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The new normal this time of year is for those in the federal contracting community to wait and hope Congress enacts funding for the next fiscal year. Plus, there are always those changes in the federal acquisition regulations. So who’s making the lives of the government’s industry partners easier and who deserves a lump of coal from Santa this year? To find out, the Federal Drive with Tom Temin talked with Larry Allen from Allen Federal Business Partners.

Interview transcript:

Larry Allen
Well, Eric, what contractors and their government customers should look out for is that each individual spending agency will likely have it’s budget allocation by the beginning of February, maybe the first week of February. Given the time of year, it’ll usually take that long before OMB does what it needs to do after Congress finalizes the bill, so that each individual agency gets their money for the remainder of the fiscal year. This is the new best case scenario I think that contractors and their government customers can expect to see; that is, Congress passing a bill before the end of the calendar year instead of before the end of the fiscal year. We haven’t seen Congress really pass appropriations very much at all before the end of the fiscal year. So doing it before the calendar year is a new normal. And in fact, if you’re a contractor, and you haven’t started to plan for that cycle, you should, because many of your government customers already have done this. So they’re used to working under the first quarter of the year under a CR. If they are, you should be too.

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Eric White
Yeah, if it’s a new normal, then at least you can plan for it. It may not be the best way to do things, but at least that provides some stability, I imagine.

Larry Allen
It does provide stability. And it’s a whole lot of a better deal than what we’ve seen a couple of years, when it’s not until late winter or early spring that Congress passes an appropriations bill, Eric. And then that has the similar delays too. Let’s say that we waited till March. Well, it would have been April, almost spring break time before agencies had their individual spending account, which would really have put the year on a short track. It’s no way to run a government business, and it’s no way to run a government agency.

Eric White
Another thing that they could possibly be happy about is what seems to be the vaunted return of earmarks, the amount of earmarks coming through to the possible omnibus appropriations measure. What can you tell me about that?

Larry Allen
Eric earmarks are congressional diktats, if you will, that tell federal agencies “we want you to spend this money in this way.” And frequently, it’s at least implied that it’s going to be spent with a specific company, or group of companies. And Congress had done away with the earmarks, oh, maybe seven or eight years ago. But frankly, if you’re a Washington watcher and you understand how Congress operates, you knew earmarks weren’t going to go away forever. And in fact, they’re back this appropriations cycle in a vengeance. And if you’re a contractor, now that you know that, you really ought to be reaching out to your elected officials, pointing out all of the wonderful things that you can do, not just for the government writ large, but right there in that individual congressional district or state, and see if you can work with your members to have some earmarks put in next year’s appropriations bill for you. It’s not the way to build a government business, but ignoring it and pretending it doesn’t happen isn’t smart either. So I think it’s important to understand that the age of the earmark is back. And that it’s definitely worth having a government affairs capability that’s tied to your government business, so that you can leverage those opportunities.

Eric White
Well, New Year means usually new rules for contractors. What about the well, what’s the FAR implementing new rules pertaining to climate reporting requirements as well as cybersecurity measures? What are the ones that you are on the hunt for the most?

Larry Allen
So Eric, I really think that contractors need to understand what’s going down in terms of the addition of new rules to their contract. And before I talk about a couple of specifics, I want to give a positive shout out to the General Services Administration. GSA is out trying to alert contractors saying, “Hey guys, these are new rules that are coming soon to a contract near you.” And like GSA, I think the contractors really need to pay attention, because these rules are going to change the way you do business with the government and the net of them, Eric, is that they’re going to add new tracking requirements, and new reporting requirements. Take the Greenhouse Gas Initiative, which is going to be one of the first things that contractors see. In fact, there’s a greenhouse gas provision already in a current RFP that GSA issued just a couple of weeks ago. That requires contractors to track all of their greenhouse gas emissions, up to a certain amount based on varying industry standards. And then not only do you track them, you have to now report on what you find. And if your contracts with the government are large enough, you have to provide a remediation plan for how you’re going to seek to reduce your greenhouse gas emissions. That’s probably the biggest one. What’s also notable here is that FAR Part 23, the sustainable procurement chapter of the FAR is going to be totally rewritten. And that Congress overall — or the administration overall, rather — is pushing contracting officers to minimize the risk of climate change in acquisition generally. These are all things that are going to manifest themselves into new requirements in your contract, even an existing contract. On the cyber side, I think, Eric, the biggest thing that contractors need to look out for is the major software supply chain rule that’s coming down. It affects anybody that is selling some software to the government. So even if you’re a reseller, it’s not like you have to come up with a new system, but you and the company that you’re buying those software from, the [original equipment manufacturer], the distributor, you have to understand what these new rules are. Make sure that you and your industry partners have the processes in place to comply. Because while it’s a requirement for maybe the software publisher or software creator, if you’re the prime contractor, you’re gonna have to follow these rules, too. So all in all, I think we can expect more regulation on government contracts in 2023, not less.

Eric White
It sounds like GSA acquisition officials made your nice list, in spirit of the season. Who’s on your naughty list, if you were Santa?

Larry Allen
Well, Eric, they did. GSA acquisition policy did make my nice list. if I was going to put together a naughty list and be procurement Santa Claus, I think I would have to put the CIO SP protesters on the NITAAC CIO-SP contract on the list. Everybody wants the ability to compete, but you can’t compete for a contract if it’s consistently being protested. I think the Office of Management and Budget might be on the naughty list; they’re being a little bit less than transparent about what they’re doing in terms of acquisition. And while it’s not entirely their fault they don’t have a administrator for the Office Federal Procurement Policy, somebody has to be on the hook for that. And if I was gonna put somebody else on there, I might put GSA’s Alliant three team on the naughty list, and that they land on that list for really curtailing discussions with industry. And I think in some level, being very circumspect about answering contractor questions even almost to the point of not answering the day and time what they’re asked what day and time it is.

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Eric White
Anybody else who will not be receiving the call from Santa Larry Allen?

Larry Allen
Well, I don’t know as usually, there’s some of the usual suspects, the people that hide behind email and voicemail and the government agencies that don’t have it looked at the new FAR rule that promotes industry-government cooperation and discussion. You see a lot of chilling non discussion even in areas where you could have a discussion. But well, there are also people that do things positively, people on the Santa’s list that do things right: CMS, IRS, Labor, and of course, NASA SEWP. All of these are groups that communicate with industry and are responsive to industry concerns. So we want to mention the good and the bad. But don’t be surprised if you haven’t been communicating that you end up with a lump of coal in your contracting stocking.

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