Debarment actions, those that prevent a company or person from doing business with the federal government for longer periods of time, are more prevalent than shorter-term suspensions. That is one key takeaway from the recent annual report of the Interagency Suspension and Debarment Committee (ISDC) for FY’20. The ISDC is an interagency body consisting of Federal agencies that pool resources, experience, and practices to provide support for suspension and debarment programs throughout the federal government. The fact that debarments, which can last for years or longer, were more numerous than months-long suspensions should drive home the point that government agencies are serious about doing business with compliant, ethical companies. There were approximately 1,200 debarments in each of fiscal years 2019 and 2020, against 722 suspensions in FY’19 and 415 in FY’20. Suspension or debarment are both typically referred to as the “death penalty” for government contractors as such status not only prevents doing business as a prime contractor, but as a sub, and, often, as a contractor with state or local governments. Even when companies take remedial action and are returned to active status they may still confront trust and other issues associated with having been suspended or debarred. Similarly, while some companies certainly do “come back from the dead”, it is a long and expensive process that can wipe out profits and reduce revenue. In short, no contractor wants to find itself in front of a federal suspension or debarment official. It is also worth noting that it is not only companies that can end up in such a predicament. Individuals, too, are frequently placed on the excluded parties list maintained on the SAM.gov database. In fact, an individual’s term on the list can differ from that of the company with which they had been affiliated. It is an established best practice, therefore, for any contractor employee associated with a compliance or suspension action to have their own counsel. It’s expensive enough to do business with the federal government these days. Don’t make it more so by failing to comply with applicable rules or violating ethics mandates.
Today we remember D-Day, an event that turned the tide of the war in Europe 78 years ago. Thousands of people gave their lives so that freedom could be won. We need to ask whether we are making good use of this hard-won right or whether many of us take our freedoms for granted. Take a minute today to give thanks for those who made the ultimate sacrifice and ensure that you are being a responsible steward of their gift
Despite Biden Administration rhetoric to the contrary, the year-end federal market is shaping up to be one that is dominated by larger, experienced government contractors. There are several reasons why this is the case, but these three should be on anyone’s list:
1. A Slew of New Rules: This newsletter highlights the addition of new acquisition rules and focus areas nearly every week. Whether it’s a new rule on cybersecurity, environmental preference policies, increased Buy American standards, or vaccination requirements, the fact is that government contractors today are saddled with more burdens than they were two years ago. Is it any wonder, therefore, that small businesses have left the market and are turning out to be tougher to attract? While established contractors may not like new burdens, they are better able to adopt and adapt than small or new market entries.
2. Established Contractors Are the Only Ones That Can Meet the Rules: It’s not just that rules are costly for industry to implement, they limit the options available to federal buyers. Buyers must ensure that contractors comply with Section 889 Part A & B telecommunications restrictions, have proper supply chain security mechanisms, source from approved countries, have approved affirmative action plans, and meet myriad other government-only requirements. Risk-averse buyers routinely turn to companies that have experience in meeting specialized government mandates. Innovation may have its place in parts of the market, but most buying is conducted with low-risk contractors that already have experience in adapting to government-only rules.
3. A Compressed Fiscal Year: Congress did federal agencies no favors this year by essentially cutting the fiscal year in half. A shortened fiscal year means that agencies must commit a sizeable amount of money quickly. To whom do they turn? Established companies who they know have the contracts and experience to respond quickly to RFP’s and RFQ’s. There is little time this year to coach a new market entry on how to do business with the government. Real missions have to be supported and critical new projects must be launched by the end of September. Reliable, experienced partners are an obvious choice when time is tight. While there will no doubt be small business success stories this year, as there are every year, market conditions this year undeniably favor larger, traditional contractors.
Federal IT leaders say that they plan to allocate all of the remaining $756 million in the Technology Modernization Fund (TMF) by the end of the current fiscal year. That provides some good opportunities for contractors and their customers to propose projects for fund money. The administration is also asking Congress for an additional $300 million for FY’23. TMF projects are helping to modernize a variety of federal IT functions, but contractors can be forgiven if the issue of how fund money is used and the circumstances under which it has to be paid back are confusing. The TMF was originally established as a revolving fund to help agencies modernize outdated IT and then pay the fund back from resulting savings so that other agencies could then make use of the money. Inevitably, however, some agencies started pressing for access to funds for projects that could not show a discernable savings that would allow for fund reimbursement. As a result, the Biden administration relaxed TMF repayment requirements last May for projects that cut across multiple agencies or involved cybersecurity improvements. Now, contractors and their customers who want to access TMF funds not only have to create good proposals that stand out in a crowded field, but have to either specify how savings will be created to pay back the fund or create a case on why a project meets the criteria for non-payback. The entire TMF idea has never achieved broad Congressional support, either, and concerns are growing on how money is being spent. “While the law does give latitude to the projects eligible for funding, recent awards exhibit a focus on other priorities such as customer experience and cybersecurity. It’s not that those projects are not important, but they do point to a shift away from the savings-based model intended in the law,” said Representative Andy Biggs (R-AZ) in a recent hearing. All of this means that contractors need to prepare carefully for any proposal that would access TMF money. The program is highly competitive and the money can be used to do good things. Oversight and fund restrictions, however, mandate that each contractor do their homework before pursuing this route with their customer.
Most federal workers would be happy to continue working remotely, thank you very much, according to a new survey released last week by Federal News Network (FNN). Workers cite factors such as increased productivity and a feeling of security among their reasons. Indeed, some say that they can minimize “disruptions” to their workday when working remotely. Contractors can be forgiven if they feel like the last comment could apply to them sometimes. Actually speaking with a federal employee has been a very hit or miss endeavor since the pandemic. To be clear, many are happy to use virtual platforms to meet, but it’s getting to that point that can be difficult. Not being in the office makes it easier to ignore emails and, unless a contractor has the right cellphone number, office voicemail boxes can easily fill up. So much for customer experience. Potentially worse for contractors is that the FNN survey showed that most federal workers don’t believe that their senior management team took their views into account when establishing part-time office schedules. That could mean workers even less incentivized to the be in the office who could then be less open to speaking with industry. Whether federal employee or contractor, however, the willingness to go into an office and/or meet in person with people really comes down to the job a person holds. Workers on both sides can be very effective with minimal in-person interaction. Others, though, are tired of virtual meeting platforms and are anxious to return to in-person meeting, and even larger gatherings. All of this presents a maze for contractors to navigate as they prepare to enter the fourth quarter of the federal fiscal year. If one potential contact has been unresponsive despite emails and calls to the official office number, it’s time to move to the next one. Conversely, finding that prospect who’d like to meet for coffee and discuss your solution is worth getting out of bed early for and, yes, investing in a tank of inflation-grade gas. Manage your time accordingly.