The BDO GovCon Week Ahead - March 2021

March 2021

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March 29, 2021

You Can’t Spell IT Acquisition Without FAR: We’ve written previously about updates to the Buy America Act and some of the impacts of the “Ensuring the Future Is Made in All of America by All of America’s Workers” Executive Order, which include the establishment of a “Made in America Office” within the Office of Management and Budget, an increase of Federal Acquisition Regulation (FAR)-based domestic content requirements from 50 to 55%, and pricing preferences for domestic suppliers from 6 to 20% for larger businesses and from 12 to 30% for small businesses.  However, information technology (IT) has typically been spared from Buy America requirements, historically.
 
While the executive order called for a higher-level review from the FAR council on exceptions and constraints in applying Buy America to IT acquisition, the pandemic has further revealed the United States’ dependence on foreign sources for chips and semiconductors.  This reliance shouldn’t come as a surprise, as the United States’ share of this market has decreased by almost two-thirds in the last 30 years.
 
A global chip shortage impacted the availability of automobiles and consumer goods over the past year, resulting in billions in lost profits for some of the largest U.S. employers.  As a result, industry heads are encouraging the Biden administration to closely examine the IT exception to the Buy America Act, in hopes of establishing a more resilient domestic semiconductor and chip manufacturing base.

For more information, please click this link.

Potential HHS Regulatory Changes on the Horizon… But Not Until 2022: Do you contract with the Department of Health and Human Services (HHS)?  If so, we have good news for you. HHS has decided to delay until 2022 the effective date of its controversial new rule that calls for the U.S.’ preeminent health agency to review its more than 17,000 regulations. This delay is due to an ongoing lawsuit filed by several health groups aiming to eliminate the directive.
 
This controversial rule went into effect in early 2021 and calls for a sweeping review of all HHS regulations, which total in the thousands.  Under the rule, any regulation will automatically be set to expire 10 years after its release date unless HHS performs a review and determines that the regulation should be amended or rescinded.  Additionally, the new ruling would force HHS to review every current regulation that is more than 10 years old, within a five year period, a task deemed incredibly daunting for a federal agency embroiled in the ongoing COVID-19 response.  Any of the agency’s 17,000 regulations that aren’t reviewed during this five year period would expire.
 
This new rule has been met with fierce opposition from health groups, including The California Tribal Families Coalition, Santa Clara County, the Center for Science in the Public Interest and the National Association of Pediatric Nurse Practitioners, who argue this rule would require enormous time and resources to complete.  In addition, contractors in the healthcare space would need to navigate potentially hundreds, if not thousands, of revised regulations to avoid any compliance lapses.
 
For the time being, HHS has agreed to push back the new directive until 2022 as the ongoing lawsuit works through the courts.  It will be important to see how the court rules and what impact this could have on current and future contractors, if HHS goes through with the regulatory revamp.

For more information, please click this link.

Technology Modernization Fund Is Wasting No Time: Last week, we discussed the Biden administration’s emphasis on technology funding and the $1 billion appropriation to the Technology Modernization Fund (TMF).  The board that manages TMF has hit the ground running and announced one of its largest awards to date, with a $9.6 million upgrade to the Department of Labor (DOL) enterprise data infrastructure.
 
The project aims to modernize DOL’s enterprise data management and analytics capabilities, which currently face quality, consistency, and availability issues, limiting the department’s ability to effectively use its data.  “Without this funding, DOL could not accelerate development of an enterprise approach to improving data quality and expanding the number of data sets available internally and to the public,” read a statement from the TMF website.  “However, with the support of the TMF, the project can be advanced as an enterprise initiative over two years, building an essential foundation.”
 
