A former federal contractor employee is now serving a 70 month prison sentence in connection with his actions of bribing federal officials to obtain construction contracts for his company and then collecting even more in kick-backs to steer the resultant sub-contracts to a specific provider.  John Winslett may have been concerned that, at 66, he didn’t have enough saved to retire.  He offered cash, vintage cars, diamonds and weapons to Army personnel who then steered an estimated $19 million in business his way.  All of the goodies, though, equaled only about $100,000, far less than the over $700,000 in kickbacks he took from the sub-contractor. That should have been enough to pay for a few years in a place nicer than his current jail cell, if only he didn’t get caught.  Contractors absolutely must monitor the actions of those who develop business for them.  Few companies really send BD people out with instructions to buy off federal officials, but they can nevertheless be responsible for their bad actions.  At a minimum, the company will have to hire outside legal help to protect its interests and will then have to work to regain trust and re-establish the company’s image in order to get future business.  Monitoring employee actions in the field may seem expensive, but it is far less so than what Winslett’s company is now facing.  Make sure your company has proper oversight systems in place to ensure that one or two people can’t place your entire operation at risk.

Bloomberg Government clarified recently that one-in-three IT dollars are placed through Best In Class (BIC) contracts for Information Technology Solutions. That’s a huge difference from their January report showing that BIC vehicles account for only 7% of sales overall.  One big reason for the difference is the emphasis that the Office of Management and Budget, GSA, and others placed on using BIC’s specifically for IT acquisitions.  Agencies were encouraged, directed, and generally made to use BIC vehicles as their preferred IT acquisition method.  Other BIC vehicles, according to Bloomberg sources, may have some elements in them, such as LPTA provisions, that make them less desirous overall.  The bottom line for contractors is to still have approximately three acquisition methods in mind when discussing a potential buy with a customer.  If the solution is predominantly IT and the company has one or more BIC IT vehicles, that could definitely be of interest to the client.  Outside of IT, though, the numbers show that a BIC vehicle may be something nice to have, but the absence of one need not be a show-stopper.  Indeed, a contractor’s recommendation may be a major factor in how an agency chooses to acquire solutions such as professional services.  As such, contractors should definitely be prepared to offer input.  Promoting easy-to-use contract methods is an important part of building trust with a client.  As GSA proceeds with planning its OASIS follow on, companies may want to pay close attention to how user-friendly it will be and what the new vehicle’s capacity will be to handle OASIS-like projects.  The right solution is important, whether the acquisition is made through a BIC contract or another approach.

Cybersecurity and IT remain top concerns on the Government Accountability Office’s (GAO) biennial list of high-risk government programs.  While this may come as a surprise to some, given the considerable rhetoric surrounding these issues, a closer look shows that government tech systems remain high-risk for a number of reasons.  First, Congress fails to put its money where its mouth is.  Agencies can’t get money in their own budgets to modernize IT and strong Senate opposition has prevented the passage of a more generalized $1billion boost to the IT Modernization Fund.  Second, any experienced IT contractor will tell you that there can be a huge gulf between IT system security directives and how agencies actually go about acquiring IT equipment.  Perhaps the best example of this is agency use of E-Bay to acquire old equipment that agencies need in order to run current systems, regardless of supply chain directives. Agencies turn to E-Bay, with all of its myriad risks, because new parts for existing solutions are no longer available.  Again, lack of funding prevents real modernization.  Third, some agencies also look requirements right in the eye and blink.  It’s simply “too costly” to buy compliant equipment, regardless of whether there are secure supply chain or other security directives.  Besides, the contractor has to certify, right?  Pushing off requirements on contractors is a time-honored, if incomplete, way to try and ensure cyber compliance.  Contractors that have compliant solutions and actually obtain proper certifications can be at a disadvantage in the market.  These companies need to let OMB and Congress know what they see “in the trenches”.  Only when Congress gets serious about funding and OMB provides appropriate oversight can we expect to see cybersecurity no longer be a “high-risk” area in government. 

There’s a great line from old movie “Desk Set” where Spencer Tracy quizzes Katherine Hepburn on some early version of an aptitude test.  Tracy’s character says to “never assume” circumstances that aren’t actually made clear.  So it is with government business.  Here are three things contractors should never assume as they approach the federal market:  1.  Don’t assume that your federal prospect knows anything about your product or service.  This is true even if your solution has an established commercial market footprint.  Federal officials are approached every day by contractors trying to sell everything from copier paper to drones.  Make sure your target knows what you’re talking about and why looking at your solution is worth their time.  2.  Don’t assume that your customer knows about certifications and other qualifiers contractors are supposed to have.  If we’ve learned anything lately its that federal customer knowledge of FedRAMP requirements, secure supply chain mandates, and best value directives is highly uneven.  It’s not enough to say that your solution meets “Section 508” standards.  Spell it out.  Provide some background on what that is and why federal agencies have to buy 508-compliant technology.  Expect pushback, too.  While you may know that federal agencies are supposed to buy FedRAMP-ed cloud solutions, more than one federal buyer has looked the other way.  Don’t take it personally.  3.  Don’t assume that your customer knows how to buy from you.  Make sure your sales team has the latest information on how to buy from the GSA Schedule, NASA SEWP contract, or even how to make a Micro-Purchase.  Customers can have their favorite way of buying and if you’re solution is outside their comfort zone, its vital that you provide the information they need to buy from you correctly through the vehicle that is the best fit.  Federal agency customers have a mission to meet and are often focused on that, not on how to buy the solutions they need to support that mission.  Make sure you know that part of the puzzle fits.  Hepburn, by the way, aced the test.

“Arbitrary reductions would not be the right way to go,” said Senate Armed Services Committee Chair Jack Reed (D-RI) last week, when asked whether he expected deep cuts in Pentagon spending as an offset to pandemic funding.  He prefers to examine proposals made by Pentagon leaders first, to see what weapons programs and other cuts they recommend.  Reed, and other Congress watchers, also point out that any steep defense cuts would require Republican support given the 50-50 split in the Senate and the razor-thin Democratic majority in the House.  This could all be good news for contractors that sell anything from professional services to products to DOD customers.  Many companies have expected substantial cuts to programs as the new Congress looked for ways to balance defense spending with civilian agency priorities. Contractors thathave been planning for flat DOD spending and may be well-positioned to continue doing business if such forecasts prove accurate.  Where defense money ends up is still far from certain, despite Reed’s statements and those made in late 2020 by his House counterpart Adam Smith (D-WA).  At least one member wants further cuts to so-called “4^th estate” DOD civilian workers.  Neither party, however, wants to be seen as weak on defense spending with the growing international presence of China and Russia.  Defense spending may not increase as it has, but most companies should continue to find good opportunities throughout the agency.