Apparently the specter of planes falling from the
skies was enough to convince the White House and Congressional leaders to forge
an agreement to re-open agencies that had been shuttered for 36 days. The President has signed a Continuing
Resolution passed by Congress that will re-open agencies such as DHS,
Transportation, State, Agriculture and others that had been shuttered through
February 15th. As a
practical matter, however, it is highly unlikely that another shutdown
is in the works after that time given the substantial impact on the
people and programs essential to issues like national security and
transportation safety. A CR will allow
agencies to continue doing what they had been doing in FY’18, at approximately
the same dollar levels. It will also
allow past-due invoices to be paid.
About the only thing that a CR will not allow is the start of new
projects that need CR money to fund them. That still requires an official FY’19
Keep in mind, though, that new projects are being worked on,
and never really stopped, in DOD, HHS, the VA and other agencies that account
for 70% of discretionary spending. Business
was being conducted during the shut-down.
DISA moved forward on its planned massive DEOS cloud buy, GSA edged
closer to issuing ATO’s to EIS contractors, and HHS continued to make
innovative use of technology in acquisition.
There is definitely business to be had in these agencies and
contractors would be wise to focus on the dollars that are definitely
for appropriations for agencies operating under a CR are unclear at this time,
but may become clearer as the next three weeks unfold. Stay tuned.
One piece of good news coming from the end of the partial government
shutdown is that contractors may be able to recover certain costs incurred that are
associated with the closure.Several
regulatory clauses, such as the FAR’s Suspension of Work, allow
for contractors to be compensated.
Companies will have to move quickly once the agency that owes them
money re-opens, though, as most of the clauses offer a short timeframe
in which incurred costs can be covered.
Another best practice is for contractors to set up specialized charge codes
for closure-incurred costs. That
way, it is clearly visible to both the contractor and its client that specific
costs were associated with the shutdown, separate and apart from costs incurred
in the course of normal business operations.
Contractors may even be able to collect interest on overdue payments as
well. Guidelines issued by the
previous White House during the 2013 shutdown provided for interest to be paid
under certain conditions. This has been
pointed to by some in government now as a precedent that could allow for
payment this time. It is essential for contractors
to check their specific contracts to ensure that the proper clauses are
included, whether for cost plus or time and material work. Also, be prepared to move quickly so
that you don’t lose any more money than you have to as a result of the partial
Allen Federal works
with a lot of companies. This gives us a
chance to see what works well, and certainly what does not. We’ll skip our usual preaching on contract
compliance and discuss three things we’ve seen recently as examples
of what NOT to do: 1. No
Follow Through: The meeting you
had with the customer went well. They
were impressed! That was 5 weeks ago,
though, and you haven’t gotten around to following up. Now, your impressed customer wonders about
your reliability and is on to five new projects. Opportunity lost. Lesson: Always follow up quickly. 2.
Over-promising: If you
can’t produce Justin Bieber to work on your project, say so. Too many companies say “yes we can” when the
real answer is “maybe we can”. Again,
your customer loses faith in you and you’ll likely end up ensnarled in contract
disputes that eat up time and resources.
It is better to under-promise and over-perform. Lesson: Don’t do the crime if you can’t do
the time. 3. Failing to Pay Attention to Detail: Does the task order you’ve just been issued
match with the underlying contract? Were
you supposed to provide a Mercedes, but delivered a Ford? Failing to pay attention is so common we
think that most companies fall into this trap from time-to-time. If the TO doesn’t match the contract, STOP! Too many contractors just “go with the flow”,
which means that they can “go without getting paid” if what they do is different
from what the contract says they should do.
Remember, only a CO can make a change to a contract. Lesson:
Pay attention to the fine print.
Department of Defense should consider replacing commercial buying and existing
simplified acquisition procedures with simplified, readily available procedures
for procuring readily available products and services. This is among the recommendations made by the
DOD Section 809 panel in its “Volume 3” report released earlier this week. This recommendation, number 35 in the full
report, seems to suggest that DOD cease using existing IDIQ contracts, like GSA
Schedule contracts, but it does not come right out and say so. Schedule contracts, arguably, are simplified
acquisition procedures and, additional Panel recommendations can be read
as making these contracts easier to use.
Recommendations 74 & 75, for example, call for the elimination of
redundant documentation requirements or superfluous approvals that add no value
to the acquisition process. This would
seem to embrace recommendations made by Booz Allen Hamilton, and others, to
streamline the Justification and Approval process so that blanket
approvals can be given for the use of non-DOD contracts.
Overall, the report recommends that DOD embrace a
three-tiered “Dynamic Marketplace Framework” for acquisition. The first bucket would be items that are
readily available and require no customization. Rules and regulations would be minimized for
the acquisition of such solutions. The
second bucket would hold solutions that are readily available, but require some
procedures would also be used to acquire these solutions, but a few more steps
would be required. Defense-unique solutions would be
in the third bucket. The
acquisition of these solutions would face a more formal process, but even here
the Section 809 panel recommends new rapid acquisition authorities and other
IT acquisition, the Volume 3 report recommends that DOD adopt
rules to allow for the more flexible acquisition of IT on consumption-based
solutions. Such guidelines could
make it easier for DOD entities to buy “as-a-service” solutions. Recognizing the IT brain-drain in DOD, the
Panel also calls for DOD to create a pilot program where it would be able to
get assistance from technology consultants via an on-line talent marketplace.
Additional recommendations would limit protests under
certain circumstances, with recommendation 67 eliminating the ability of
a contractor to file a protest at the COFC after filing with GAO. Similar recommendations deal with dollar
levels for protests and timelines for protest resolution.
Panel Chairman David Drabkin called the Volume 3
report, “the one with the bold ideas” at a recent gathering at George
Washington University Law School. It is
expected to be the final report of the Section 809 panel. The House and Senate Armed Services
Committees, along with DOD and other interested parties, will now sift through
the recommendations to see which ones make into future Defense Authorization
measures or DOD policy directives. This
will likely be a multi-year process.
In the meantime, the Panel has published an Executive Summary of the Volume 3
report, available here for those who want to take a more complete look: https://section809panel.org/volume-3-report/
The IRS is bringing
back over half of its furloughed workforce to process tax refunds while, at
the same time, US Courts may shutter most of their civil operations
after January 25th if no additional funds are provided by
Congress. These are just two examples of
the shifting sands of federal business during a partial government
shut-down. The person you were speaking
with today, may not be their next week. Re-called
workers, though, are unlikely to be available for industry meetings except when
they are directly related to immediate, mission critical performance. Indeed,
meetings and travel are among the top agency activities to be curtailed as a
result of the partial shut-down. Agencies
like GSA that are operating from fee-based money are even curtailing travel to
ensure that funds for core operations are available for as long as possible.
All of this spells increased frustration for
contractors. Planned projects
sit idly, invoices pile up, and key opportunities for communication
evaporate. The longer the partial shut-down
continues, the longer it will take to unravel when everyone goes back to work,
too. No one can assume that
federal business will be “business as usual” with currently closed agencies for