President Biden and his cabinet have repeatedly expressed their commitment to modernizing the nation’s IT infrastructure, and this swift project approval reinforces those commitments to IT initiatives and improving services that are so critical to the American public.  “Technology is a key enabler for government in providing better services to the American public,” said David Shive, General Services Administration chief information officer and TMF Board member.  “The news of the Technology Modernization Fund getting a $1 billion boost from the American Rescue plan couldn’t have come at a better time, and the TMF Board looks forward to receiving more project proposals like this one from DOL to consider for investment.”
 
IT suppliers and service providers should continue to track the TMF and beta.SAM.gov sites for solicitations and opportunities to assist with the modernization effort.

For more information, please click this link.



March 22, 2021

Tech Funding – Major Component of the American Rescue Act: The $1.9 trillion American Rescue Act was signed into law on Thursday, March 11, 2021, with a significant portion aimed at improving the nation’s technological infrastructure.  President Biden has made it clear that IT modernization and advancement is a critical component of his administration, and this new investment further reinforces that.
 
The General Services Administration (GSA) will receive two appropriations through the relief act:  $1 billion for the Technology Modernization Fund and $150 million for its Federal Citizen Services Fund.  The Technology Modernization Fund (TMF) was first established in 2017, designed to be a self-sustaining pool from which Federal agencies can apply for loans related to technology upgrades, and the pool was only approved for a maximum of $175 million, before the passing of the American Rescue Act.  Although the bill does not specify how the funds will be allocated, the large influx of cash to the TMF will surely prompt agencies to begin looking for ways to evolve their IT infrastructure.
 
The largest single investment included in the bill includes $7.1 billion to the Emergency Connectivity Fund, which supports broadband capabilities throughout the country and provides a boost to the Labor Department’s unemployment infrastructure.
 
The Cybersecurity and Infrastructure Security Agency (CISA), which has been leading the Government’s efforts in the investigation of the SolarWinds hack that affected numerous Government agencies, will receive $650 million for cybersecurity risk mitigation.

For more information, please click this link.

Always Room for Improvement – The Supply Chain Brain Game: Supply chain specialists, listen up!  A bipartisan task force created by the House Armed Services Committee, dubbed the “Defense Critical Supply Chain Task Force,” is taking a deep dive into the United States’ massive supply chain.  The task force will explore what the nation is doing right, what weaknesses are present, and where efficiencies can be gained in the supply chain.
 
This task force was created in the wake of the glaring supply chain lapses seen at the beginning of the COVID-19 pandemic, where lack of masks and PPE threw a proverbial monkey wrench in the nation’s response.  Although the task force does not appear to be focusing on the consumer supply chain, we can hope that lessons learned and recommendations from the task force can be leveraged to avoid another toilet paper-gate.
 
The task force is placing its focus on computer chips, high-capacity batteries, minerals, pharmaceutical ingredients, and other essential raw materials and components, and leaders of the task force, including House Armed Services Committee Chairman Adam Smith, Rep. Elissa Slotkin, and Rep. Mike Gallagher, have noted that they would like to see the manufacturing of these essential components and raw materials come back to the U.S.  While that is not always feasible, the leaders of the task force have reiterated the importance of creating backup plans, in case a relationship with a supplier or vendor turns sour.
 
What does all this mean for contractors?  Slotkin has stated that the task force would like to work collaboratively with companies and reward them for working with the United States.  Additionally, Slotkin noted that they do not want to force companies to work for US interests.  It is not clear what rewards Slotkin is referring to, but current and prospective contractors should keep an eye out.
 
In advance of the 2022 NDAA, the task force is expected to make its official recommendations in the coming three months.

For more information, please click this link

BDO Named Customer Satisfaction Partner of the Year: In 1965, Mick Jagger was so frustrated with the state of the world, that he wrote the anthemic “I Can’t Get No (Satisfaction)”.  Fast forward 55 years to 2020, and the state of the world was still frustrating to many, but customer satisfaction is a top priority for BDO.
 
