A Facebook friend of ours recently wondered whether the government could
accept free services to complete and repair the border wall along the US
southern border. Although there are many angles to this issue, strictly speaking from a
procurement perspective, the answer here is probably “no”. The federal government cannot usually accept
free services and goods. This
prohibition dates all the way back to the late 19th century when
Congress passed the Anti-Deficiency Act. The simple intent was to prevent people or
companies from providing something of value for free and later submitting a
claim, thus busting an agency’s budget and requiring additional appropriations
from Congress. Like most government
rules, however, there are exceptions. One is in the case of a true emergency
involving “imminent” danger to safety of human life or the protection
of property. This exception has been
discussed frequently over the past year given that President Trump declared a
national emergency over COVID-19. Other
exceptions are also tied closely to public health circumstances involving
the military or the Public Health Service. Outside of these areas, however, contractors
cannot offer something for free unless they expressly agree to do so in writing
via a contract. For GSA Schedule
contractors, however, this does not mean that the government doesn’t want to
know about free services or goods you provide in the course of your commercial
business. Although the
government may not be able to accept them, GSA rules state that contractors
must disclose them so that the government can take advantage of lower overall
prices. More than one company has found
out the hard way that “free” can cost you something.
The IT Modernization Fund will end up getting its $1B infusion after all. Efforts of senior administration officials,
coupled with specifics on where the money will be spent, were enough to
overcome Senate doubters. The $1B is
part of the $1.9T COVID relief package. $650
million of the money is going straight do DHS for cybersecurity projects. The Cybersecurity and Infrastructure Security Agency will oversee the
distribution of that money. $200
million will go to the US Digital Service for various IT projects, with the
remaining $150M headed to the Federal Citizens Services Fund. The IT Modernization Fund is a type of
revolving account, meaning that agencies will have to pay that money back to
the fund via realized savings. Other
agencies will then be able to apply for fund dollars for their own projects. The directed spending approach, however, may
be an indication of how the fund will receive additional money in the
future: specific projects up front, with
re-paid funds available for others later. While it is too soon to tell what extra money
might come, it is worth noting that the Biden administration has already
indicated support for as much as $9 billion for it. Contractors should reach out to the three
initial agencies receiving funds now. While
some of the cyber money may be spoken for, contractors previously played an
important role in shaping project proposals seeking fund money. In addition to the funding for the TMF and
other cybersecurity and IT initiatives, the Senate bill included the extension
of the Section 3610 authorities to let agencies pay contractors if they cannot
work during the pandemic.
Federal government contracting is not a “reinvent the wheel”
business. Here are three mistakes
others have made so that you don’t have to: 1. Trying
to be everywhere at once: Many
contractors, and not just new ones, are overwhelmed by the size of the federal
market. They reach out to as many
agencies and departments as possible, but don’t take the time to learn about
any in detail. This is a recipe for
frustration, not to mention uneven sales.
A focused approach to the market works best. Not even the largest contractors try to be
everywhere at once. Pick a small
set of initial targets, get to know them, and then spread out slowly from
there. 2. Trying to do it all yourself: Experienced, successful contractors
acknowledge that federal business is not a go-it-alone business. You need help, whether its sales, marketing,
compliance, or contracting assistance.
Remarkably, some companies know this at first and then slowly morph to a
“DIY” attitude. Look, trying to wear too
many hats will not only cause them to fall over, but you will, too. Get help when you need it. It’s not a sign of weakness, it’s a sign that
you take sustained growth seriously.
3. Failure to do proper
research: You’d be very surprised
at how many contractors get into a meeting with a prospect only for the
prospect to say 5 minutes in, “You know we just brought that solution last
week?” Your heart sinks as you realize
you’re not only wasting your time, but the prospect’s. Make sure you know what’s happening in the
agencies you target. Be
ready ahead of time to engage on upcoming needs and help define them. Also, while everyone likes to sell a prospect
“something they don’t even know they need”, using that as your entire
government approach likely won’t end well, either. Federal agencies generally have a good idea
of what they need and, more importantly, what’s in their budget. There’s always an opportunity for
something new, but, more often, its better to know what your customer is
looking for and try to fulfill it.
Have other “would you believe?”
stories? Send them along at info@allenfederal.com.
A former federal contractor employee is
now serving a 70 month prison sentence in connection with his actions of
bribing federal officials to obtain construction contracts for his company and
then collecting even more in kick-backs to steer the resultant sub-contracts to
a specific provider.
John Winslett may have been concerned that, at 66, he didn’t have enough
saved to retire. He offered cash,
vintage cars, diamonds and weapons to Army personnel who then steered an
estimated $19 million in business his way.
All of the goodies, though, equaled only about $100,000, far less than
the over $700,000 in kickbacks he took from the sub-contractor. That should
have been enough to pay for a few years in a place nicer than his current jail
cell, if only he didn’t get caught. Contractors
absolutely must monitor the actions of those who develop business for them. Few companies really send BD people out with
instructions to buy off federal officials, but they can nevertheless be
responsible for their bad actions. At a
minimum, the company will have to hire outside legal help to protect its
interests and will then have to work to regain trust and re-establish the
company’s image in order to get future business. Monitoring employee actions in the
field may seem expensive, but it is far less so than what Winslett’s company is
now facing. Make sure your
company has proper oversight systems in place to ensure that one or two
people can’t place your entire operation at risk.
Bloomberg Government clarified recently that one-in-three IT dollars are
placed through Best In Class (BIC) contracts for Information Technology
Solutions. That’s a huge difference from their January report showing that BIC
vehicles account for only 7% of sales overall.
One big reason for the difference is the emphasis that the Office of
Management and Budget, GSA, and others placed on using BIC’s specifically for
IT acquisitions. Agencies were
encouraged, directed, and generally made to use BIC vehicles as their preferred
IT acquisition method. Other BIC
vehicles, according to Bloomberg sources, may have some elements in them, such
as LPTA provisions, that make them less desirous overall. The bottom line for contractors is to still
have approximately three acquisition methods in mind when discussing a
potential buy with a customer. If the
solution is predominantly IT and the company has one or more BIC IT vehicles,
that could definitely be of interest to the client. Outside of IT, though, the numbers show
that a BIC vehicle may be something nice to have, but the absence of one need
not be a show-stopper. Indeed, a
contractor’s recommendation may be a major factor in how an agency chooses to
acquire solutions such as professional services. As such, contractors should definitely be
prepared to offer input. Promoting
easy-to-use contract methods is an important part of building trust with a
client. As GSA proceeds with
planning its OASIS follow on, companies may want to pay close attention to how
user-friendly it will be and what the new vehicle’s capacity will be to handle
OASIS-like projects. The right
solution is important, whether the acquisition is made through a BIC contract
or another approach.