean Energy

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The New (Green) Deal:Clean Energy and the

Stimulus Bill

• “The country that harnesses the power of clean, renewable energy will lead the 21st century.”

- U.S. President Barack Obama, February 24, 2009

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ARRA Clean Energy Strategy

• Spur innovative technology

• Reduce greenhouse gases

• Re-establish U.S. manufacturing capability focused on energy

• Reconstitute aging power and water infrastructure

• International companies should be able to lead the way because of technological advances overseas

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The old energy project

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The new energy project

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ARRA Clean Energy: Level of Funding

• Direct appropriations for energy-related projects and technologies equal to approximately ($72 billion)

• Tax credits and other financial incentives for projects and energy equipment ($22 billion +)

• The U.S. Treasury direct grant program equal to potentially 30% of total qualifying energy property investment

• Expansion and “rapid deployment” of DOE loan guarantee program ($6 billion appropriation; $60 billion in loans)

• Expansion and establishment of new bond mechanisms ($4 billion for energy projects)

• Massive funding for state and local energy programs

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ARRA Energy-Related Focus

• Energy efficiency

• Green buildings

• Renewable energy projects

• “Smart Grid” technology & infrastructure, including $11 billion for electrical grid projects

• Clean coal deployment $3.4 billion for Fossil Energy R&D

• Advanced biofuels and green vehicles

• Cleantech

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Examples of Clean Energy Financial Incentives

• Direct Investment

• Investment Tax Credit (“ITC”)

• Production Tax Credit (“PTC”)

• Federal Block Grants

• Advanced Energy Project Credits

• Clean Renewable Energy Bonds

• Qualified Energy Conservation Bonds

• Potential Carbon “Cap and Trade”, Carbon Management benefits

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Funding State and Local Programs

Not all the money is at the federal level

• Weatherization Financial Assistance Program ($5 billion)

• Green Building ($4.5 billion)

• Energy Efficiency and Conservation Block Grant Program ($3.2 billion)

• State Energy Funding Program (discretionary funding for “shovel ready” energy and water projects)

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Advanced Energy Project Credits

• ARRA expands 30% Investment Tax Credit for any Qualifying Advanced Energy Project that re-establishes, expands or constructs a manufacturing facility to produce the following equipment:

• Renewable energy systems (including solar, wind and geothermal)

• Fuel Cells

• Microturbines

• Electric/Hybrid Cars, Batteries & Equipment

• Renewable Grids/Smart Grids

• Carbon Capture & Sequestration

• Renewable Fuels Refining or Blending

• Energy Conservation Technologies

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Stimulus Act Case Study – Wind Energy

Iberdrola Renovables (Spain) • World’s largest wind energy firm• 2nd largest wind energy producer in U.S.• Headquartered in Valencia, Spain• Has formed U.S. subsidiary to import components and

exploit its technology• Expects to receive $400 to $500 million in ARRA

(Stimulus Act) grants for U.S. projects before the end of the year

• Has remained profitable despite downturn and falling fossil fuel prices

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2008 Foreign Owners of U.S.Wind Energy Farms

Stimulus Act has Accelerated Trend to Foreign Ownership

• NextEra Energy Resources 6290.1

• Iberdrola Renewables 2063.4 (Spain)

• MidAmerican Energy 1939.5

• Horizon-EDP Renewables 1872.7 (Portugal)

• Invenergy 1276.5

• Babcock & Brown 1118.8

• Edison Mission Group 959.9

• AES 956.7

• E.On Climate and Renewables 726.9 (Germany)

• John Deere Wind 527.3

• enXco 527.0 (affiliate of EDF Energies Nouvelles, a French Company)

• Shell Wind Energy 449.0

• Puget Sound Energy 385.2

• Terra-Gen Power 368.5

• Duke Energy 321.5

• AEP 310.5

• Eurus 296.6 (Japan)

• Noble Environmental Power 282.0

• Orion Energy Group 280.5

• Enel North America 249.3 (Italy)

• Others 4167.1

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Other Inbound Investment Considerations:

Tax and Treaty Eligibility

Corporate vs. LLC form: Corporations do not have "flow through" tax treatment and hence are required to file tax returns. Limited liability companies, on the other hand, have "flow-through" tax treatment and are not required to file income tax returns; rather their parent companies must file income tax returns in the United States. Since most foreign companies do not want to file tax returns in the United States, the preferred form of entity for U.S. operations of foreign companies most often is the corporation.

