Monthly Archives: February 2019


Steady increases in the federal IT budget may result in a total federal IT budget in excess of $90 billion in FY’20 according to recent analysis conducted by Bloomberg Government.  Bloomberg states that IT spending in FY’18 was nearly $65 billion and that IT budgets are currently on a 5% annual upward trend. Overall, IT spending is divided almost equally between civilian agencies and the Department of Defense.  While spending on existing infrastructure is still the largest single area of where funds are allocated, cloud, agile technology, and emerging areas such as AI are all experiencing increased spending.  This is great news for contractors that can offer comprehensive, multi-faceted solutions.  While feds still need equipment, it is more and more the services that come from the equipment that they want, rather than the machines themselves.  GSA officials recently reinforced this with a prediction that almost all IT business will be service-based in the near future.  Larger companies are, frankly, generally better situated to conduct DOD business than smaller or newer market entries.  While DOD leaders do want innovation, many larger projects have at least one established company as part of the team.  The risk-averse nature of acquisition decision making is one thing that hasn’t changed. 


Annual training on ethics and contract compliance is an established best practice for government contractors.  Like the flu vaccine, it can greatly reduce (but not eliminate) the impact of any adverse actions government agencies may take against your company if incidences of non-compliance are found.  Training should be mandatory and participation be recorded.  Allen Federal has trained many companies on what to do – and not do – in the pursuit of government business.  Don’t be a contract “anti-vaxxer”.  Get your training scheduled today! Contact Allen Federal at to see what we can do for you.


While many had hoped that the President’s State of the Union address last week would at least signal a path to avoiding a new partial government shut-down, that didn’t really materialize.  This leaves Congressional leaders, and feds, with substantial uncertainty over what happens next.  A bi-partisan Congressional group has been working on compromise spending legislation and may well be close to a deal.  Whether the White House would accept that, however, is a large unknown.  Even if Congress passed a spending bill and the president vetoed it, it is very uncertain whether there would be enough votes for an over-ride.  Even the Democratically controlled House would need some level of Republican support for such an action.  Indeed, some leaders in each party at least privately want the President to use his emergency authority to divert existing money and build a border wall so that they can pass a clean spending measure that is separate from that issue.  While that opens a new can of worms for the use of presidential authority, it would, at least, result in a government that was on more sure footing in terms of being open for business.  It is quite likely that this one will come down to the wire, as most shut-downs do.  Contractors must be prepared to close down some operations, again, but may not have to.  Watch next week closely and remember that at least this is more exciting than last Sunday’s “Super” Bowl.


While the Department of Defense issued its new cloud strategy earlier this week it is perhaps more notable for what it doesn’t say than what it does.  On the surface, DOD is embracing different types of cloud solutions with an eye toward adopting commercial cloud platforms.  Anyone who’s spoken with DOD officials, however, knows that pitching an off the shelf cloud solution will likely not lead to much business.  Left out of the policy is the reality that many DOD and service branch leaders want cloud solutions with the highest level security protections, an expensive proposition that automatically counts out all but the largest companies.  Also missing is DOD’s preference for dealing with known, established contractors – especially when newer solutions like cloud are being acquired.  This is essentially reinforced by the cloud policy which takes a “warfighter first” approach and states that cloud solutions must be built “in a manner that never puts the warfighter at risk”.  While there may be some limited, pilot-like opportunities for innovation, the agency has already signaled that larger cloud solutions will go to either established DOD contractors that can implement cloud tools that are both offensive and defensive, or leaders in commercial cloud technology that can meet high security requirements.  Established DOD contractors offering cloud solutions should be familiar with the policy, but also understand what is missing


Contractors buy other contractors all of the time.  Indeed, having a key contract can be the difference between a sale or no sale.  It’s important to remember, however, that regardless of the status of your corporate acquisition, the government considers the original contract holder to be the prime contractor unless a formal novation has taken place.  Experienced government contractor Grant Thornton learned this lesson the hard way.  While they had already executed an Asset Purchase Agreement to buy OASIS contractor Wyle Labs, Wyle’s novation request had not be completed by GSAWhen Wyle bid on an OASIS task order they admitted that Grant Thornton would do 100% of the work (indeed, the even did all of the proposal work).  The Department of Homeland Security deemed the offer non-responsive and found considerable risk in the fact that they would not be in privity of contract with the entity actually performing the work.  When Wyle protested to the GAO, GAO sided with DHS.  Contractors need to be aware of the risks to pending procurements when conducting a transaction.  Similarly, although they should be open and candid with contracting officers about pending deals, the risk remains that an agency will disagree and choose not to award a contract until the transaction, including novation, is complete