This commitment was recently recognized in The Deltek Global Partner Awards Program, where BDO was named the Customer Satisfaction Partner of the Year for 2020.  Jonathan Eisner, Deltek VP of Global Partner Sales and Alliances, added, “2020 has been a year like no other and Deltek’s deep partner network enabled thousands of customers to quickly pivot and strengthen their businesses during these uncertain times.  It is an honor to recognize these outstanding achievements and innovation of these partners.”
 
Deltek’s partners assist companies in further customizing their project intelligence experience, enabling them to make more informed decisions about their business and to manage their projects in a collaborative, end-to-end platform, and BDO is honored to be recognized as a partner whose customers don’t have to try, and try, and try.

For more information, please click this link



March 15, 2021

Bridging the Data-Sharing Divide: Whether you love it or hate it, working from home has become the norm during the COVID-19 pandemic.  Although it has been a common mantra that one day we will be back to normal, U.S. health agencies, including the Department of Health and Human Services (HHS), the Department of Veterans Affairs (VA) and Defense Health Agency (DHA), say maybe not so fast.  Being required to work from home has enacted big positive changes across the U.S. health agencies and many of these changes are here to stay.
 
As Federal health agency employees have continued to work from home, long-running data-sharing barriers between HHS and its numerous other agency partners have eroded out of necessity.  Since these employees are all working remote and supporting the nation’s COVID-19 response, there is a need for better collaboration between HHS and other Federal, state, and local health agencies.
 
To bridge the data-sharing divide, HHS, its partners at the VA, DHA, and state and local health agencies continue to invest in cloud computing, IT modernization initiatives, and other data-sharing programs.  Now that these systems and relationships are in place and continue to advance, HHS says there is no going back to the “old ways” where U.S. health agencies worked less collaboratively, and this new-fangled cohesion will only increase going forward.
 
This presents an incredible opportunity for current and prospective contractors in the IT, cloud computing, and data-sharing sectors.  As HHS continues to work toward cohesion between it and other health agencies, it can be expected that agencies at the Federal and state level will require short- and long-term support from the contracting community to build out and maintain new IT initiatives.  Additionally, other Federal, state, and local agencies across the spectrum of services may consider investing more heavily in similar data-sharing initiatives.
 
As the Government’s workforce continues to work remotely and teleworking options are likely here to stay, contractors should keep an eye out for Federal, state, and local opportunities to help bridge the inter-agency data-sharing divide.

For more information, please click this link.

Zero out of Five, Would Not Recommend: It’s no secret that the Government heavily relies on contractors to provide goods and services, but how can they continue to motivate contractors to perform at a high level, when they are also being stretched thin?  Some feel that the answer may already exist in the Contractor Performance Assessment Reporting System (CPARS).  Often viewed in the same vein as grade school report cards, Yelp restaurant reviews, and Amazon product reviews, CPARS ratings are only worth the amount of the time and effort that the Government reviewer and contractor put into them.
 
Research has found that the bulk of contractor ratings hover around the satisfactory/average range, as rating the contractor’s performance higher or lower than that would require additional work to substantiate that rating.  The Office of Federal Procurement Policy (OFPP), Department of Homeland Security (DHS), General Services Administration (GSA), and other Federal agencies are looking at ways to change this mindset.
 
Some of the proposed ideas to get more value from CPARS are contractor mid-term and final self-assessments with feedback from the Government’s rating official and agencies finding more efficient ways to review contractors’ ratings contained in CPARS prior to making awards.  Ultimately, value will be measured by fair, yet accurate ratings and a less burdensome method for Government officials to provide their input.  Under these circumstances, the Government is hopeful that contractors will be incentivized to perform to the best of their abilities throughout the life of the contract, with a rating system that reflects that, and the Government will have a tool that facilitates that process, instead of just another administrative box to check at the end of a contract.

For more information, please click this link.

Cyber-Secure the Bag: The Department of Homeland Security (DHS) is looking to revamp its compensation structure for cyber security professionals, according to a draft request for proposal (RFP) issued on Thursday, March 4, 2021.  The agency is launching a Cybersecurity Talent Management System (CTMS), which was described as “a cross-component effort to implement a new cybersecurity-focused Federal civilian personnel system”, with a key focus area of the initiative being the restructuring of its compensation model.
 