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Taxes

• Worldwide Income Taxation (subject to foreign tax credit regime)

– Income Tax. The revenue generated by the U.S. subsidiary or U.S. operations of a foreign business will be subject to taxation in the U.S. This tax is assessed at the federal and state levels.

– Federal Tax. Federal income tax rates are set depending upon many factors. Federal corporate tax rates range between 15% and 39%; the average tax rate is typically 35%.

– State Tax. State income tax rates are set forth on a state by state basis. The current rate for corporate income tax in North Carolina is 6.9%. This is lower than many other states, including California (8.84%) and New York (7.5%-9%).

• Accounting considerations (FIN 48; permanent establishment, etc.)

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International Tax Planning

Permanent establishment: initial assessment of taxable presence;

• Transfer pricing:

– Where to direct profit:

• Profit Drivers:

– Capital;

– Function;

– Know how (and other intangibles);

– Risk

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International Tax Planning

• Financing: debt-to-equity considerations (including section 163(j) restrictions);

• Treasury Management – repatriation planning

– Where a treaty is absent

• LOB provisions and treaty “shopping”

• Holding company planning techniques

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Topic # 3Level Playing Field forForeign Companies?

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The Level Playing Field

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Can Foreign Companies Participate in ARRA Projects?

• Common Perception: Given the purpose of ARRA, and its Buy American Provisions, Stimulus Projects must be reserved for U.S. companies and U.S. manufactured products

• ARRA states: Any ”project for …public building or public work” can use Stimulus funds only if all the iron, steel and manufactured goods are produced in the United States.” Buy American?

• But ARRA also says that : “This section shall be applied in a manner consistent with U.S. obligations under international agreements:” WTO obligations apply.

• Reality: Significant exceptions to Buy American Provisions exist and can benefit foreign companies:

• Buy American Act Provisions not a major issue• Proof: Look no further than Iberdrola Renovables or SAFT/Johnson

Controls

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“Buy American” provisions affecting Stimulus Act public construction projects do not prevent foreign company from being contractor or supplier when:

• Application of “Buy American” provisions would contradict U.S. obligations under international agreements.

• The United States and the company’s foreign country are signatories to the WTO-GPA.

• The WTO-GPA prohibits application of the BUY AMERICAN ACT to Stimulus Act procurements by federal agencies and 37 state or other government authorities.

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Who Has Signed the WTO-GPA?• Parties and Date of entry into Force/Accession:

• Canada 1 January 1996

• European Communities with regard to its 27 member States: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom1 January 1996Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic and Slovenia 1 May 2004 Bulgaria and Romania 1 January 2007

• Hong Kong , China 19 June 1997 Iceland 28 April 2001 Israel 1 January 1996 Japan 1 January 1996 Korea 1 January 1997 Liechtenstein18 September 1997 the Netherlands with respect to Aruba25 October 1996

• Norway 1 January 1996 Singapore20 October 1997 Switzerland1 January 1996 Chinese Taipei 15 July 2009

• United States 1 January 1996

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Example 1: U.S. Department of Transportation (but not Federal Aviation Administration) solicits bids for Stimulus Act project.

• Result: A Foreign WTO-GPA company is eligible to bid, because Annex 1 to GPA lists U.S. Department of Transportation (but not Federal Aviation Administration) among covered central government entities.

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Example 2: Pennsylvania Department of Transportation (but not South Carolina Department of Transportation) solicits bids for project.

• Result: A foreign WTO-GPA company is eligible to bid, because Annex 2 to GPA lists Pennsylvania Department of Transportation (but not South Carolina Department of Transportation) among covered sub-central government entities.

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WTO GPA STATES

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Example 3: Port of Baltimore (but not City of Charleston) solicits bids for project.

• Result: A foreign WTO-GPA company is eligible to bid, because Annex 3 to GPA lists Port of Baltimore (but not City of Charleston) among other covered entities.

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Additional Loopholes• Buy American” provisions affecting

stimulus-package public construction projects do not prevent a foreign company from being contractor when:– Company can obtain WAIVERS of Buy

American Provisions in Stimulus Act

– U.S. companies do not produce goods “in sufficient and reasonably available quantities” and of “satisfactory quality”; or

– Application would contradict “the public interest.”; or

– Application would increase project’s overall cost by more than 25%.

