The FAR Council issued an Advanced Notice of Proposed Rulemaking (ANPR) in early May that starts the ball rolling on a regulatory change to which all federal contractors must pay attention. While the ANPR promulgates no new rules right now, its focus is on banning agencies from purchasing certain products or services that contain or otherwise utilize semiconductors that are produced, designed, or provided by three Chinese entities: Manufacturing International Corporation (“SMIC”), ChangXin Memory Technologies (“CXMT”), and Yangtze Memory Technologies Corp. (“YMTC”). The ANPR was issued in response to a provision requiring the ban included in the FY’23 Defense Authorization Act. The issuance of an ANPR itself, is a sign to contractors that the Council expects this area to be one of significant controversy, and perhaps greatly increased industry costs. Any proposed or final rule that Read more
Companies on the cusp of outgrowing their small business status sometimes look at their growth as if they are staring into the abyss. Doing business on small business set-asides can, indeed, be good business. It is certainly tempting for a company to continue calling itself “small” even if it no longer is. What’s the problem with that? A look at the “hot off the presses” GSA IG’s Semi-Annual Report to Congress released late last week provides some clear answers. First up is Jonthan Walker, who not only had to pay fines and restitution of over $90,000 but was sentenced to 15 months in federal prison for falsely stating that his company was a Read more
The pace of federal business should be picking up for government contractors, and not just in terms of the release of much anticipated RFP’s for NASA SEWP VI and (hopefully) GSA Alliant3. Companies should be seeing an uptick in federal buying activity right now. In the meantime, here are three things to do and one important item to remember.
1. Make Sure You’re Reading the Room Correctly: Way too many contractors are so prepared to tell the customer about their solution that they fail to read the room, even the virtual one, correctly. Remember that your government customers are people too and that they have their own agendas and concerns. Make sure you take time to understand those before launching into your pitch.
2. Your Next “Government” Sale May Be to a Contractor: Not all federal sales are made directly to government agencies. Regardless of company size and experience, there is substantial business potential in doing business with fellow contractors. Smart companies routinely include other contractors in their business development plans. While companies need to take care that the government may consider these commercial transactions and understand the attendant discounting implications, ignoring this segment of federal business gives business away to competitors.
3. Don’t Cut Corners. It’s tempting to reduce investments in market research, maintaining relationships, or compliance. The latest term we’ve heard several times is “the juice isn’t worth the squeeze”. Really? The Port of Baltimore recently found the fault in that logic when it repeatedly refused to invest in bridge safety. The total economic impact of that disaster was many times of the potential fix. No contractor should believe the line “it can’t happen to me”. It can and it could be very expensive when it does.
One Thing To Remember: No company is entitled to a government contract. While we thought that this was an established point, some recent protests and small business pronouncements have proven otherwise. The federal government retains the right to do business with companies it deems responsible and responsive. It is not mandated to give specific contracts to any one company except in very specific circumstances. While you may hold an ace card, your government customer can usually trump it. Proceed accordingly.
With the FY’25 DOD budget slated to rise only 1%, in effect a real overall spending reduction, pro-defense Congressmen and Senators are looking for work arounds to ensure that critical national security programs continue to be funded. One approach being considered is the restoration of Overseas Contingency Operation (OCO) funding. The OCO path was originally set up as an off-budget spending mechanism to meet needs associated with military actions in Afghanistan. Since OCO money was deemed to be “off budget” it didn’t count against Read more
While there may not be as many proposed acquisition policies in the House Armed Services Committee (HASC)-passed version of the FY’25 Defense Authorization Act as in recent history, there are provisions that contractors should monitor, including those discussing the continued push to ramp up secure supply chain requirements, commercial product and service changes, and the resuscitation of a pilot that would allow DOD to charge unsuccessful protestors fees to recoup costs associated with those protests. Section 811 of the HASC-passed measure makes it clear that once an item or component has been declared “commercial” it should generally be assumed to remain as such, eliminating the need for the collection of certified cost data. Section 822 would provide performance incentives for DOD acquisition professionals who make greater use of commercial solutions. While this is a positive step on one hand, the question must be asked as to why DOD acquisition officials still haven’t climbed aboard the commercial solution boat over 30 years after it initially set sail. Sections 831 and 832 deal with secure supply chain issues. The first part decentralizes the authority of the DOD offices that can monitor and review supply chain issues. The intent is to empower more offices to make determinations about the security and stability of contractor supply chains. The second part discusses the need to make contractor supply chains more visible so that DOD can review and determine risks in them. The bill is expected to be considered on the House floor early next month at about the same time the Senate Armed Services Committee will consider its version of the FY’25 NDAA. The goal is to have a final measure ready for passage as close to the start of FY’25 as possible, though any passage in calendar year 2024 would be welcome. Contractors interested in these bills should act accordingly.