The new compensation model is called the Strategic Cybersecurity Compensation System, which outlines a set of policies and procedures with the goal of attracting top cybersecurity talent through more competitive compensation.  During the design process of the initiative, DHS revisited some of the foundational, yet outdated theories, models, and processes that have been followed for decades.  Not only is DHS looking to develop a new compensation structure that will help attract top cybersecurity talent, but also one that adheres to Federal regulations.
 
As DHS looks to restructure some of the current model(s), they are looking for a vendor to help develop the “business rules, process and policies” around this system, and the resulting contract is expected to run for a one-year base period, with four one-year options.  DHS expects to release the final solicitation by March 16, with a multi-phase bid process culminating in a single award on April 29.

For more information, please click this link.


 

March 8, 2021

Who Are You? Who? Who? In May, the entity registration functionality will be migrated from the current System for Award Management (SAM) website to beta.SAM.gov, as the General Services Administration (GSA), consolidates its procurement tools and sites into one site.  Along with the migration, GSA will also be implementing additional security measures.

While these security measures will be voluntary at first, they are slated to become mandatory in the fall, and will require further identity verification steps from certain contractor employees.  Each entity administrator, the individual responsible for verifying information and renewing the representations and certifications in SAM.gov, will have to provide their Social Security number, a copy of their driver’s license, and a verifiable phone number.

Previously, contractors were asked to provide a notarized letter appointing a single entity administrator, and these extra steps are intended to provide additional protection for sensitive company data.  By verifying the entity administrators’ identities, GSA is acting as a good steward, helping to keep sensitive information out of the wrong hands.

For more information, please click this link.

Second Time’s the Charm: On Tuesday, Feb. 23, 2021, the GSA announced it has re-awarded the first slate of awards on the Second Generation Information Technology (2GIT) blanket purchase agreement.  The announcement comes after the original award was pulled back last year after several companies filed protests.  The $5.5 billion 2GIT contract provides access to pre-vetted hardware and software IT vendors, replacing older in-house platforms within some federal agencies.
 
The contract was awarded to 79 vendors, over 70% of which are small businesses.  The award included nine vendors who were not on the original contract, as well as five vendors that were removed and not included in the new award.  The contract vehicle was originally built for Air Force customers, but it is available to all federal buyers. “2GIT will deliver great value across the federal government,” GSA Assistant Commissioner of Information Technology Category, Laura Stanton, stated.  “It serves as an example of GSA developing IT solutions that cater to agencies’ current and future requirements with supply chain risk management as a key feature.”

For more information, please click this link.

Big Bucks Expected for American Businesses & Individuals: While most Americans were sleeping during the early hours of late February Saturday, the House of Representatives voted to approve President Biden’s flagship $1.9 trillion-dollar COVID-19 aid package.  As expected, the stimulus bill was approved along party lines, 219-212, with two Democrats breaking ranks to vote against the bill, while no Republicans in the House gave the bill their seal of approval.  The bill then made its way to the Senate where it is expected that certain provisions, especially the $15 minimum wage proposal, will be changed or removed.
 
This package includes measures to provide support for individuals, families and businesses alike. Some of its key benefits include:

  1. A direct payment up to $1,400 to individuals making less than $100,000 a year and up to $1,400 per person for families earning below $200,000 per year.  Individuals earning less than $75,000 will receive the full $1,400, while this amount will begin to decrease for those making above $75,000 and will phase out completely at $100,000.
  2. An additional $15 billion to the Emergency Injury Disaster Loan program for long-term, low-interest loans from the Small Business Administration.  Small businesses that have been severely impacted by the pandemic that have fewer than 10 workers will be given priority.  The bill also will provide $25 billion for a new grant program designed to help the struggling bar and restaurant industry.  Eligible bars or restaurants could receive up to $10 million and can use that money for expenses like rent or mortgage, payroll, utilities, food and beverages.  In addition to these funds, the wildly popular Paycheck Protection Program would receive an additional $7 billion and make more nonprofit organizations eligible.
  3. An additional $400 federal weekly boost to unemployed Americans’ weekly unemployment benefits running through Aug. 29.

