While six of the twelve FY’23 spending bills are ready for a House floor vote, progress on the defense and Homeland Security measures is still lagging.  According to a summary provided by Bloomberg Government, appropriators are unsure of whether progress on these bills, or a floor vote on the six-pack “minibus” will take place by the end of next week, when the House is scheduled to go on summer recess until after Labor Day.  Even less progress is reported in the Senate where, despite action on FY’23 spending measures, Senate Democrats reportedly have yet to engage their Republican colleagues.  That’s a recipe for confrontation given their slim majority.  Contractors can see some signs of hope, however, as total defense spending, whenever Congress gets around to passing it, should exceed the President’s initial budget request. The Senate Defense Authorization bill, for example, included $45 billion in additional spending, an amount that one appropriator called “a good start”.  That would mean more money for both personnel and projects.  Of the measures included in the House minibus, contractors may be most interested in the VA-Military Construction measure.  Expect more money in that vehicle as well, as appropriators seek to modernize defense installations and provide easier access to benefits for veterans.  A continuing resolution is a certainty for the start of the 2023 Fiscal Year, but work done to date on final bills may mean that Congress will act before the end of the calendar year.  That timeframe could be considered the new “on-time” baseline, giving contractors and their customers more time to plan and address strategic needs.

Officials in GSA’s Public Building Service expect federal agencies to reduce their office space by 20% and 50% as the federal workforce becomes more flexible and remote work more ingrained.  Many contractors, too, are planning to reduce their office footprints.  These changes, though, will impact how companies work with agencies.  Here are three things contractors need to consider to ensure that the rush toward decentralization doesn’t cause a hit to the bottom line:

1.  There’s Still a Benefit To Being Near Your Customer:  While rank and file federal workers may have the ability to work remotely some or all of the time, senior executives will continue to be in an office on a regular basis.  These are the decision makers that contractors want to develop or strengthen relationships with.  They often create or manage critical programs on which contractors work.  Being able to regularly interact with agency leadership remains key to success.  As such, being physically close to such officials will continue to be important.

2.  People Still Like To Meet In Person:  An article in today’s Wall Street Journal states that professional gatherings are back.  People, especially parents with children at home, like to get out and network with other professionals.  Regardless of the personal motivations, the preference of many for in-person vs. virtual meetings is undeniable.  Contractors need to ensure that they support opportunities for their workforce to attend conferences, expos, and other events, regardless of whether they primarily work from home or an office.  Learning from others and making new relationships helps your business stay on top of trends and build new partnerships.

3. Company Gatherings Help Build Loyalty and Synergy:  It’s not just customer meetings.  Internal company meetings are vital as well.  While there are benefits to having access to talent wherever people may reside, contractors need to keep in mind that full-time remote workers sometimes have remote ideas of loyalty or that they’re part of a larger team.  Bringing people together on a regular basis can help retain talented remote workers and can foster ideas and collaboration that working remotely cannot.  We’ve seen several instances of remote workers griping about having to go into an office, only to acknowledge that there were real benefits to doing so at regular intervals.  The federal and contractor workforces are changing.  Knowing what that means for your business helps ensure that the bottom-line changes for the better.

We recently wrote about why contractors shouldn’t always take the word of their CO as the final authority in all circumstances.  What’s a contractor to do, though, when its customer asks them to bend the rules and then goes on to commit procurement fraud?  The example set by the CEO of Spectral Energies is definitely one to follow.  The CEO was asked by an important, well-respected customer to hire a young woman to work on his contract. The CEO and the customer had a good relationship and, like many contractors, the CEO was initially happy to comply.  When it turned out that the new hire’s talents did not match the requisite job description, though, the CEO became concerned and moved to terminate the employee who then went to work for a competing firm.  The customer, upset with Spectral, then divided its contract with the other firm, giving more than half to the company where the employee now worked.  These are two major red flags.  While the CEO didn’t want to initially upset the customer, he would certainly protect his business.  He did the right thing, which in this case was contacting the Air Force Office of Special Investigations.  Explaining that he was duped into hiring an unqualified person, the CEO went on to point out the other issues in the case.  His communication saved his firm from any further problem and caused the Air Force to pursue the wrong doer.  While contractors certainly want to maintain good relationships with their clients, bending or breaking the rules can have serious consequences.  Companies should never hire unqualified workers, even at the urging of customers.  Problems must be properly reported in a timely manner.  Spectral Energies could have suffered millions in penalties and jeopardized future business if they had stayed silent.  No single piece of business is worth risking your company for.  For more on the details of this fascinating story, which we are not making up, search on the term “Spectral Energies fraud”.

While we usually reserve this space to promote the myriad and well-known capabilities of Allen Federal, today we give a shout out to the General Services Administration.  The agency has made significant improvements in customer and contractor training and is always responsive when industry has questions.  Like most large organizations, there always things to work on, but, overall, we find GSA officials to be easy to work with and always professional.  We work with many agencies, some of which also do a nice job in this regard, but GSA’s work is deserving of special recognition.  Industry does see the improvements and appreciates the agency’s efforts

A “slow/micromanaged Cold War resource system,” is “the number one obstacle to us competing” according to Deputy Assistant Secretary of the Air Force for Acquisition, Major General Cameron Holt.  In remarks made recently before the Government Contracting Pricing Summit and reported in the Coalition for Government Procurement’s Friday Flash, Holt goes on Read more