The BDO GovCon Week Ahead - January 2020

January 2020

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January 27, 2020

Is Impeachment Slowing the Course of Federal Business? The impeachment trial for President Trump began in the Senate last week, playing to headlines in the national media. Previously, the House of Representatives was centerstage on deciding whether to make their charges formal. Impeachment proceedings don’t come along every day. Considerable national attention can be focused on such activities. Do they distract federal agencies from the normal pace of business? The short answer is no. Federal agencies continue to meet their missions and conduct regular business, even while national headlines may make it seem like Washington, D.C. is talking about nothing else. Federal agencies all have their Fiscal Year 2020 appropriations. There are management objectives to meet. Even if the President is found guilty in the Senate, the net impact on executive branch operations should be minimal. Distractions that slow the pace of the government market tend to be closer to home. The prospect of an agency closure or not getting paid are definite distractions. The departure of administration appointees is happening soon, which consistently slows the pace of business, especially business related to innovative or new concepts. Departing appointees and the emergence of more feds in an “acting” capacity, typically takes an agency from fifth to fourth gear. The impeachment phenomena may make for good news headlines, but it’s likely not responsible for any downturn your company might see in its federal sales.
 
Networking Remains Critical as Federal CXOs Play Musical Chairs: Key federal IT officials at the Departments of Agriculture, Commerce, and HHS are either retiring or changing jobs. The General Services Administration (GSA) is re-shuffling the deck, also. Over the next few months, political appointees will begin leaving as well. These changes make it difficult for a contractor to maintain relationships in critical agencies. While it’s true that sometimes a good customer at one agency may move to another, creating an opportunity for you in a new place, there may be a gap at the old agency they left behind. Constant change is just one reason continuous networking is a common trait of successful government contractors. Events take place throughout the year, even in traditionally slower periods like August. Upcoming federal events include FCW’s Fed 100 gala, a critical IT networking opportunity on March 19th, and GSA’s FAST 2020 conference in April. In addition, associations such as AFCEA, the Professional Services Council and Coalition for Government Procurement all have breakfasts, seminars, or other meetings where you can meet government officials, hear about what their challenges are, and connect with partners. Industry and government connections made now can pay off later in the fiscal year. These connections can help you drive business for your company, and help you grow in your own federal business career. See the story on the changing faces in federal IT here.
 
How Do Contractors Manage “Zero Trust” Cyber Approach with “Default to Truth” reality? The term Zero Trust is frequently heard in concert with the development of secure systems. Forrester Research defined this as having “robust detection and incident response capabilities” to protect vital assets. This methodology goes further than that, though. Truly secure system solutions must include who has access to an agency’s IT network, and how they will use that access. No matter how good the detection, systems will always be at risk for being compromised by people who visit the wrong website or download the wrong attachment. It’s not just a case of “them” vs. us. We all have the potential to be a security risk. Yet, we are wired to trust others. In his most recent book, Talking to Strangers, Malcolm Gladwell points out over and over how, even in the face of mounting evidence, we trust people who we should not. This isn’t just a philosophical point. As contractors invest in Cyber Maturity Model Certification, it is critical to consider the risks caused by careless or untrained workers. Limiting access to certain sites, random monitoring, and frequent training are all parts of a system that can mitigate cyber risk from users. Further, as Gladwell’s book makes clear, even senior people in an organization must be monitored. Common “it could never be them” default mentalities must be changed. As companies look to build internal systems, and offer secure solutions to federal clients, the personnel element of security must be an essential part. Read the article here for more on Zero Trust
 



