The Week Ahead - January 13th, 2014

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DON’T LOOK NOW, BUT FEDS RUN OUT OF MONEY WEDNESDAY

The funding measure keeping the government open expires January 15th and Congress must act before then to avoid a shut down. While it currently looks like Congress is coming together to pass an omnibus appropriations measure for the remainder of the 2014 Fiscal Year, there may be too much work and too little time for a deal to be totally done by the deadline. As such, contractors may see the government enact at least one short term Continuing Resolution to keep things going until a larger measure is ready. No one expects a shut down, but short-term CR’s can be frustrating for agencies and their contractors working on longer term, or new, projects. Good news in this arena is relative as well. While the prospect of a second round of sequestration cuts is off the table and there will be some additional dollars available, overall budgets will still be tight compared to just a few years ago. Once an appropriations measure is passed, bet on about a month before your individual customer will know exactly what it has to spend between now and September 30th.

 

GSA EXODUS CREATES GAPS, QUESTIONS

Multiple executives, including the Deputy Administrator and Chief Information Officer, have announced their departure from the General Services Administration since the start of 2014. While some of the departures are due to consolidation within the headquarters operation, it is never easy to replace the years of institutional knowledge that just walked out the door. In addition, some of the people to leave were known as the best and brightest in their fields. This raises questions about whether the agency will be able to retain remaining good performers or attract new ones from outside. The drive to reduce internal costs and the prices GSA charges customers on a host of its own contracts further seems to intersect and paint a picture of an agency that will try to operate on a shoestring and brand itself as the “Dollar Store” alternative. Contractors need to assess their GSA positions in light of these changes and consider adjustments to their federal strategies to ensure that they can work with customers efficiently and at a fair price, regardless of the channel chosen.

 

THINK YOUR OTHER BUSINESS UNIT CAN’T GET YOU IN TROUBLE? THINK AGAIN

Federal agencies have broad authority to suspend companies that they deem unfit for government work. Sometimes, however, this even extends to affiliates or other business divisions of related companies that have not actually done anything wrong themselves. The 11th Circuit Court of Appeals ruled on just such a case at the very end of 2013. They said that the government’s action to suspend two affiliates of a company currently suspended itself and the target of both civil and criminal cases was reasonable. Despite appeals of these affiliates, at least one of which actually had a positive federal business record, they remain on the suspended list with their troubled partner company, potentially for several years until that company finally resolves its legal matters. This is a cautionary tale that every government contractor should take seriously. Your federal business can be jeopardized by actions taken by your business partners. If you’re business is one division of a larger contractor, you need to make sure that someone at the top who sees across all business lines understands this. Communication and coordination are, as always, critical. If you’re consistently teaming or doing business with one company, be aware of what the affiliation rules say. Choose such partners very wisely and make sure you know they share your compliance values.

 

DON’T LET GOVERNMENT INVESTIGATORS CALL YOU “TATER SALAD”

If your contract compliance program isn’t up to date, the government could make tater salad – or worse – of your company’s contract profits. Making sure that you, A. have a compliance program and, B. that it is up to date, really are the very best preventative medicines you can buy. While “pre-existing conditions” are o.k. with Obamacare, that’s not so with contract problems. Call Allen Federal. We have extensive experience in working with companies to ensure they can comply, and sell, through their Schedule contracts. Contact Allen Federal today at info@allenfederal.com to see how we can make your New Year safe and happy!