The FAR Council has already issued one
clarification to its initial Interim Rule prohibiting companies that do
business with the government from using covered IT and telecommunications
anywhere in their business. The new rule, published in late August,
clarifies that companies certifying that they do not use such covered
equipment must only do so on an annual basis, not in response to each
bid. More guidance is expected to
come. Contractors should not confuse
this guidance, though, with a removal of the requirement to get rid of or not acquire
covered IT and telecommunications gear from a host of Chinese companies. Companies are absolutely expected to comply
with the requirement. No Huawei,
ZTE or other related equipment can be used by companies wishing to do business
with the government, regardless of whether that equipment is used in support of
the execution of a government contract.
Be on the lookout, though, for more regulatory changes on this topic.
There are just over three weeks left in FY’20. There will be business right up until the last minute this year. Here are three things your company should focus on now to finish strong:
1. Be The Easiest-To-Use Solution: Make sure your customers know that you’re ready to work with them to help with a Schedule buy, small business set-aside (where applicable), sole-source justification, or are even staying open on weekends to take their call. Be the problem solver and trusted partner. Don’t over-promise, but make sure your customer knows you are with them.
2. Communicate With Partners: Just as you should not assume that your federal customer knows how to buy from you, you should not assume that your industry partners remember you. If you haven’t checked in with them this month, do it today. One company we know recently followed this advice and now has several more projects in their pipeline. Your partners have lots of companies that want to do business with them. Make sure they remember you and how well you can work together.
3. Be Careful Who You Partner With: A new opportunity that you haven’t been tracking that suddenly drops into your lap from a company you haven’t worked with could be promising, or it could be trouble. Scammers, or less-than-scrupulous companies, come of out the woodwork when there is so much potential business to be had in a compressed time frame. Don’t risk your company’s reputation. Pick your partners wisely and vet them properly. Bluebirds are great, so long as they don’t fly into your windshield.
Remember, also, that there is plenty of business that gets done on October 1st in the form of renewals, leases, rentals, etc. The new year will start under a CR. Rest then, business now.
Federal investigators may need new
authorities to probe cybersecurity breaches in sensitive non-government networks,
according to a recently-released unclassified report from the Senate Intelligence
Committee and originally reported on FCW.com. Though the report dealt primarily with
security issues in elections, recommended remedies may not be restricted to entities
in that field. The report, for
example, calls for the FBI’s Cyber Division to develop policies to
“pressure” victims of hacking to cooperate with federal
investigators. While the most severe
consequences, the potential use of compulsory cooperation, are reserved for
election-related breaches, that distinction by no means excludes government
contractors or others whose sensitive data systems may have been hacked from
being “encouraged” to cooperate with the FBI under other circumstances. Cooperation would extend, also, to
third-party companies hired by hacked entities to conduct incident response. Contractors should pay close attention
to this report, just one in a series of Senate Intelligence Committee
reports where recommendations may find their way into legislation. While companies involved in elections may be
initial targets, they are likely not the only ones that could ultimately be
covered. Securing your network,
purging covered equipment, and reporting breaches all place different kinds of
costs on contractor operations.
Understanding those costs are critical to successfully
navigating the waters of the federal market.
Federal government use of small businesses
continues to increase with 2019 marking the seventh straight year that agencies
exceeded small business contracting goals. Nearly $133 billion in contract dollars were
obligated to small firms in FY’19, an increase of $12 billion from FY’18. That’s good enough to beat the 23% small
business contract goal by 3.5%. While there are many reasons why small business
use numbers continue to increase, one is the speed and ease of use small
business acquisitions offer to over-worked acquisition professionals. This can be especially important at this time
of year when there are many procurement actions to be taken in a limited amount
of time. Over 10.25% of small
business dollars, for example, went to disadvantaged businesses last year, an
area where streamlined acquisition methods predominate.
These numbers, however, don’t tell the entire story. There are definitely winners and losers in the
small business contracting arena.
Previous news stories have stated that thousands of small businesses
leave the government market each year, likely due to new and costly rules. This year alone small business prime
contractors are having to accommodate Cyber Maturity Model Certification (CMMC)
requirements and review IT and telecommunications assets to ensure that
prohibited sources aren’t used. This may
be one reason why the newly-released small business subcontracting numbers show
an uneven story. Only the overall goal
and the women-owned subcontracting goal were met. New requirements continue to impact
smaller small businesses, while larger small firms, especially those dedicated
to federal business, are better able to absorb the costs.
Some Schedule contracts may one-day not have
contract-level pricing due to a move initiated by the
General Services Administration recently that may culminate in the agency using
authority given to it by Congress as part of the FY’19 Defense Authorization
Act to establish Schedule contracts that leave price discussions to contractors
and their customers. The recent issuance of an Advanced Notice of Proposed
Rulemaking (ANPR) is the first step in setting up a possible pilot
project. The ANPR asks for comments on a
host of issues, including whether task order type makes a difference, the type
and breadth of professional services that could be part of the program, potential
GSAR changes, and more. The concept of a
non-priced GSA Schedule contract has been discussed for nearly 30 years. It would potentially eliminate the Schedules
Price Reduction Clause as well as hourly labor rates now listed for an
array of professional services.
While this initiative is likely
to be popular with industry, contractors and GSA may have to work with
customer agencies to provide assurance that Schedule contracts still offer a
streamlined acquisition process and competitive pricing at the task order level. Comments on the ANPR are due to GSA September
18th. Companies are
strongly encouraged to comment.
See the link here for the ANPR, what GSA is asking for comments on, and
how to submit comments: https://www.federalregister.gov/documents/2020/08/19/2020-16681/general-services-administration-acquisition-regulation-gsar-increasing-order-level-competition-for