The additional support going to millions of American families and businesses.

For more information, please click this link



March 1, 2021

Sharing (Information) is Caring: While answers to questions surrounding the Solar Winds hacking campaign may be months away, the Biden administration has plans to issue an executive order in response to the hack.  Anne Neuberger, the deputy national security advisor for cyber and emerging technology, shared the administration’s plans to “build back better” in response to the incident.  The plan calls for a structural modernization of Federal IT and cybersecurity networks, as well as, greater domestic visibility and information sharing between the public and private sectors.

Neuberger emphasized the challenges associated with the United States’ value on both privacy and security, “There are legal barriers and disincentives to the private sector sharing information with the Government, that is something we need to overcome,” she said. “Even within Federal networks, a culture and authorities inhibit visibility, which is something we need to address.”

The executive order may also have an impact on future contracts between Federal agencies and their vendors.  During a hearing before the House Homeland Security Committee, the former director of the Cybersecurity and Infrastructure Security Agency (CISA) highlighted that current Federal contract language prohibits CISA from accessing information related to cyber incidents and suggested a change to future contract language to allow CISA access to such information.

For more information, please click this link.

There’s Always a Catch: The Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Families First Coronavirus Response Act (FFCRA) and the Small Business Act all provided contractors with different paths to seek financial relief during the pandemic.  Now that the proverbial dust is starting to settle, the Defense Contract Audit Agency (DCAA) and other Federal audit agencies are releasing guidance on how benefits received under these programs will impact billings and proposals.

In late January, DCAA issued a revised Memorandum for Regional Directors and some Frequently Asked Questions (FAQs) on the treatment of Payroll Protection Program loans, loan forgiveness, and subsequent credits to the Government.  The guidance provided to DCAA auditors is simple… it depends.

Auditors are expected to be familiar with the COVID-19 legislation and regulations and the different scenarios that they may see in a contractor’s records.  Government contractors should be doing the same, as they are expected to account for loan forgiveness credits appropriately and timely, and they will likely be asked to trace and support how relief funds were spent.

For more information, please click this link.

There is Nothing Artificial About Upcoming AI Funding: Are you a contractor or prospective contractor, working in the artificial intelligence (AI) space?  If so, listen up.  A Congressional panel created to study AI’s impact on national security has published a draft version of its final report urging Congress and the Biden administration to double down on AI research and development (R&D) funding.  Specifically, this draft report recommends Congress double federal funding for AI R&D efforts every year, until it reaches $32 billion in fiscal year 2026.  In addition to this recommendation, the report urges the intelligence community to work collaboratively in an effort to reach enterprise-wide AI proficiency by the year 2025 and sets a goal for the Department of Defense (DoD) to invest ~3% of its total budget to AI R&D efforts.
 
To achieve these lofty goals, the report suggests instituting department-wide trainings and education along with shared access to AI software models.  Additionally, the draft report recommends that the Office of the Director of National Intelligence (ODNI) and the DoD create a task-force, dubbed the red team, that is dedicated to identifying and mitigating potential threats to AI systems and advised the ODNI to create an AI integration team in conjunction with the DoD that is focused on sharing AI methods and data.
 
This finalized report is expected to be issued to Congress by the commission on March 1.
 
As cyber and other technology-based attacks continue to present a clear and imminent threat, Congress and the DoD are taking steps to expand support for AI technology in the name of national security.  It will be interesting to see what additional information and suggestions present themselves in the commission’s final report, so stay tuned.

For more information, please click this link.