Nichols comes from Crowell’s successful government contracting group, one of the most established and well-regarded in the city, and his appointment to co-chairman of Covington’s government contracts group marks one of the rare times the firm has tapped someone from the outside to lead a practice.
Nichols shares the title with longtime Covington partner Alan Pemberton, who’s served as sole chairman of the government contracts group since 2001. In Nichols, Covington has a younger partner (Nichols is 43 and Pemberton is 59) with a strong international practice representing contractors based abroad — an area poised to grow as more countries consider joining a World Trade Organization procurement agreement that would open up the bidding process to foreign-based companies.
“One needs to plan for succession issues,” Pemberton said. “We need to be thinking about the future. One area we want to target is companies that are based abroad and are seeking to enter the U.S. procurement market.”
Procurement budgets grew about 12 percent a year between 2002 and 2008, and started to retract in 2010, according to the Office of Management and Budget. Covington is banking on the idea that as contractors compete more fiercely for contracts and face increasing scrutiny from regulators, their need for lawyers with procurement expertise will grow as well.
“In a tighter environment, you see increased legal activity,” Pemberton said. “Increased competition will drive bid protest work. Greater scrutiny of contractors will drive more disputes under existing contracts and increased white collar and regulatory scrutiny.”
Contractors bring what’s known as protest claims against the government when they want to challenge the award of a contract to another entity. Litigation arising from such claims have been on the rise as companies fight over scare federal dollars.
Covington already represents defense contractors in white-collar investigations, national security, corporate and international trade matters, and having a larger contracting group with more procurement specialists will allow the firm to be more full-service for those existing clients, Pemberton said.
Issues grow in complexity
Nichols said jumping to Covington was a unique opportunity to build something new, since the firm had many of the peripheral practices contractors need, but had yet to focus on government contracting as a core practice.