It’s taken a couple of weeks, but the White House and various agencies have more or less come up with policies for contractors trying to support the government during the virus crisis. Retooling or extending existing contracts, keeping skilled people mobile-ready, and invoking the Stafford Act for emergency procurement are all in there from guidance issued at the end of last week. For industry reaction, the Federal Drive with Tom Temin spoke to the CEO of the Professional Services Council, David Berteau.
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Tom Temin: David, you had written only days earlier to OPM saying, hey, guys you gotta look after contractors and two days later they did.
David Berteau: Right. Tom and we had a great concern at PSC for not only our member companies, but all contractor. You know, the most important thing in this, from the point of view of governing, is to keep the government working. And I think it’s not only to keep the government working in the areas that are important in the response to the coronavirus, but it’s also keep the government working and everything else that matters to America and to the American economy and the American people. Contractors, as you know, play vital roles in all of those missions and functions across the federal government in every agency. So are concerns were to fold them. One is, how
do you keep the government working? And in order to do that, you have to keep the contractors working. Well, How do you keep the contractors working? You have to change the way you look at how that contract is managed for the federal government to send out guidance for federal civilians or uniformed personnel. It’s pretty easy. You know who the central authority is. They put out the regulation, that regulation gets promulgated. There’s a system for doing that. Contractors are managed both at the top in terms of overall guidance, the federal acquisition regulations, guidance memorandum of various sorts, supplements — but also at the contract by contract level. So what was really needed here, what was missing, was clear guidance to the contracting officers, both for their authorities that we of course want them to have because the contracting officers are in there performances are the core of our contracting process, our procurement process, but also the contracting officers responsibilities to make sure that the government keeps working and that the contractors keep working and keep getting paid. It’s good for the government It’s good for the country. It’s good for the economy.
Tom Temin: That OMB memo that came out Friday. Does that seem to go far enough in giving contractors the guidance you think they need?
David Berteau: It certainly has the opportunity there. It doesn’t mandate exactly what a contracting officer should do, but it covers all the areas that contracting officers need to consider. And it lays out what those considerations ought to be. For instance, one important function is the president has urged contractor government employees to tell a work wherever possible, and you’ve seen this begin to take place not only here in Washington and in Washington D.C. area, but across the country. But for many contractors, teleworking was not authorized in their contracts. So the president’s guidance doesn’t really mandate what this does is. It urges agencies to work with their contractors to evaluate and maximize telework for contract employees wherever possible. That was the intent of our letter was to do that, but the memo does a lot more than that and I would be happy to expand on those.
Tom Temin: Well, one of the things I noticed in the memo was invoking the Stafford Act for emergency procurement. Tell us more about that one.
David Berteau: It does — so one of the important thing is not only to keep the work going, but you know, part of keeping that work going is a steady pace of new procurements. Existing contracts that may have a period of performance that is ending, may have an option that needs to be exercised, new competitions underway, there’s recompetes under way. And so the memo does a couple of things to allow the government to expand its capability to keep new work coming as well. First, it provides flexibility in extending existing performance dates and based on the interruptions from the disease. Secondly, it allows agencies, or encourages agencies to leverage all the special emergency procurement authorities that exist in place today and saysthat has basically the acquisition workforce should feel fully empowered to use all the acquisition flexibilities as needed to respond to the national emergency by keeping the government going. The memo goes on, of course, is posted on the White House website. It’s also posted on PSC’s website. It goes on to have page after page of frequently asked questions that amplifies and clarifies this. What our members are already doing is they’re able to take this memorandum and you know this Tom, not everybody wakes up in the morning and thinks is there a new memo from OMB, right, and so we help promulgate this memo now that it’s been issued by making sure that our companies themselves have the memorandum and they can bring them to the attention of the programs and contracting officers and contracting officers representatives with whom they work every day.
Tom Temin: Yeah, in some ways, OMB director Russ Vought, when it comes to contracting officers, might be the proverbial man shouting in a graveyard. There’s lots of people underneath, but they’re not. They’re not sure they hear what you’re saying, and so you feel contractors ought to really help get the word out in a pretty proactive manner.
David Berteau: Well, this is one of the responsibilities not only of the government and down from OMB be into the agencies, and I’ll give you a couple examples where agencies are already doing this. It’s also the responsibility, obviously, in the trade association like PSC to make sure that we help push this as far and as wide as possible. You know, we have a number of agencies that have taken very strong, proactive action to engage the associations in dealing with all of the contractor issues. The Defense Department announced, I think they put out a releasement over the weekend they are holding daily calls, or least regular calls, they may not be every day, with the trade associations, and they’re addressing issues that individual companies and collective roots of companies are experiencing it part of the response to the coronavirus and we have found those calls already be very productive. But the Defense Department put out a number of memos by the end of last week, which I’ll also make sure you have, and you can post them on your website. One of them takes the DHS guidance from Thursday of last week that helps define critical infrastructure that needs to be protected, and it uses the definition of that DHS/CISA memo and it says basically, if any contractors involved in manning, training, sustaining and supporting military forces, these are considered critical infrastructure. This is really important for services contracts which you think of as not infrastructure in the factory or the brick and mortar buildings sense of the word, but is essential to the operation of and security of America. Similarly, we’ve got memos from DoD, one of which expands on the telework or actually amplifies the telework guidance from the OMB memo. It actually came out a little before the OMB memo, so it was in parallel with that. And third, one that increases progress payments from 80 to 90% for larger companies and from 90 to 95% for smaller companies. Because we’ve already seen one of the impacts of the coronavirus is the impact on cash flow. These were already appropriated funds, it’s not a bailout. This is just an expenditure of funds that are already in place and you’re still withholding some in case there are issues with the contract. And the second agency with whom we’re doing this that I really want to note here is the U. S. Agency for International Development, which has been most outreaching in terms of regular calls with us as an association to address the unique issues associated with international development, where you have U.S. citizens and third country nationals all over the world in circumstances that, frankly attention needs to be paid. And they’re there as part of the implementing partners for international development. So we’ve really been pleased with the way some agencies have reached out. And obviously we’re eager to engage in similar conversations with other agencies.
Tom Temin: And final question. What about the Small Business Administration through which a lot of policy and in some cases, dollars are flowing?
David Berteau: Well, they have a key role to play in implementing the new legislation. But the legislation signed by the president last weekend and the current third emergency supplemental tied to a coronavirus that it’s working its way through Congress may pass by the time of the last broadcast of this is heard on today. But as SBA implements those again, providing the emergency loans to small businesses. It’s important to remember that you know, there’s 100,000 small businesses supporting the government as contractors and subcontractors. Perhaps more than that, DoD says that there may be 300,000 by the time you get to the lower tiers of the sub contracting process. And so it’s important that all of those businesses be kept going as well. One of the important things in the services business is it takes us a long time to build the workforce that we need to be able to get this stuff done and keeping that workforce together and keeping it ready in a mobile ready state as soon as the government needs them. Even if today, for instance, you might not be working on that contract, you’ve got to keep those people in place. And it’s important for the government to keep paying the companies to keep those guys going again. It’s not a bailout. It’s already appropriated funds that are just being obligated, expended in special ways to respond to the coronavirus and that’s what we’d like to keep going.
Tom Temin: David Berteau is CEO of the Professional Services Council, teleworking like everybody else, correct?
David Berteau: Correct Tom.Thank you.