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Remember: “International agreements” do not provide only exception to “Buy American” requirements

• Between 7 April 2008 and 17 September 2009, 18 Federal Register notices from U.S. government entities including Environmental Protection Agency, Department of Commerce and Department of Agriculture have granted: – 13 “unavailability” waivers; and – 5 “public interest” waivers.

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Stimulus Act: Lets Assume That “Buy American” Provisions Apply

A foreign company can still participate in the procurement under the Stimulus Act if:

• There has been a “substantial transformation” of its products in the United States into a new or different “manufactured good distinct from the materials from it was transformed.”

• NOTE: “There is no requirement with regard to the origin of components or subcomponents in manufactured goods or products, as long as the manufacture of the goods occurs in the United States.”

• There are also “De minimis” exceptions: 5% of value for incidental products (EPA) = Blanket Waivers

• Summary: Each case has to be evaluated individually in terms of the products involved, the identity of the procuring agency, whether the Buy American Act provisions apply, and whether exceptions or waivers to the Buy American Act provisions exist

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Inflatable Patrol Boat from GSA Schedule

• 27' Extreme Patrol/SAR Aluminum-Hull Rigid Inflatable Boat (A-RIB) with a 42oz polyurethane collar or Foam Hybrid Collar. Set-up for inboard(s) or outboard(s) machinery package. Select center console or full cabin configuration. See option Manufacturer: NORTHWIND MARINE INC.Contractor: NORTHWIND MARINE, INC. [GS-07F-0416N] (s) $113,622.00 EA 120 days delivered ARO

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German Turbo-Generators for Waste-to-Energy Power Plants

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Summary Topics 1-3

• Broad range of opportunities under Stimulus Act

• Special incentives for Renewable Energy and GreenTech Projects (large and small, R&D and manufacturing)

• Money not yet spent

• Level Playing Field

• So you want to play?

• Question Remains: What are the Steps for Successful Participation?

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A Break?

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Topic # 4Strategic Use of Acquisitions

and Joint Ventures

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M&A Considerations

1. Why Buy? Why Now?

2. Defining Your Acquisition Strategy

3. Valuation Issues

4. Due Diligence, Negotiations and Closing the Deal

5. Financing the M&A Deal

6. Cross-Cultural Issues

7. Post-Acquisition Operations/Risk Management

8. The Joint Venture Alternative

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M&A Considerations

1. Why Buy? Why Now?

– Stimulus Act spending in 2010-2011.

– Economic rebound expected in 2010.

– Euro strong versus US Dollar; Availability of middle market acquisition opportunities; flexibility of deal terms.

– Benefits of acquisitions or joint ventures. Case studies and examples.

– M&A activity, beginning to rebound from 2009.

– Favorable legal/regulatory considerations: antitrust; unions; immigration policies; attitudes of US administration and Congress.

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M&A Considerations

2. Defining Your Acquisition Strategy

– Your internal business strategy review process

– Understanding and applying your business goals

– Defining acquisition parameters

– Selecting your M&A advisors and legal team

– Financing: how best to present the deal to your investors

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M&A Considerations 3. Acquisition Process and Valuation:

– Identifying your target companies

– Approaching targets

– Valuation techniques and approaches

– Tax Issues

– Stimulus Act impact on valuations

– Special considerations for U.S. targets: environmental issues, employment policies, non-competes and confidentiality agreements, goodwill/intangible assets. Is seller publicly traded corporation?

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Investment bankers contact the potential buyers and/or investors– All parties execute a Confidentiality Agreement

prior to receiving a CIM

Potential buyers submit initial indications of interest (“IOI”)

Qualifying buyers visit the Company's headquarters for management presentations and are given access to an electronic data site to begin diligence

Investment bankers respond to follow-up due diligence requests from interested potential buyers

Potential buyers submit Letters of Intent (“LOIs”), often including a mark-up of the Purchase & Sale Agreement

Marketing the Company(10-12 weeks)

Internal Preparation(6-8 weeks)

Investment bankers conduct due diligence

Investment bankers work with the Company to complete the Confidential Information Memorandum (“CIM”)

Investment bankers work with the Company to complete the list of potential buyers

