Government contractors should be prepared for a more activist
acquisition policy agenda from the incoming Biden Administration. While this could
mean interest in innovative acquisition practices and increased use of
technology, it could also mean new rules.
Either way, the acquisition landscape that currently represents your
business is about to change. Democratic
administrations traditionally place more emphasis on government management
policy than their Republican colleagues.
This means more ideas from people that likely have substantial
experience in their specific area and have specific goals they want to achieve. Management and acquisition positions also
traditionally get filled much earlier.
Experienced officials that can get in the door sooner have more time to
implement their agenda. That can
cut both ways for contractors. While some previous Democratic administration
officials have wanted to keep industry at arms-length, most welcome such
contact. That’s the up-side of having
officials in place who focus on specific areas others might not. Such a focus, though, also has a potential
down-side. At least one previous OFPP
Administrator, for example, took a very dim view of GSA Schedule Blanket
Purchase Agreements. It took education
from inside and outside government to prevent that popular tool from being
banished. Contractors can expect
to see names for OFPP and GSA administrator surface soon and it’s a bet
that some will be familiar. Make
sure your company is prepared to work with the new team, whether it’s
to support a beneficial change, or advise on why other ideas might cause more
harm than good.
Even before the award of much-anticipated new IT contracts, such as
ASTRO and StARS’s III, GSA’s IT Category was responsible for over $30 billion
in IT spending last fiscal year. That’s a
15% jump from the previous year.
Contractors need to understand the increased role GSA plays in IT
acquisition, not just in terms of Multiple Award Schedule use, but what it
means for how they approach the federal IT market overall. Part of the growth is due to so many
GSA IT contract vehicles being certified as “best in class” (BIC). While use of BIC vehicles generally remains
steady at 7% of government spending, the total dollars going through such
vehicles rose as overall contract spending increased. Companies are also starting to report that
potential customers are looking for the BIC label when they consider a buy,
potentially making such contracts an important part of a firm’s overall
portfolio. Another reason is that GSA
has a wide variety of IT and IT-related contracts, including the EIS
telecommunications vehicle which is starting to see more and more business as
agencies face OMB pressure to modernize those solutions. GSA’s federal IT market share is only
expected to grow, not only with ASTRO and StAR’s, but with the new Polaris
vehicle, expected to come on-line in early 2022, as well. Partnering with the agency and with other
contractors should be a key part of an IT contractor’s federal business. StAR’s and Polaris, for example, are
both small business set-asides, meaning that larger firms must seek out
partners that will prime such vehicles in order to have viable channels
that customers want when it comes to making IT procurements. How GSA “does” IT is changing. Contractors need to be aware of this and
ensure they keep pace
Among the many lingering impacts of the sorry scene at the US Capitol
January 6th will be a slow-down in the pace of government business, lasting at least
for the next two weeks and conceivably through all of January. It is precisely because the situation is
still very much developing that contractors may see an impact. Cabinet secretaries resigning and the
departure of other key personnel are a huge distraction, if nothing
else. Disruptions to internal reporting
chains, gaps in those chains, and a tendency to wait until the storm clouds
clear on the part of some federal offices will further impact business. It is a safe bet that each federal agency
will also review their own internal security procedures, meaning that
key people will be otherwise engaged and unavailable for contractors that want
to talk about something other than security.
While progress will continue on existing projects and even planning for
new acquisition vehicles, such as GSA’s Polaris, will go on, larger and newer
projects may slow down until a new team is in place. January was already lined up to be a
problematic month, with the MLK Jr. holiday falling on the 18th,
a holiday for at least local federal workers on January 20th, a
planned women’s march soon after, and the annual Right to Life march slated for
the end of the month. It’s tough
to focus on acquisition when there is a steady stream of distractions. Be patient and focus on what may
actually move forward.
The late December passage of an omnibus appropriations package means
that your federal customers should know their individual budgets for the rest
of Fiscal Year 2021 by early February. Most
agencies should also have at least as much money as last year, with many having
even more. That means that its time for
contractors to move discussions from the “what if” phase, to a more solid
footing. Having more specifics will help
you better identify an actual business pipeline and dedicate resources accordingly. While there is still definitely time to have
comparatively longer discussions on capabilities and new offerings, the
tenor of your customer discussions should gradually shift to specifics.Now is also a good time to hone your
company’s messaging. Never
underestimate the need to establish or update your company’s branding
message. You’re competing for time and
attention not only with hundreds of other contractors, but with the “day jobs”
of end user customers. It can be tough
to break through without a clear, topical, message and good relationships. Remember, too, that the relationships don’t
always have to be yours. Leveraging
partner relationships to develop business is an excellent way to expand your
horizons. It’s also important to
always have an answer to the “how’ question.
Don’t make your prospect guess at how they can do business with you. Provide them with 2-3 recommended acquisition
options and be prepared to show why they’re a good fit for the specific
circumstance. A new administration will
mean new budgets and priorities – mostly next year. Now is the time to move ahead for FY’21.
Large contractors could see both increased small business set-asides and
enhanced sub-contracting requirements if early indications from the incoming
Biden Administration are any guide. Contractors need to start looking at some of
the proposed policies and how they could impact the way in which federal
business gets done with less than two weeks to go before the new team comes
into power. One likelihood is a new
emphasis on small business participation in federal contracting, potentially
including a $400 billion plan “to support small businesses and tackle
inequities in the federal contracting system.”
The basic idea is to increase small business prime contract
opportunities, especially for small, disadvantaged businesses. The Biden campaign website called for
tripling the current 5% goal for prime contract awards to such firms by
2025. Large business
sub-contracting goals with disadvantaged businesses could also increase. Biden’s team has also been discussing
“contract bundling”. Despite existing
rules that limit bundling, contractors could see more regulations that further
direct federal agencies to break larger procurements into smaller pieces so
that more small primes can participate. The
bottom line for prime contractors is to expect more competition via set-asides
and potentially increased costs, depending on which proposals are actually
adopted. Remember, too, that
executive orders have become the favored way to implement a wide swath of
policy changes. These can be implemented
quickly, with minimal time for industry to challenge or shape their basic
structure. Be prepared.