How federal procurement rules will change in the second Trump administration
With Donald Trump going back to the White House, those in the world of federal procurement are wondering what it means for them.
The re-ascendency of Donald Trump to the White House has made one radio station the most popular: WIIFM (What’s In It For Me). Those in the world of federal procurement are asking that very question. Holland and Knight procurement attorney Eric Crusius joined the Federal Drive with Tom Temin with some predictions.
Interview transcript:
Tom Temin: And you’ve put together quite a list of things you think could change as you join me in studio here. And the first one, Eric, executive orders with immediate effect as opposed to long rule making.
Eric Crusius: That’s right. Something interesting that we saw at the end of the last Trump administration was an executive order that was issued combating race and sex stereotyping. And the interesting thing about that executive order, besides the subject matter of it, was that it said that it had to be put into procurement contracts within 60 days. Normally, there’s a rule making process where the executive order instructs rule making to happen within a certain period of time. And that period of time is almost never met. But here we have one where they say start putting into contracts immediately. Let the rule making follow afterwards, perhaps. But that was a pretty interesting thing. I wonder if we’ll start seeing some of those kinds of executive orders in the beginning of the Trump administration this time.
Tom Temin: Yet because the classical method is the administration wants something and they put it in an EO and then the FAR Council has to actually do rule making to make it into the FAR or the DFARS.
Eric Crusius: That’s right.
Tom Temin: So we don’t know whether would there be a legal challenge to the other process to this fast tracking.
Eric Crusius: That’s right. And it’ll be interesting to see. I think the legal challenges will be dependent on the subject matter of the executive orders that have this requirement. And if it’s something that contractors don’t really care about or it’s not worth it for them to challenge it, then perhaps we’ll just see it happen. But if it’s something more substantive and could impact profits or could impact how contractors do business, we could see a legal challenge to it.
Tom Temin: Yes, because the second set of rule making is still in process for the Cybersecurity Model Maturity Certification Program. The first rule is in effect now. That could be the test case because CMMC started under the Trump administration.
Eric Crusius: That’s right. That’s one of those areas where I don’t expect that we’ll see a lot of change. The Trump administration had talked about kind of combating China, combating cyber incidents. Certainly, they were very much on the forefront of kind of issuing regulations to stop that. They talked about in his own agenda for this new administration protecting critical infrastructure, thwarting cyber actors, using regulations to do so. So I expect we’ll see more of the same in the cyberspace. And if you even look at CMMC itself, the first version of CMMC during the Trump administration was more difficult for contractors to comply with in the current version during the Biden administration. So I think we’ll see at least more of the same in the cyber area.
Tom Temin: All right. And then you’re also expecting acceleration of onshoring and Buy American requirements. How much more intense can they get? I mean, that’s pretty much the rule of the land now.
Eric Crusius: That’s right. I mean, that’s one of the few areas I think in federal procurement where Trump and Biden agree viciously, where they just they both agree on onshoring they both agree on Buy America. Biden started the Made in America Office within OMB, even in kind of Trump’s papers where they were kind of talking about their plans. They talked about using that office and expanding it. So I think we’ll see a lot more. There’s also talk of kind of looking at contractors and whether they’re outsourcing jobs and kind of restricting contractors who are outsourcing jobs. I’m not sure if that would be in the form of legislation or regulation or an executive order and whether that outsourcing has to be connected with government procurement or if it’s just anywhere within the organization. So that’ll be some area that we need to watch closely, especially for those manufacturers out there.
Tom Temin: Well, a big question is what jobs are the outsourcing now? I mean, I guess some programing is still done maybe in India. I don’t know. And places like that, I don’t think under law now can be done in Russia and China for federal contracts. No material goods can come from those bad places.
Eric Crusius: Right.
Tom Temin: So what are they outsourcing unless it’s to a subcontractor, which is American.
Eric Crusius: Right. And we certainly do have a lot of foreign contractors in our supply chain and they are necessary as of now, at least anyway, to let the government function properly. A lot of what we do as far as the U.S. government is concerned is for large and small manufacturers and service contractors that are overseas and they’re a vital part of our supply chain. How this impacts that remains to be seen.
Tom Temin: We’re speaking with Eric Crusius. He’s a partner at Holland and Knight, specializing in procurement. And we talked earlier about cybersecurity regulations. You see more action coming there from the incoming crew?
Eric Crusius: Absolutely. I think a big priority is combating China and their alleged theft of our trade secrets. I don’t even know if I need to say alleged, but the theft of trade secrets across.
Tom Temin: It’s not alleged to those that have had it purloined.
Eric Crusius: That’s right. And no matter how you how you caption it, it’s certainly an area that the U.S. government, Democrat and Republican alike, see a large threat. So I think we’ll see more kind of regulations kind of aimed at preventing that from happening. CMMC is probably just a first step. We could see CMMC adopted across the government at some point in the next few years.
Tom Temin: Which people have been expecting in some ways for GSA to have its own CMMC for. That’s been parlor talk for years.
Eric Crusius: Right. And really when you think about it, the Department of Defense has gone through the hard part of adopting this program, setting it up, having the accreditation body set up. So really the thing now is the agency could just come in pretty easily. And I say that as somebody who’s outside an agency doesn’t have to write the rules, but pretty easily come in and utilize CMMC for its own purposes.
