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.
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.
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
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.
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.