Category Archives: Business

MOST SIGNS STILL POINT TO APPROPRIATIONS, BUT STIMULUS FUTURE UNCLEAR

Despite predictions that the government will see a Continuing Resolution into the 2021 calendar year from former Rep. Tom Davis this week, odds are still in favor of an omnibus appropriations measure being passed by Christmas.  While the President has been silent on this, and many other matters, both House and Senate leadership are committed to having a final FY’21 appropriations measure passed and have stated that they do not want a long-term CR.  Bloomberg Government reported November 19th that White House Chief of Staff Mark Meadows indicated that the White House “wants a bill”.  That’s good news for contractors and their government customers. A deal on a stimulus package appears more uncertain, however, as the President is backing away from pre-election statements indicating that such a measure would be a post-election priority.  The administration appears to be looking to Congress to create a final package, whereas they had previously been an active part of the negotiations.  This is a mixed bag for contractors.  On one hand, there is little in the way of direct spending in a stimulus bill that would be potentially actionable for such companies.  On the other, smaller businesses that had previously taken out payroll protection loans are awaiting information on potential loan forgiveness or favorable pay-back terms that are reported to be in the stimulus measure.  Whatever happens, expect action to come at the last minute.  The most likely scenario on the appropriations front is for there to be a short-term CR to keep the government open after December 11th while an omnibus package is finalized.  Passage could come less than a week before Christmas.  Stay tuned.

IS RUSH TO INNOVATE HARMING COMMUNICATION BETWEEN GSA AND INDUSTRY?

There is always a risk of driving for innovation merely for the sake of having something “new” to show.  “New”, of course, isn’t always “better”.  Here is a timely reminder to GSA and its industry partners on three things that everyone in favor of efficient acquisition needs to keep in mind while noting that the definition of “progress” can mean different things to different people.  1. The Multiple Award Schedule program is a commercial item program that has stood the test of time.  The first time this writer heard the (now very old) saw that Schedule prices are “too high” George H.W. Bush was in the White House and computer screens were monochromatic.  That claim may be new to some at GSA, but it’s worth remembering that the Schedules continue to be the largest single commercial item acquisition method for a reason.  Similarly, “the Schedules can’t do that” is a phrase traditionally used by people watching customers use the Schedules for whatever it is the speaker is claiming they can’t be used for.  Lastly, the Schedules program is a commercial item program.  Unless a contractor has absolutely zero commercial business, they should resist any CO attempt to obtain cost-type information.  2.  Transparency is better than opacity:  Playing your cards close to the vest during a poker game is a good strategy.  Doing it with business partners who you rely upon to serve your common customer is not.  Last week, we chastised industry for not responding when GSA seeks input.  This week, it’s GSA’s turn.  A major opportunity to be straight was missed with key service partners this week, something that did not go unnoticed. There’s time to rectify this before misinformation and conjecture muddy waters that don’t need to be.   3.  This is a good time to stick together.  Outside forces are aligning to cause trouble for anyone in favor of common-sense procurement.  Whether it’s a slew of new rules on secure supply chain, domestic sourcing, cyber, or even issues that have nothing to do directly with contract performance, the fact is that it could be a lot harder to conduct government business this time next year.  It’s important to remember that most elected officials have little background in government acquisition and that, when they do wade into this pool, it is usually with emotionally-driven policy that creates more problems than it solves.  This is all the more reason why people who are committed to efficient acquisition and serving government customers should be looking for ways to work together.  There will be enough people working against it, intentionally or otherwise.

MORE AGENCY LEADERS TELL CONGRESS THAT TELEWORK IS THEIR NEW NORM

Leaders from the Departments of Labor, Transportation, and the Social Security Administration told a Senate committee last week that they see remote working as their new norm, regardless of whether the COVID-19 pandemic subsides.  The list of agencies moving to greater use of telework keeps growing.  Even on the DOD side of government, the Air Force has stated that telework will be the preferred working method of choice for jobs that can be performed remotely.  Remote work is here to stay for feds. That fact has serious implications for contractors.  It will impact not just how you sell, but potentially what.  While remote federal workers will need secure connections, for example, they may not need as many new office chairs.  Don’t forget, either, that not all federal workers will be remote.  Some customers may see little change in operations.  Ultimately, this means that contractors are looking at doing business with a hybrid federal workforce that can best be viewed as a Zen diagram.  Each set of workers will have unique needs, while some will be common to each.  The new reality will mandate the creation of new business strategies for many contractors.  The “how” to sell is obvious and is likely underway at most companies.  The “what” to sell is a question that obviously goes beyond the tactical and could have implications well beyond a firm’s federal business.  Change is here. Adapting to it is essential whether or not we remain masked and socially distant.

FUTURE SAYS: EXPECT GRIDLOCK ON FUTURE LEGISLATIVE CHANGES SHAPING FEDERAL MARKET

While the outcome of last week’s election is still uncertain as we write this, it appears that Vice President Biden will prevail in his race against President Trump.  In the meantime, however, Republicans will likely retain control of the Senate and actually picked up seats in the House of Representatives.  This creates razor-thin majorities for one party in the House and the other in the Senate starting in January. Any president would have a difficult time pressing his agenda through such a Congress.  The outcome of the election should not impact either the FY’21 Defense Authorization Act or an omnibus appropriations bill, both of which are expected to pass this calendar year (see article below).  Future legislation, however, will be managed by several new committee chairs, some with very partisan views.  New members, too, especially in the Senate, will contribute to the creation of new measures that will likely include increased requirements for domestic sourcing and new penalties for non-compliance.  Traditional issues, such as small business and veteran’s business promotion, may also see attention.  The good news for contractors is that the tightness of majorities in Congress makes it unlikely that revolutionary changes will be implemented – unless some outside news bomb makes it imperative.  The bad news is that some needed reforms may also be more difficult to push through.  As with most things, the impact of the election on government business will likely be more evolutionary than revolutionary.

PROSPECTS FOR LAME-DUCK APPROPRIATIONS & STIMULUS MEASURES IMPROVE

The likelihood that the Senate will remain in Republican hands increases the chances that this year’s lame-duck Congressional session may result in an omnibus FY’21 appropriations package, as well as a new round of COVID-19 related stimulus money.  Bloomberg Government reports that lawmakers may be in more of a “get it done” mode since sweeping changes were not made to the Congressional landscape during the election.  The White House and Congressional leaders have both publicly stated that they hope to forge a consensus on a nearly $2 trillion stimulus measure.  It is unclear how much of that money would be available for increased government acquisitions, but it is certainly possible that a portion would go toward logistics and healthcare issues and possibly technology-related spending.  On the appropriations side, a final measure could be agreed upon prior to the Christmas recess.  The House has already completed work on all of its spending measures and, while little related legislation has passed the Senate, most committees have more than general frameworks about the spending they would like to see.  This could be good news for contractors and their federal customers.  Individual agency spending accounts may be set by the end of January should an appropriations measure pass by the end of the calendar year.  Nothing is certain, so companies definitely want to watch further developments.  Overall, though, chances for progress this year appear better now than they did a few weeks ago.