Tom Temin: And what do you see with small business, small business set asides and so forth? I mean, I think the administration incoming will have a good feeling for wanting small business participation. How do you see that changing?
Eric Crusius: It’s very interesting. I mean, on one hand, I think you have the incoming Trump administration talking about utilization of small businesses, getting technology that small businesses develop and getting that into the government supply chain. On the other hand, we’ve had challenges for kind of set asides. You look back at the Supreme Court case where there was a decision by the court about admissions in colleges. And there are a lot of folks in the legal community who think that could be used in the procurement space as well for set asides that are based on race or sex or where you’ve come from. So how those two kind of parallel tracks play out will be interesting to see.
Tom Temin: Yeah, I mean, that’s a question because, especially in the technology area, there’s tons of companies that are started and very successfully operated by women, different people that are minorities. So you wonder, could they just compete because of the quality of their work and their talent? In most cases, I mean, the easy answer is, sure, they could. So one wonders.
Eric Crusius: Right. How this plays out will be one of the more fascinating things, I think, in the next four years that will look at.
Tom Temin: All right. And then there have been a lot of procurement regulations issued by the current administration relating to DEI in the contractors workplace related to their energy footprint. A lot of these things coming in, socio goals that are being expressed in federal contracting that you can’t impose on private industry work. And probably we’ll see a lot of those get yanked.
Eric Crusius: Right. I mean, that’s the thing about issuing executive orders that the new president can come in and say, ‘Nope, no thanks.’ And years of rule making are kind of all done for it. We have a few examples of that. We had the Greenhouse Gas Proposed Rule that came out in November of 2022 at this point. That was met with a lot of consternation from industry that has not made it to final rule. I suspect that we will see that rule making process wind down for that initiative. We also have the green products FAR clause that came out in May: 52.223-23. FAR clause required when there’s a green product available for the government to purchase that green product as opposed to its non-green alternative. Stuff like that has been around in the government for a long time. So I wonder if we’ll see an aggressive move to strike that or if it’s just going to kind of play out. It hasn’t had a very big role in procurement that I’ve seen so far.
Tom Temin: Right. I think it was in the George W. Bush administration. They talked about zombies, which were LEDs that were on all night in electronic equipment that they were concerned about.
Eric Crusius: Right. So there’s always some form as we go back years and years. And then we have those kind of those labor regulations that inevitably go back and forth with each administration. Non-displace and qualify workers has been around since the Clinton administration. Has gone back and forth with every administration that requires contractors to give offers of employment to blue collar workers on service contractors. So Clinton put it in. George W. Took it out, Obama put it back in. Trump took it out and Biden didn’t get all the way there. The DOJ rule was issued, but the far rule has not been issued yet. So we’ll see if that process continues to play out where it’s rescinded again.
Tom Temin: Yeah, it’s almost like having a kosher kitchen. Today, we’re on the meat side. Whoops, let’s change now. We’re on the dairy side. They got to leave one behind and go to the other.
Eric Crusius: That’s right.
Tom Temin: All right. And what do you expect for some of the structures that support federal procurement and policymaking? I’m thinking of the Office of Federal Procurement Policy and to some extent, OIRA, the Office of Information and Regulatory Affairs. These little known White House apparati, which can have a lot of influence throughout the industry.
Eric Crusius: Right. With OIRA, I do think we’ll see a lot more attention paid to it. There have been policies that have been called for by Trump allies to say, ‘Hey, we should expand this office because OIRA performs actually a very vital function of preventing regulations that come out that cost industry a lot of money.’ Whether you agree or disagree with that, that’s their position. So we could see OIRA kind of expand. And I think that’s an expansion of a wire I think is a good thing because right now regulations take a long time to leave OIRA for once they get there. And that’s not because of folks that aren’t working hard. It’s because they have dozens and dozens and dozens of regulations to look over and a small step to do it.
Tom Temin: Which says a lot in and of itself.
Eric Crusius: Right. So I do think we should see they’re going to ask for more money for OIRA probably, and hopefully more efficiency with getting regulations in and out from OIRA. Another interesting thing is Executive Order 13891, which required significant guidance documents to go through a notice and comment period just like regulations do. That was put out by the Trump administration the last time, it was rescinded by the Biden administration. I would expect that we would see that reinstated again. So significant guidance documents where contractors have to abide by that guidance will go through a rule making process also.
Tom Temin: I think the industry would welcome the guidance being public.
Eric Crusius: I do, too. I mean, in talking to clients and it’s again, it’s a smaller sample size. It’s just people I talk with, but they don’t care too much about what the regulations require. They just care about knowing what they require. They just want to comply. They just have to have certainty about what they have to do and what they can’t do. And I think with that, they’re fairly well satisfied.
Tom Temin: So a lot of changes will be coming, but it won’t bring anything we haven’t really seen before.
Eric Crusius: Right. I’m sure we should expect the unexpected at some points. But the benefit of having an administration that was here four years ago, we kind of saw this game plan play out already. And I expect we’ll see much of the same.
Tom Temin: Yeah, it’s like I have a neighbor near my house and they put up these gigantic lawn ornaments for every holiday. I think I know what’s coming for the Christmas season.
Copyright © 2024 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.
Tom Temin
Tom Temin is host of the Federal Drive and has been providing insight on federal technology and management issues for more than 30 years.
Follow @tteminWFED
