OEM’s and re-sellers should take a step back at the start of the new fiscal year and prepare to justify their business models from what will almost certainly be increased scrutiny from agencies, and perhaps Congress, in the wake of last week’s contractor raid.  Early signs indicate increased attention over the role of government-only, or government-mostly re-sellers and whether such companies offer good overall values to the government or reduce competition and sourcing channels.  Contractors need to know that there is, and has always been, a segment of the federal community that isn’t sold on the idea that dealing with re-sellers instead of OEM’s is actually in the government’s best interest.  The public attention drawn by the FBI/DCIS raid is likely enough to renew those questions and perhaps draw the oversight community into the arena.  It wasn’t too long ago that contracting and IG officials at the Department of Veterans Affairs waged an all but open war against government focused re-sellers.  Re-sellers were subjected to frequent audits and difficult contract negotiations driven by officials who believed that the companies existed primarily to overcharge the government for solutions they could get for less if they could buy directly from OEM’s.  More than one small reseller went out of business as a result of these efforts, and those that did stay incurred significant legal and other costs that ate into their bottom line.  The “Spanish Inquisition” only stopped when the officials overplayed their hand and were forced to retire.  While it’s way too early to say whether this could happen now at more agencies, re-sellers and OEM’s should prepare now to defend their federal business model and show why it does operate in the best interest of the government.  As agencies begin to ask tough questions, industry needs to be prepared with compelling answers.