The President’s Executive Order on AI, issued November 1^st, put forth wide themes on how government agencies should use AI.  Strengthening AI Governance, Advancing Responsible AI Innovation, and Managing AI Risk were the three main pillars of the order.  Even as agencies and contractors sift through this document, work is already underway that will impact both federal agencies and their industry partners.  OMB states that it will help shape procurement procedures for AI.  This will include developing a system for ensuring federal contracts align Read more

Federal agencies may have more to spend on government acquisition than ever before once Congress does pass FY’2024 spending bills.  Bloomberg Government estimated last week that total FY’24 procurement could exceed $762 billion and perhaps be higher than $800 billion.  Not all of that total would go toward war fighter support, either.  Total IT spending would be about $80.5 billion, with security and protection coming in at $11.3 billion.  Professional Service spending may hit $113 billion, while R&D would claim another $74 billion.  Even smaller spending areas, such as office management (projected to be $2.4 billion) would also grow.  Bloomberg Government estimates that federal spending in all of those markets could grow by more than 5.5% from fiscal 2023 to fiscal 2024.  This is good news for contractors seeking expanded business opportunities.  Although the current Bloomberg report didn’t include information on how agencies would acquire all of their needs, it is a good bet that various multiple award IDIQ contracts, including GSA Schedule contracts, GWAC’s, and similar vehicles will see significant use, especially with the new GSA OASIS+ contract forecast to stand up before the end of the year.  In addition, companies should expect to see the trend toward awarding more business to small, disadvantaged businesses continue.  All of these acquisitions will have to take place in a very compressed time period unless Congress can reach an agreement on FY’24 spending levels prior to Christmas recess.  While there has been substantial action in both the House and Senate on that front, it still appears likely that contractors should expect a new CR into calendar year 2024.  Regardless, companies can start discussions with customers expected to receive funding now and have all preliminary work completed so that actual acquisitions can be made once money is officially available.

The Department of Homeland Security (DHS) will soon use a “cybersecurity readiness” assessment to evaluate whether contractors have appropriate cyber defenses in place prior to making contract awards.  That means that contractors of all sizes must have verifiable cybersecurity protections, policies, and practices in place if they want to continue doing business with DHS.  The coming requirements should not be a surprise to contractors as the government, overall, has increasingly stressed cybersecurity as a key element of being a government supplier.  A November 1^st notice signed by both the agency’s Chief Information Security Officer and executive director of acquisition policy provides more information on the requirement.  The notice, on SAM.gov, states, “It is the Department’s intention to ensure that effective and appropriate cybersecurity measures are in place by vendors supporting work where such measures are necessary. This new evaluation factor will enable DHS to evaluate vendors’ cybersecurity posture pre-award for applicable contracts to inform a best value tradeoff award decision.”  The SAM.gov notice includes the agency’s planned Cybersecurity Readiness Factor methodology and sample solicitation language.  Contractors will be required to show how their cyber systems meet NIST security protocols for handling Controlled Unclassified Information (CUI).  This is similar to, but different than, requirements being implemented at DOD via that agency’s CMMC initiative.  Companies doing business with both agencies may have to develop separate compliance systems.  Contractors bidding on DHS work that contains the cyber requirements will be given a grade of “high likelihood”, “likelihood”, or “low likelihood” of cyber readiness status.  A lower rating could definitely impact a company’s chance for an award.  As such, contractors should carefully review the SAM.gov language and plan to submit comments, which are due to DHS by November 17^th.

No one wants to wake up one morning and find that the federal business in which they invested is no longer possible because new rules they were “too busy” to notice were enacted.  Federal contractors grow their business based on a series of business assumptions, at least some of which had to do with the regulatory framework in place at the time.  News flash:  Those regulations don’t stay the same over time.  No matter how busy a company is, someone must be responsible for tracking legislative and regulatory changes that can significantly impact your government business.  Industry must take the time to look up from its current project to see what’s coming.  This point was underscored this week at the ACT IAC Imagination Nation conference.  Federal speaker after federal speaker practically begged industry to comment on new rules impacting supply chain management, cybersecurity, sustainability and more.  Indeed, there are a host of new rules in the development process that could increase company costs, restrict competition, and make it more difficult to sell to federal clients.  While industry can’t stop all of these, that doesn’t mean they can’t slow down some or change the content of others that would truly not be in the best interests of contractors or their government customers.  Never assume that your government partner understands the business impact of new rules.  Government agencies have their own set of priorities and they rely on industry to offer their perspective.  Taking an active part in shaping the government procurement market used to be part and parcel of what responsible government contractors did.  Somewhere along the way, though, too many stopped looking and just added the cost of rules to their business operations or, in the case of commercial suppliers, just left the market.  When your government customer asks you to take the time necessary to comment on rules, treat that as a business request like you would if it were an RFP or RFQ.  You have nothing to lose but the business you’ve built.  By the way, there are people out there who can help with this.

Holiday season is once again upon us and contractors must take the time to review gift rules on what they can, and cannot, do to show appreciation to a government customer.  Even experienced contractors sometimes get carried away and put themselves, and their customers, in jeopardy with a well-intended, but improper, gift.  People have lost their jobs over improper gift giving.  Don’t let this happen to you.  Allen Federal can provide your company with a quick, thorough, refresher of gift giving rules that will enable you to stay employed and eligible for government business in the new year.  Contact us today at info@allenfederal.com and we’ll put together a program that will ensure that you, your company, and your government customer, have a happy holiday season.