January 20, 2020

Even Acquisition Officials are Focused on New Security Requirements: Supply chain security and contractor cyber certification are taking up an increasing amount of the GSA’s acquisition staff time. This is yet another sign that commercial item contractors are moving into a time where more government-unique requirements are being imposed as a price of doing federal business. Acquisition officials are looking for ways to verify that contractors meet applicable standards and what it means for key programs such as the GSA Schedule, Alliant, OASIS, and even contracts like 8(a) STARS and VETS as small businesses will have to meet the same requirements as larger companies.  Secure supply chain standards examine multiple layers of a company’s operation, including subcontractors, suppliers, and partners. Cyber requirements, expected out at the end of the month for DOD acquisitions, mandate that companies take specific steps to meet one of five rankings, with a three thought to the baseline requirement for prime contractors. Similar standards are in development for civilian agencies. The fact that acquisition professionals in the government are focusing on these compliance areas should speak volumes to contractors.  Instead of working on new programs or tweaking existing contracts to improve service, acquisition staff are focused on compliance, and your company must be as well. If the terms “CMMC” or “Section 889 Part B” don’t mean anything to you, they should. Your firm will be required to invest in certifications and scrutinize all business partner relationships. The alternative is to forego the government market. To get just a glimpse of part of what’s in store and why it needs to be a focus in your company, see the story here.

DoD Secretary Issues Further Instructions to Cut Low Priority Spending: Secretary of Defense Mark Esper sent a memo to department leaders on Monday providing the outlines of a reform agenda that he expects the Department to pursue in 2020. This is a follow up from a defense-wide review conducted last year that identified $5 billion in planned savings. This next round will drill down into the spending practices of a wide variety of DoD organizations, from defense agencies to combat commands, and even to the military services themselves. Defense activities and field operations are among priority areas for a review. Esper’s memo calls on the secretaries and uniformed chiefs of the military services to conduct clean sheet reviews of their spending and come up with detailed reform plans based on the results. Contractors should work closely with their DoD customers to validate the importance and priority of work being done under their contracts. Contractor-provided rationale could not only protect important business, but strengthen relationship between contractor and customer. Esper’s memo helps by identifying specific functions that will come under scrutiny. “…reforming business processes, overseeing resource planning and allocation, and evaluating each organization’s performance against business goals” are the chief focus areas.  Work will be headed by the DoD Chief Management Officer, but Esper will also be personally involved, as he was when he led a similar action in the Army. Read the article here for more information.
 
Amazon Effort to Stop JEDI Task Orders Underscores Importance of Timely Protests: Amazon Web Services (AWS) filed a status update last week as part of its JEDI protest indicating that it will file a motion later this month seeking to stop task orders from being issued under the DoD JEDI contract for cloud solutions. It is unclear why AWS did not seek a stop work request with its original protest, but the fact that they didn’t gives us the opportunity to educate our readers. Protests, whether filed at the Court of Federal Claims, like the AWS protest, or GAO don’t always stop work on the acquisition being protested by themselves. Protestors must specifically request that work be stopped. At GAO such a request must be part of a protest that is filed within five days of the time the unsuccessful offeror knew, or should have known, of the identified acquisition action. Waiting until the tenth day, the last on which a GAO protest can be filed and still be considered timely, very likely will result in work not being stopped. Even if the protest ends up being sustained, the protesting contractor gets no relief, other than the knowledge that it was right. Even experienced contractors can sometimes go back and forth multiple times on whether to file a protest. This is not a situation where waiting makes things better. The outcome of AWS’ motion, not expected to be officially filed until January 24th, is unknown. What is known is that the company will likely have to pay more in legal fees as it tries to seek an injunction.  This is a luxury few contractors can afford. Deciding on a stop work request is an issue that should be considered any time your company considers a protest.  See the AWS story here.
 



January 13, 2020

Does MAS Refresh End Contractor Ability to Buy from Schedule Contracts?  One change made by the General Services Administration (GSA) in its recent update of the consolidated Multiple Award Schedule solicitation is causing confusion for both GSA and contractors. There is no need for panic. The ability for a government contractor to buy from a Schedule contract in support of the fulfillment of its own federal contract remains the same. While the refresh eliminated the FAR 51 deviation that had previously been used to place such orders, the FAR itself, was previously updated to add FAR 51.03. This provision provides the same authority for contractors to place Schedule orders and makes it permanent so that no deviation is needed. Schedule contractors that accept orders from other contractors that want to buy from their contract must have a letter from an authorized government contracting officer allowing the buyer to make the purchase. Failure to obtain such a letter could have contract compliance ramifications for Schedule contractors. The order is treated just like any other Schedule order, is recorded as a Schedule buy, and the Industrial Funding Fee must be paid on it, just as with any other Schedule order. Here is a link to the permanent language.
 