CIM and buyers list reviewed and approved by the Company

Closing the Transaction(8-10 weeks)

Buyer chosen

Buyer conducts confirmatory due diligence

Purchase & Sale Agreement is negotiated, finalized, and executed

Closing

Post-closing true-ups

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S

1 2 3 4 5 6 1 2 3 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 1 27 8 9 10 11 12 13 4 5 6 7 8 9 10 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 914 15 16 17 18 19 20 11 12 13 14 15 16 17 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 1621 22 23 24 25 26 27 18 19 20 21 22 23 24 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 2328 29 30 31 25 26 27 28 25 26 27 28 29 30 31 29 30 27 28 29 30 31 24 25 26 27 28 29 30

Traditional Sell-Side M&A Process

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M&A Considerations 4. Due Diligence, Negotiations and Closing the Deal

– U.S. negotiation tactics

– Due diligence checklists

– Legal and fiscal issues: Stock versus asset purchase; LLC or C corporation; tax considerations under U.S. and foreign law

– Stimulus Act tax incentives

– Financing issues at closing

– Special issues: buying divisions/subsidiaries of U.S. publicly held companies

– How to protect against post-transaction risks

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M&A Considerations 5. Financing the M&A Transaction:

– Private equity, mezzanine, and venture capital; seller and bank financing.

– International tax issues. – Sources of capital overseas and in the United States.

6. Bridging the Gap between Foreign and U.S. Corporate Cultures

Cross-cultural issues and questions :– The importance of communication and leadership. Who manages

and controls?– Which culture(s) predominant? – How culture clashes can undo the merger– Human resources: why human capital may be your most important

asset– Case examples

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M&A Considerations

7. Successful Post-Acquisition Operations

– Employment and immigration

– Intellectual property

– Marketing to customers

– Legal and tax considerations: minimizing risks

– Contracts and licensing

– Other operational considerations

– Supply chain logistics

– Status as government contractor or subcontractor

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Joint Ventures: Alternate Strategy?

• Often an excellent alternative to the M&A deal

• Factors for success

• When and why does it not work?

• How to structure: tax, legal issues

• Use in Government Contracting?

• Use in private sector projects

• Case examples

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Topic # 5How to Best Position Your

Foreign company for Government Contracts

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Government Contracting

• Standard Competitive Bidding model may not always apply to government contracts or subcontracts

• Alternatives:

– Sole Sourcing

– IDIQ

– GSA Schedule

– Negotiated Procurements

– Teaming arrangements with a general contractor

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Government Contracting: What can I do?

• Position your foreign company to avoid Requests for Proposals and competitive bids, where possible (federal projects)

– Use IDIQs

– Become a “GSA Schedule Contractor”

– Propose projects; can sell to contracting officer

• Be best positioned and pre-qualified

• Be ready to negotiate, responsible (financially & technically)

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Government Contracting:Goal in Speaking to

Contract Officer• Sole Source Opportunities

– Most contracts <$750k can be awarded without formal competition

– Most contracts $750k-$1.5M can be awarded with limited competition

– Contracts >$1.5M will be awarded after competitive bidding in most cases. Thus, this is an area where Teaming Agreement with U.S. contractor may make sense.

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Government Contracting:Unsolicited Proposal

• Provides a vehicle to propose solutions to the government’s requirements

• Mechanism to obtain work/define needs

• Mechanism to “shape” procurements

• Stimulus Act: government is looking for projects to justify spending the money

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Government Contracting:Use of I.D.I.Q.

• Indefinite Delivery, Indefinite Quantity contract (I.D.I.Q.)

– Multiple Award Contract

– Dollars are used to fund Task Orders

– Task Orders may or may not be open to competition

– Award of Task Orders may be protested by competitors

– Position your company for IDIQ contracts and protect the procurement from protests

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Government Contracting:GSA Schedule Contracts

• Catalogue for the government to go shopping, like Amazon.com or ebay.com

• Eliminates competitive bidding

• As part of feasibility audit or evaluation, determine whether your company can qualify on the GSA schedule and how you can best sell to the government, just like any other commercial customer

• Advice re Teaming Arrangements

• Example: Inflatable Patrol Boat

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Inflatable Boat from GSA Schedule

