Contracting

Election uncertainty doesn’t slow an ambitious regulation agenda

An ambitious agenda for regulation means contractors could see a slew of new and interim regulations in the next few months.

Tom Temin@tteminWFED

July 16, 2024 2:35 pm

9 min read

The upcoming presidential election keeps taking surprising and unsettling turns. One constant, though: the Biden administration doesn’t seem to be holding back on an ambitious agenda for regulation, which means contractors could see a slew of new and interim regulations in the next few months. Joining the Federal Drive with Tom Temin with his take, federal sales and marketing consultant Larry Allen.

Interview transcript:

Tom Temin You’ve looked at the latest rollout of the regulatory agenda, and if you’re a contractor, you’ve got to pay attention.

Larry Allen Tom, you really do have to pay attention. And this regulatory agenda, which only came out within the last few weeks, didn’t really get a lot of attention. And yet, it’s pages and pages of proposed rules. Now, of course, all of those don’t impact government contracting, but a number of them do. The list of proposed defense, federal acquisition regulations in and of itself, is pages long, and it can catch up any type of company that’s doing business with the Department of Defense, not just those who are paying attention to DOD rules.

Tom Temin Right. A lot of it has to do with the origin supply chain issues vis-a-vis China.

Larry Allen Oh, absolutely. There’s a whole big discussion about Chinese supply chains. And look, we’re all in favor of secure supply chains, Tom, everybody wants to make sure that we keep national security at the top of the list. But you know, the one of the problems that we’re starting to see already is that the pendulum never really stops in the middle. And you’re starting to see and hear some anecdotal evidence about contracting officers really taking umbrage with anybody that has even the most tangential relationships with China. And while we don’t want Chinese-made things in critical infrastructure, we do have to understand that China makes a substantial amount of the world’s goods and if we want to operate, then we’re going to have to find some medium between using those where we need to and keeping those solutions out of sensitive operations.

Tom Temin I remember a few months back, the GSA got dinged because it bought conference room cameras by a manufacturer called Owl, which are made in China. And, you know, conference room camera. Well, you know, confidential things get discussed in GSA conference rooms, maybe not so much for national security, as in, say, Pentagon conference rooms. But I guess the the worry is, are these cameras somehow sending back what they’re seeing and hearing to China, that type of thing?

Larry Allen Well, right, and that’s a legitimate concern to have. And, look, the bottom line is GSA expects contractors to abide by Trade Agreements Act rules and regulations and if contractors have to do that, then GSA should as well. And, you know, that case that you mentioned, Tom, I think really helped create kind of an atmosphere of fear inside the General Services Administration, over Chinese-made goods to the point where I’m starting to wonder if you can have General Tso’s chicken for lunch and still ended up being a valid U.S. supplier.

Tom Temin Yeah. Well, you know, it is hard to get by China. I mean, I was looking at webcams for my home use. And, you know, Logitech, I don’t know why I presume they’re made in China. But there’s some very innovative cameras out there. And you know, one of them like it’s on the stalk. So, that ends up in the middle of your screen. So, you’re looking right into someone’s eyes, as opposed to the cameras which are above or to the side. And nobody’s ever looking at each other on meetings. All right, seems like a good idea. But it said you could download two spec sheets, one in English and one in Mandarin. I thought, well, okay, we know where this is made. You know, I’m not sure I’d want that in my house.

Larry Allen No, as I said, we really do have to make sure we’re protecting national security. And there are legitimate concerns with some Chinese-made goods that you have to pay attention to, but what you don’t want to do is you don’t want to end up throwing the baby out with the bathwater. There’s going to be some times when you have to do that. You just need to be able to manage the risk appropriately until such time as either the U.S. or its allies ramp up their own domestic production and present alternatives that are both effective and within the reasonable cost realm. You know, we’ve seen this start to happen, Tom, with section 889, that I know we’ve talked about before. This is the telecommunications ban across all of government. And what’s in the news right now? Well, for something like the fifth year in a row, the Department of Defense has come out and asked Congress for a waiver from section 889. And it’s not because the Department of Defense doesn’t want to have secure supply chains. It’s the realization that in certain parts of the world, there are no alternatives to Huawei servers. And, you know, that’s why DoD has said, Look, we can’t realistically leverage a U.S. law to get all of our allies to dump servers that they use that are fully integrated into their systems, when there are no ready made alternatives that they can turn to. You know, that’s just another example of where you need to mitigate the risk and manage it, and understand that this is the world that we live in. And, you know, the same thing should be true for contractors, Tom. I think that, you know, if DoD has problems with 889 compliance, and they’re asking for a break, maybe we should give a similar break to industry.

