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HOW LONG WILL THE CR BE? WILL THERE BE A STIMULUS BILL?

While there is an agreement in concept to pass a Continuing Resolution (CR) to start off the 2021 Fiscal Year, there is, as yet, no agreement on the length, nor on whether another pandemic-related stimulus bill will pass along with it.  Many Republicans are seeking a CR that keeps the government open into sometime in mid-December.  This is consistent with conventional thinking that final FY’21 appropriations could be finalized by Christmas.  Democrats, though, may want a shorter bill as it will provide additional opportunities to point up differences on policy matters between the two parties.  There is also no agreement on whether a new pandemic relief bill will pass, or, if it does, how large it could be.  An attempt last week to pass a comparatively smaller measure, less than the $2 billion some elected officials have called for, failed in the Senate.  This can all be a distraction for contractors.  We’ve said before that a new relief measure would likely be a net negative for contractors as it would impact out-year spending and create a larger future bill that would drag down many sectors of the economy, including government contracting.  The good news is that no political leader is discussing a shut-down.  It is highly probable that a CR will be passed that will fund the government at least through the November election, if not longer.  That provides some level of stability for business.  The outlook for a relief bill is much more problematic.  It may well be that each party would rather have the issue to use on the campaign trail and not an actual bill.  Regardless, companies should not get distracted over pandemic-relief “what if’s”, especially at year end.  We will keep you posted on changes that demand your attention.

ACQUISITION LEADERS AGREE THAT SUPPLY CHAINS WILL CHANGE TO ADD DOMESTIC CAPABILITIES

While contractors can’t exactly “forget” secure supply chains, they shouldn’t just be focused on that one issue.  Enhancing or creating domestic production capacity and creating additional preferences for such products in federal acquisition is fast-becoming a national, and perhaps political, priority.  Both senior acquisition officials, and their bosses, have expressed concern on the US market’s reliance on foreign-made product in light of the COVID-19 pandemic.  Shortages of pharmaceuticals, medical equipment, and even specialty metals needed for critical technology systems have all woken up federal logistics and national security officials on the need to create or enhance domestic production in these and other critical areas.  Contractors can expect the next Congress to pass legislation that could either encourage or mandate increased domestic content in provided solutions.  In addition, laws or rules that require companies to share more information on their supply chain capabilities may also be implemented.  This may all be more expensive for both contractors and the government, but the current thinking is that the cost is worth it if the net result is increased US security, whether it be on the technology, healthcare, economic, or some other front.  This issue has already attracted some attention, but will likely move closer to center stage in the coming months.  Contractors need to watch these developments closely and be prepared to adapt accordingly.

PROCUREMENT COLLUSION STRIKE FORCE FOCUSES ON GOVCON & CRIMINAL PENALTIES

The Department of Justice’s Procurement Collusion Strike Force, formed last year to increase contract compliance reviews, continues to expand its effortsAny company with sizeable government business should take notice, not just for the task force’s actions, but for its focus on criminal prosecution under the False Claims Act.  Most enforcement actions have traditionally been undertaken by the Civil Division of DOJ.  As a result, penalties against individuals or companies caught violating rules include fines and potential suspension or debarment.  These are strong penalties in and of themselves, but do not ultimately compare to criminal penalties that can seriously harm a corporate reputation and land individuals in a real prison, not just suspension and debarment jail.  Attorney Michael Volkov, writing in JD Supra, points out: “Last year, the Antitrust Division unveiled its important compliance guidance, Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations.  Companies involved in public procurement should adopt and implement robust corporate compliance programs.”  It may also be a best practice to read the DOJ report to ensure that those programs feature components recommended by the agency.  Approximately one-third of the task force’s open criminal investigations involve government procurement.  Such actions could cost contractors millions in fines, legal fees, lost business, and damaged reputations.  Compliance is something that few people like to talk about, but it is most definitely the “ounce of prevention” that can protect both you and your company

UPDATE YOUR GSA ADVANTAGE CATALOG & PRICE LISTS BY OCT 31st!

GSA issued an update last week on related to its Schedules consolidation process reminding contractors that their GSA Advantage catalogs and price lists must be updated BY October 31st.  

This is despite reports that some acquisition offices are already overwhelmed with consolidation and end-of-year work.   

Regardless, contractors that do not update their price lists and catalogs may have their information removed from GSA websites. 

CONTRACTORS FACE BRAVE NEW WORLD ON SUPPLY CHAIN VETTING AND INFO SHARING

Your company, an established government contractor, is approached by a new company with a potentially great technology solution.  Does it, though, present a supply chain risk that federal customers can’t use?  You think it might and provide a new government supply chain review board information.  It turns out, though, that the company is legit.  They’re now suing you, though, because you reported them as a potential risk.  Sound like we’re jumping ahead to Halloween?  Not really.  This is exactly the scenario government contractors could find themselves in when trying to navigate the government’s changing secure supply chain rules.  A new interim rule, created by the passage of the Federal Acquisition Supply Chain Security Act of 2018, gives the government a variety of tools to exclude an inappropriate company from contracting with the federal government if there is a potential supply chain risk.  Similarly, government contractors are encouraged to share information on potential secure supply chain risks, including information on problematic companies.  Contractors may, however, face lawsuits or other legal action if the information doesn’t pan out.  Talk about a Catch 22.  Federal contractors have to be increasingly careful about the partners they use in their federal supply chains, but also must take care to make judgements only on well-founded information.  Someone once said that government business is not a “go it alone” proposition.  This is indeed the case here. Make sure your firm works with outside legal and other help to navigate these increasingly tricky waters.