• 27' Extreme Patrol/SAR Aluminum-Hull Rigid Inflatable Boat (A-RIB) with a 42oz polyurethane collar or Foam Hybrid Collar. Set-up for inboard(s) or outboard(s) machinery package. Select center console or full cabin configuration. See option ...Manufacturer: NORTHWIND MARINE INC.Contractor: NORTHWIND MARINE, INC. [GS-07F-0416N] (s) $113,622.00 EA 120 days delivered ARO

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Government Contracts Issues for Foreign Companies

• Provide a basic guide in these areas:

– Federal procurement laws

– Federal acquisition regulations

– International contracting

– Immigration, labor and employment laws

• New E-Verify requirements to check identity/work authorization of all new hires and all workers assigned to the contract

– Operation of U.S. Subsidiary as government contractor or subcontractor

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Government Contracts: Areas of Concern

• Government recordkeeping requirements

• Auditing by the government

• Ethics and Compliance mandate, 2009

• Prevailing wage/CBA requirements

• Only deal with authorized agents of the U.S. government

• Increased civil and criminal penalties

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Government Contracts: Areas of Concern (cont.)

• Unique contracting issues:

– The Disputes Clause

– Change orders in writing

– Spend no more than the money you have been specifically allocated

– Termination clauses

– Prompt payment

• Be careful of any Socio-Economic Program Requirements, affirmative action for minority workers

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Federal Procurement Laws:Final Areas of Concern

• Government contracts are highly regulated

• Laws applicable to government contracts are heavily enforced against both companies and individuals, alike

• Violations could result in:

– Criminal proceedings resulting in substantial fines, restitution and even prison

– Civil fraud proceedings

– Suspension or disbarment

– Termination for default

– Contractual remedies

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Topic #6 Stimulus Act and Other Opportunities for Business

Expansion

• Steps for successful participation and the

• Panel’s “Top 10” Take-Away Points

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Steps for Success: Stimulus Act Public Sector Projects

1. Feasibility Audit to best position your company

2. Identification of best opportunities under ARRA

3. Teaming Arrangements, JV or Strategic Acquisitions to maximize your access to Stimulus Act Projects

4. Legal guidance concerning application of WTO-GPA • Supply chain planning to avoid Buy American Act issues; or

• Representation of foreign companies in obtaining waivers of Buy American Act Provisions

5. Obtain advice after contract awards on compliance with government contract laws and regulations

6. Select advisory team to help your company finance, prepare for and close the deal if you are doing M&A, JV.

7. Consider support services for future business operations: financial, tax and accounting, legal, strategic.

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Steps for Success: Stimulus Act Private Sector Projects

1. Feasibility Audit to assess your company’s technologies and match opportunities under Stimulus Act

2. Advice on available tax credits, guaranteed loans, grants and other financial incentives. If project is in the clean energy sector, consider potential impact of Carbon management, financing and “cap and trade”

3. Decide on use of Teaming Arrangements, JV or Strategic Acquisitions

4. Obtain advice on application of any Buy American Provisions tied to Stimulus Act incentives

5. Formulate business growth strategy

6. Select advisory team to help your company finance, prepare for and close the deal if you are doing M&A, JV.

7. Consider support services for future business operations: financial; tax and accounting; legal; strategic.

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The Panel’s Top 10 Take-Away Points

• Stimulus Act

• Level Playing Field: rules of the game

• Teaming Arrangements and teaming partners

• Joint ventures

• M&A

• Private sector financial incentives

• Financing deals or internal business growth

• Tax considerations

• Government contracts

• The “Greening” of America?

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Support Services to Ensure Soft Landing for Foreign Companies

• Company formation:

– International tax

– Help with choices: LLC or C Corporation

• Cross-Border Transactions:

– Immigration: using L-1 Corporate transfers and

E-2 Treaty Investor/Trade Visas to your advantage

– Customs issues

– Supply chain legal logistics

• Intellectual property

• Other international tax advice

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Support Services

• Compliance and Risk Management

– Employment policies,

– Products Liability — reducing risks

– Leverage legal advantages of

Virginia location

– Government contracts

• Distribution and Licensing Agreements

– How to enhance market penetration

– Ensure long term growth

• Advice on Strategic M&A and Joint Ventures

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Questions?A special thanks to our co-sponsors

Williams Mullen, 804.783.6482 804.782.8898