While the House left Washington a week early, the Senate will follow suit on time this week for the August recess. In addition to appropriations bills, here is the status of three legislative topics of interest to government contractors:
1. Senate Punts on FY’25 National Defense Authorization Act (NDAA): The Senate left town without a floor vote on the FY’25 defense authorization bill. Progress on the measure has gotten caught up in election year politics with Republicans seeking to force uncomfortable policy votes on vulnerable Senate Democrats. While this isn’t the first time the chamber has gone on break without passing a defense measure, there is increased concern now over timing. No one should expect an FY’25 NDAA until December at the earliest.
2. In a move that’s good news for contractors, the Senate did make progress on a measure that would consolidate and streamline cyber-related regulations. The Streamlining Federal Cybersecurity Regulations Act will create an interagency group in the White House’s Office of the National Cyber Director focused on harmonizing U.S. cyber regulatory regimes and establish a pilot program to test new regulatory frameworks. The measure has broad bi-partisan support and is important to contractors that currently face a patchwork of overlapping, and often inconsistent, cyber rules.
3. The Senate also moved forward on multiple AI-related legislative initiatives. The Future of AI Innovation Act, the CREATE AI Act, and the NSF AI Education Act are just three measures that saw action as a package. Although some have bi-partisan support, others have drawn criticism from Republicans who fear that a slew of new regulations will hamper, not help, AI development and implementation. Another looming question for these bills is that, under normal circumstances, the NDAA would be the expected vehicle of choice for passage but, as noted above, that measure has its own challenges. Nevertheless, contractors absolutely do want to pay attention to what Congress has in store. New laws could change your business for better or worse.
Even though committees have completed work on all twelve FY’25 spending bills, the House of Representatives is unlikely to pass most of them anytime soon. This means that contractors and their government customers can expect a delayed start to new projects in the next fiscal year, though how long a delay is unclear. All bills, except for the Energy and Water appropriations measure, were pulled from the House calendar last week and again this week, meaning that the earliest those bills would see action is in September. House appropriators further indicate, though, that they may not bring the remaining measures to a vote at all. Read more
The combination of the President’s decision to not seek reelection, fallout from the Supreme Court’s Loper decision, and a “laser focused” Office of Information and Regulatory Affairs (OIRA) all mean that contractors can expect a “regulatory circus” between now and January. While this circus may produce gasps and surprises like the real thing, there likely will be little humor in store for industry. First, the president’s decision not to run again puts pressure on those supporting his regulatory agenda to move as quickly as possible to finalize guidance in priority areas. Look for faster-paced work on socio-economic rules, such as those having to do with climate or labor-related issues. These could have a real impact on contractor compliance Read more
A top Navy admiral, two employees of a would-be government contractor, the former Army CIO and the head of a well-known service provider all find themselves in ethical hot water for again failing to follow basic ethics principles. The issue? Alleged improper preference in acquisitions tied in one way or another to a post-government hiring promise. The size of the business also didn’t seem to matter. While the incident involving the larger company, Service Now, was a multi-million-dollar deal, the Navy sole source contract, with Next Jump, was for only $355,000. Now both sides in that incident will quite likely spend more than this amount of Read more
With two and a half months left in FY’24, all major GSA IDIQ contracts are on track to exceed their FY’23 use levels. FY’23 itself was a strong year for the use of GSA IDIQ contracts, making the potential record-breaking use for FY’24 even more impressive. Led by the Schedules program and the OASIS and Alliant contracts, GSA’s IDIQ’s should easily exceed $75 billion in business by the end of the fiscal year and may very well exceed $80 billion. Indeed, the Alliant, OASIS, Vets, and StAR’s programs have already exceeded their collective business totals for all of FY’20. These numbers are a strong indicator to contractors of the importance of having robust IDIQ contract vehicles. Agencies increasingly use such contracts year-round, but especially in the 4th quarter when time is short, and a premium is placed on rapid acquisition. Bloomberg Government estimated that the use of all IDIQ contracts accounted for 66% of business in the last quarter of FY’23. Nothing suggests that this number will be lower this year, while actual use could exceed it given the lateness in FY’24 appropriations. In addition to ensuring that all IDIQ contract offerings remain current, contractors should also have a copy of the IDIQ ordering procedures handy to share with any customer who may not know how to use such contracts. FAR 16.504 contains these rules, but a copy is also available from Allen Federal by emailing info@allenfederal.com. Contractors cannot assume that their customers already know these rules, even though IDIQ vehicles are obviously popular. Schedule contracts also allow for contractor teams to bid on task orders that a single contractor may not be able to perform. Make sure, however, that teaming agreements are in writing and that their format is not plucked out of the blue from an internet form. GSA’s IDIQ’s should be an important part of any company’s year-end selling arsenal. Making sure that you and your customers know how to get the most out of them is increasingly important.