Tom Temin We’re speaking with Larry Allen, president of Allen Federal Business Partners. That’s the other side of this, even though things like student loans, you know, are forgiven, or the administration tries to, you know, they get rebuffed by the courts here and there. And also health care cost burdens, they’re looking for relief there for people, but contractors never get a break.

Larry Allen No, contractors don’t get a break, Tom. And while it may seem like no one is held accountable for their actions these days, contractors most definitely are. So, while other people may be looking at certain types of monetary forgiveness, I am counseling contractors not to do that. Contractors have to make sure that they are up-to-date on their compliance processes, understand what they’re signing up to when they sign not just that contract, but a modification to that contract, because sometimes those modifications can undo things that you originally agreed to. And it’s not like if you say, please give me forgiveness, that you’re going to be treated the same as people with student loans or medical debt.

Tom Temin And that leads to the question of people, companies, small companies in particular, entering the federal market and whether they want to give them the regulatory and compliance costs and burdens, and just trying to understand it all, you know, can be hard for a new company. And you’re also pointing out this week that there is some technical issues with respect to simply registering with the SAM system operated by GSA on behalf of the government. It’s not so easy to get your unique identity ID. So, what do you see going on there?

Larry Allen Tom, this is something that I’ve experienced myself and some of my clients have experienced recently, as well. And that is, when you’re registering on SAM, you have to understand the difference between getting a unique identifier and full SAM registration. And you also have to understand that while the federal service desk and the SAM site may look the same and offer to the same types of solutions, they are two, in fact, different websites. And I think where a lot of companies get frustrated as they try to execute something on sam.gov, when they’re technically on the FSD site, and they can’t do it, they can’t figure out why. Well, this is my recommendation to contractors, whether you’re new, or whether you’re experienced, and that is, even when it comes to SAM registration, read the fine print. There are a lot of good helpdesk articles that GSA has put out. But you can’t just scan through this in a second and think that you’ve got it, because that will lead to substantial frustration. So, like anything else, while it may be a little confusing because there are several different sites and more than a couple of acronyms to understand, just to get started in government business, to get started in that business, you have to make sure that you’re paying attention to the details, just as you would after you get a contract.

Tom Temin And SAM, System for Award Management, I think is what that stands for, was originally set up as a way to streamline and simplify contractors getting their names into the system, so federal contracting officers could find them. But it’s worked out to be just ever more complicated, hasn’t it?

Larry Allen They’ve had a series of challenges, Tom. When GSA transitioned away from DUNS numbers to unique entity identifiers, that was supposed to be straightforward, and of course, nothing is really ever straightforward in government contracting. And that caught up companies of all sizes, and one of the most unfortunate outcomes was that it really delayed payment to small businesses, small businesses that are dependent on cash flow. And I think it took a while for GSA to work through those problems, and most of them now have been addressed. But that only works if you’ve been in the system for a while. If you’re still coming in new to it, then you need to understand that the barrier even to sam.gov registration is maybe a little bit higher than you think it is, and that when you’re registering in SAM, you are taking the first step towards saying my company will comply with these certain rules.

Tom Temin Right, so yeah, the acceptance into SAM and the completion thereof is not just a privilege, but it’s also a great big obligation, you might say.

Larry Allen That’s right. As always, it’s important to understand what you’re getting into.

Tom Temin All right. Larry Allen is president of Allen Federal Business Partners. As always, thanks so much.

Larry Allen Tom, thank you, and I wish your listeners happy selling.

Tom Temin And we’ll post this interview at federalnewsnetwork.com/federaldrive. Hear the Federal Drive on your schedule, subscribe wherever you get your podcasts.