Do You Know How Your Customers Buy What You’re Selling? Federal business success isn’t just about having the best, or most competitive solution. It is often just as important to know how your customer buys what you would like to sell. The new solution your company just came out with? Make sure you know how federal customers want to buy services if you want to truly dominate your market segment. This is becoming more and more important as the Office of Management and Budget (OMB) directs agencies to increasingly buy from Best in Class (BIC), or other established contracts. The federal business door may not be completely closed to you if your technology isn’t on one of those contracts, but it’s not exactly wide open, either. Selling cloud services? DOD is moving to increasingly use the JEDI and DISA DEOS contracts. Laptops and desktops? The preferred contracts for those are NASA SEWP, the GSA Schedule, and NIH’s CIOSP III.  There are even preferred contracts for furniture, pharmaceuticals, and office equipment. Market research is important to determine how federal agencies buy your services before you make a list of the top 10 federal agency targets you would like to call on. This can be difficult for a newer market entry to understand but proceeding without proper research is like taking a “Ready, Fire, Aim” approach. You will waste your time and those of potential clients, leading to frustration on both sides. Make sure your firm does its homework on what motivates the organization to purchase a service. If your technology is truly great, the “what” will take care of itself.
 
Suspension Doesn’t Only Mean Loss of Federal Business: Companies participating in the public sector market may not always have the federal government as their largest public sector customer. Some companies find that their largest public sector clients are state, or even local, governments. It is important to remember that violations on a federal contract can have serious implications for all your company’s public sector business. Even if the amount of federal business is small in terms of your firm’s overall sales, it is vital to understand the terms of each federal contract and help ensure that proper compliance systems are in place. Your federal business may not look small to federal contract compliance officials. In addition to fines and penalties, companies that violate the terms of their federal contract can find themselves in front of a suspension or debarment official. A negative outcome puts your state and local government business at risk. Almost all states use the federal suspension and debarment list to determine whether a company is eligible for an award. If your firm is on the list, it will essentially be banned from any new business with state and local governments that use the list. In addition, competing companies have also been known to tell state and local officials when an incumbent has landed on the list. This could jeopardize existing business. The subcontractor route is also closed to you as well, as at least prime contractors at the federal level are forbidden from doing business with suspended or debarred companies. It is a definite best practice to ensure good compliance with all public sector contracts. While they may have different terms, most are united in refusing to do business with a suspended or debarred company.
 
Space Force Pursuing Space Age Acquisition Methods: The brand-new Space Force is holding its first pitch day at Patrick Air Force Base in Florida on March 4. And while it wants to hear about “innovative solutions” to several problem areas around installation support and space operations, this event also plans to use innovative acquisition methods to obtain those solutions. Space Force will use its Commercial Solutions Opening (CSO) authority to obtain desired solutions in the hopes of moving quickly and attracting innovative solutions from traditional, or especially non-traditional, companies. CSO authority is similar to Other Transaction Authority (OTA). CSO acquisitions are not FAR-based, are intended to be used for prototyping, and use incremental funding to move a project through four phases of development. Pitch days are becoming an increasingly popular method inside DOD to attract non-traditional companies. The Air Force and Army have used such days, often coupled with non-standard acquisition methods, over the past year or so with good results. Whether or not a company is truly new usually does not matter, making such days a great opportunity to get in front of prospective buyers if there is a match between the focus of the pitch day and what a company would like to offer. The March 4th pitch day notice offers a list of specific areas the branch wants to hear pitches for, as well as a general call for any interesting ideas, which can be referred to as the unknown-unknown.  See the article here for more