Contracting

That rumbling you hear is the end of the fiscal year approaching

Time-wise, there's not much left of the federal fiscal year. Less then three months now. Money-wise it's a different story. Agencies will spend around $217 bill...

Tom Temin@tteminWFED

July 5, 2023 12:20 pm

7 min read

Time-wise, there’s not much left of the federal fiscal year. Less then three months now. Money-wise it’s a different story. Agencies will spend around $217 billion between now and September 30, more than half by the Defense Department. Contractors, especially small businesses, need to make sure their pipelines are clear, according to federal sales and marketing consultant Larry Allen, who spoke with Federal Drive with Tom Temin.

Interview Transcript:

Tom Temin And it does have a little bit of a weird feeling this year because of just the the debt deal came and now there’s still no budget. And so it could be a full year C.R. coming. But we do have the rest of this fiscal. So what’s the best advice for contractors for the time left?

Larry Allen Tom, I think the best advice for contractors is essentially what you inferred, and that is this is the time to strike. Now is the time where you have opportunities, where there’s money to be spent by federal agencies. I wouldn’t say don’t worry about October, but October is a few months away and there really is not much that is within our control to change the political appropriations and budgeting process. So now is the time to focus on finishing the year strong and getting as much business in the door as you can. If you’re a small business, I think it’s useful to know that, according to Bloomberg Government, the top ten federal agencies need to spend $28 billion with small firms just during this quarter in order to make their small business contracting goals. That’s a lot of opportunity, Tom. And within that, the Department of Veterans Affairs, surprisingly, I think, has the most ground to make up. So if you’re looking for some places to target, particularly if you already have some business with the VA in the pipeline, that could be a good focus area.

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Tom Temin Right. And because so much of the dollars will be going through the governmentwide acquisition contracts, the popular ones, which are task orders, not really new contracts in that sense, technically, then you might have a better shot in that route than trying something from a brand new full and open competition. If there even are any more launched in the next couple of months.

Larry Allen Tom, I would emphasize that this is the time of year that it’s difficult for agencies to do full and open competitions. Will they do them? Of course they will. Pull in open competition, your basic start from square one procurement is always part of the government acquisition market. However, asking your government customer to do that when there is time ticking on the clock and other alternatives available could be a very tough sell on top of what it is you’re trying to sell them in terms of a solution. We look at the statistics every year. This year the estimates are that 60% of total dollars, or over $130 billion Tom, are going to go through those standing IDIQ contracts. Things like the GSA schedules, the NASA SEWP program. In DoD, you have the CIOSP programs and the Navy next gen contracts. So there’s plenty of going on in that IDIQ area. Key here is you need to focus on the things that are in your pipeline, but you also need to be able to answer the “how” question. That is, how do I get to you? And if it’s an IDIQ contract that either you or partner have, that’s great. If it’s a small business set aside, that’s great. Simplified acquisition, that’s okay. But you better have some easy, readily identifiable ways to make it that much easier for the customer to get the solution from you. Because if they can’t get it for me, they might be able to get it from a competitor.

Tom Temin We’re speaking with Larry Allen, president of Allen Federal Business Partners. And there is this new Homeland Security set of regulations coming out only after six years, it took them to get them out. On how contractors must handle CUI, controlled, unclassified information. And these are supposed to be in solicitations immediately starting, I think, the end of July. Could that actually affect things this year, do you think?

Larry Allen Tom, it certainly could affect things this year if you’re doing business with the Department of Homeland Security. Ironically, this agency has kind of leapfrogged over their colleagues at the Department of Defense and come out with an interim rule on contract on how contracts are going to handle controlled, unclassified information. And what’s interesting about this is two things. First of all, DHS came out first. Second, they’re not using the same definition or baselines of what constitutes CUI as the Department of Defense is using. DHS came up with its own definition of what constitutes CUI. It’s a little bit more expansive in some ways than the DoD definition. And then the other part is that the standard by which the Department of Homeland Security is implementing CUI is different, again, from what the Department of Defense is purportedly going to be using when they come out with their own rule, which is expected to be sometime in the next few months.

Tom Temin And this as NIST is in the middle of a revision of the standards that it issues for CUI. And that’s going to be later when that comes out. They’re still evaluating comments.

Larry Allen That’s right. What we’re referring to here, Tom, is the NIST 800-171 standard on how contractors or anyone that handles sensitive, controlled, unclassified information or even federal contract information, which has its own definition, is handled. And the key here, as you inferred, is that that standard itself is changing. So companies that have already made investments are coming up to speed on complying with the current NIST standard, which has been in place for a while, and the coming CMMC standard that the Department of Defense is supposed to come out with soon are going to have to invest even more to ensure that their systems are compliant with whatever the new standard happens to be.

Tom Temin Yeah, so some work to do there and you got to keep your eyes open. And finally, I just want to discuss with you the idea of just keeping your priorities as a contractor, because with all that money floating around, it looks like you could just sort of plunge in and reach around for it. But it doesn’t work that way, does it, in reality, especially as the year winds up.

Larry Allen Tom, you’re exactly right. Whether you’re a government contractor or a government agency, no one I know has the resources to be everywhere at once. You simply have to prioritize the things that are important to you right now if you’re a government contractor. That means starting to prioritize the opportunities that are in your pipeline, not necessarily what are the biggest, but what are the best or the ones that you’re most likely to have. And then you have to commit the resources based on that evaluation. If you don’t commit the necessary resources to pursue the most likely or most lucrative pieces of business, then you’re going to spread yourself too thin and you run the risk of not doing any one thing particularly well. But I would hasten to add that there’s absolutely a lesson here for federal agencies. Federal agencies, particularly right now, are trying to implement lots of different policy changes pushed by the administration, whether it’s socioeconomic or environmental or some other type of initiative that the administration has. These are all perceived goods by the people in power, and yet you can’t have agencies doing all of them at once, because that’s going to lead to frustration. That’s going to lead to a lot of confusion, lead to confusion, ironically, not just with contractors, but with people that you’re serving. We hear a lot about customer experience for future customers. That’s certainly going to be an experience. So whether you’re a contractor or a government agency, it’s important to do the tough work, have some leadership and prioritize what’s most important on your to do list.

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