ALLEN FEDERAL BUSINESS PARTNERS

In this stressful time it seems like everyone could use a sanity check.  This could even apply to your contracts.  Allen Federal is happy to review your commercial item contracts and task orders to make sure they say what you think they do and to recommend changes if they don’t.  Our 30 years of experience has proven that even experienced firms benefit from an outside set of eyes now and then.  Contact us today at info@allenfederal.com and we’ll set up a review that fits your needs at a competitive price.

Federal agencies could spend as much as $630 billion in discretionary money in FY’20, up over $30 billion from the record-breaking performance of FY’19.  Discretionary spending includes the acquisition of commercial services, products, and solutions.  Almost $200 billion of the total figure had yet to be obligated as of August 5^th, according to research from Bloomberg Government.  NextGov reports, “(t)he government’s discretionary spending has increased significantly since 2015, driven largely by the Defense Department. Discretionary spending at the Army, Navy and Air Force each jumped approximately 10% in fiscal 2019.”  In addition, Bloomberg expects a significant uptick in IT and telecom spending, particularly in such areas as networking capacity, bandwidth and telework services. Bloomberg previously reported that professional services and IT spending, in that order, would be among the two highest spend areas.  All of this adds up to unprecedented opportunities for contractors.  There should be multiple opportunities for well-prepared contractors to create new business.  Adding money onto existing projects could be a potential discussion topic with current clients as well.  It wasn’t that long ago that discretionary spending dipped under the $500 billion mark.  It will almost certainly contract in future years.  Locking in business now is essential to long-term success.  FY’21 is also likely to operate under a CR until at least December.  Close business now and rest when the leaves turn.

The Department of Defense needs help in managing its IT portfolio and can improve its transparency and risk management.  NASA, Transportation, and Treasury also need help in that area.  These are among the findings of the recently-published 10^th FITARA report card (https://federalnewsnetwork.com/wp-content/uploads/2020/08/fitara-Scorecard-10-USAID-corrected.pdf).  Once viewed unevenly across the federal IT community, FITARA compliance is now mandated by OMB and is the subject of regular Congressional oversight.  Contractors probably know that, as a result, FITARA comes up a lot more in business and agency management discussions than was once the case.  While federal agencies are making overall progress in meeting their FITARA requirements, there are still specific areas where companies can help.  One such area is “Agency CIO Authority Enhancements”.  DOD, DHS, and NASA are three agencies that received an “F” in that category, indicating that they might be open to help from contractors that can provide a strategic analysis of the CIO’s role and how it is integrated into overall agency management.  To put it mildly, not all CIO designations carry the same weight.  Where are agencies doing well?  Both GSA and USAID received an overall “A” grade.  All agencies except OPM received an “A” grade for their management of software licensing.  Still, there is plenty of intelligence to be gathered from the latest report card on where agencies fall short in IT management and, by extension, where contractors might be able to find opportunities.

The busy federal buying season also corresponds with an increase in acquisition-related protests.  Protests are a fact of life in government procurement and we believe that companies do themselves a great disservice if they adopt “no protest” policies.  Indeed, we are happy to have a deeper discussion on why outside of the newsletter.  Before a company protests, though, it is absolutely essential to know the answer to this question: “What do I want to happen?”.  This may seem obvious, but consider just the latest example of where it wasn’t.  It’s a safe bet that none of the small businesses that had invested hundreds of thousands of dollars in Alliant II SB wanted the procurement to be cancelled.  Staff time, proposal writers, business consultants, lawyers, etc. all were deployed with the expectation that there would be business through Alliant II SB.  Back in the dark ages we had the chance to sit in on oral arguments before the US Court of Appeals for the Federal Circuit, sometimes known as the “junior Supreme Court”, on the Best Power contract case.  The lawyer for Best was prepared for everything related to the contract.  He was not prepared for the question from one of the judges, “What is it that you want?”  The lawyer stammered.  There was an awkward silence.  Finally, the judge answered his own question, “Do you want attorney’s fees?”. A perceptible groan came from the gallery as the lawyer quietly affirmed that, yes, he would like fees.  Not one of the best moments from the annals of federal contract law and, unsurprisingly, the Court found a way to punt on the case.  The bottom line is that it is ok to protest when you have a legitimate reason to do so, but you need to answer the “What do I want?” question first.  Losing your investment in a huge IDIQ contract and ensuring that your lawyer gets paid probably aren’t at the top of the list.

Contractors eying potential opportunities in a new round of COVID-19 relief funding may want to focus elsewhere.  House and Senate negotiators are reportedly wide apart on the specifics of any “Phase IV” relief package. A self-imposed deadline of July 31^st is rapidly approaching.  What that means for the long-term is unclear as self-set deadlines can always be extended.  In the interim, however, some benefits and money will expire without a short-term extension, something that even itself seems to be doubtful. The shape of any long-term deal is also uncertain.  Money for unrelated projects, such as the building of a new FBI Headquarters, has drawn sharp disapproval from Senate Republicans, making the passage of anything not directly tied to COVID-19 problematic.  Even there, however, discussions are at an impasse.  It is also worth remembering that House leaders have previously said that there will not be additional funds for defense contractors to pay for previously-authorized CARE Act expenses.Contractors should instead focus on already-identified money and opportunities in their pipelines.  Congress may very well decide to pass some sort of relief measure at the last second (either before the August recess or closer to the Fall elections), but that should not be a distraction from a company’s core business, especially during the end of the year.  Appropriations will also be late this year, so prepare to start FY’21 under a Continuing Resolution until sometime after the November election.