Joy Sturm, partner at Hogan Lovells, joins Off the Shelf  for a briefing on the proposed BIOSECURE Act that would reshape biotechnology supply chains serving the federal government.

The proposed legislation would prohibit the federal government from contracting with certain Chinese “companies of concern.”  The prohibition would cover contracts, grants, and subcontractors.

Sturm provides context on the goals for the legislation and outlines the key provisions and how they would impact federal contracts, agencies, and contractors. She addresses the proposed legislation’s key definitions, contracting restrictions, scope of coverage, and implementation timelines. Importantly, Sturm also addresses how companies should prepare for the BIOSCURE Act requirements.

The discussion concludes with thoughts on the prospects for the proposed BIOSECURE Act over the reminder of the Congressional year.

The post The BIOSECURE Act first appeared on Federal News Network.

Lockheed Martin recently won a settlement worth more than $130 million in a protest with the Air Force. The company completed a contract to update the big C5 transport places with new engines. But it also had to do thousands of repairs outside the scope of the contract, and that’s where the disagreements started. The Federal Drive with Tom Temin  got details from Haynes Boone procurement attorney Dan Ramish.

Interview transcript: 

Tom Temin  Apparently, the planes arrived to Lockheed from the Air Force in such neglected condition that Lockheed had to do a lot more than they originally contracted in order to get the things flyable and to meet the Air Force requirement that the planes come back out like new. Is that the gist of it?

Dan Ramish  Well, Tom, part of the issue was that the planes weren’t required to come back like new. So, the contract wasn’t really repair contract, the contract was intended to modernize the C5 transport aircraft and to kind of get them online a greater percentage of the time and have them be more reliable. But, as part of this, there was a line item that provided for Lockheed to provide repair services to fix legacy issues that were either necessary for them to be able to make the upgrades or that affected the safety of flight for the aircraft. So, pretty limited types of repairs that were expected under the contract, but that wasn’t the way it played out in principle. Now, there’s always going to be some amount of additional legacy repairs of issues. It’s hard to predict exactly what types of repairs, what’s going to wear out on different aircraft. And there was testimony in this case about that issue, that aircraft fly different and unique missions in different environments. And, so, you never know exactly what’s going to wear out when. So, there’s a built-in flexibility for what the contract called “over and above work.” The problem was that there was so much over and above work, that it kind of affected the overall performance of the contract. And the work that Lockheed was really supposed to be doing, modernizing the aircraft.

Tom Temin  Right. So, the over and above was provided for, but maybe the Air Force vastly underestimated how much beyond the scope repairs would need to be made, in other words.

Dan Ramish  I think that was part of it, Tom. The other part of it was that DCMA imposed a higher standard than was supposed to be applicable under the contract. DCMA required a like-new standard. After a few aircraft had been modernized, they started having a more zealous inspection routine that looked at things that didn’t go to whether the modernization could be performed on the aircraft or whether it was safe to fly. So they were looking at things like foreign object debris, and requiring all of that to be removed, which didn’t affect the safety or the ability to make the upgrades and they’re requiring Lockheed to fix other technical issues that weren’t really necessary.

Tom Temin  If say, the engines were put in and the thing flew safely, they might have complained to the Air Force, well, you didn’t reupholster the copilot seat, which was split. I’m making that one up.

Dan Ramish  Yes, issues that would be extraneous. Yes, things like that, that were not really essential. And the contract only expected there would be essential repairs. So, the interesting thing about this, and this comes up a lot in government contract disputes, is that Lockheed was actually paid for the extra repairs that it performed under the contract. There was a mechanism in the contract for them to be paid the direct cost of performing the repairs. The problem was that it wasn’t just that they had to perform these repairs, but that there were so many legacy repair issues that they had to re-sequence the actual work that they were supposed to be doing and move personnel around. Some of the legacy repair issues were difficult to perform, and so they took some of their best mechanics who should have been working on the upgrade to the aircraft to have them instead deal with the legacy repair issues. And they changed the sequence of performing the repair work so that they could deal with all the extra repairs that DCMA was requiring.

Tom Temin  We’re speaking with Dan Ramish, a procurement attorney with Haynes Boone. Probably some of the mechanics might have encountered parts of their grandfathers had installed on this plane, because I think the first one was delivered, like, in 1969, you know, during the Nixon administration to the to the Air Force, and they’re still flying.

Dan Ramish  Well, yes.

Tom Temin  So, the dispute then arose in what Lockheed felt it had to lay out for allowable repairs, but it was just more than the Air Force felt it should pay and so Lockheed sued for that money.

Dan Ramish  Yes, Lockheed brought a claim for the loss of productivity and disruption caused by having so, so many extra repairs that DCMA was requiring. And during the performance of the contract, Lockheed and the Air Force tried to address these issues. You know, they brought in an Air Force onsite representative who was helpful in speeding up decisions, whether repairs needed to be made, and they introduced a new government advisory team that reviewed the repairs to make sure that they were really essential. And those measures helped, but there was still a significant volume of repairs above what should have been expected under the contract.

Tom Temin  Got it. So, for example, if putting in a new engine, and you found that the part that the engine hangs on was cracked? Well, that’s something you could reasonably expect Lockheed to say, yep, this has got to be fixed. But sounds like there were things inside and away from the modernizing parts that they fixed at the Air Force’s urging, that then didn’t get paid fully for the, as you say, the inconvenience and the out of sequencing that it caused, which is a real cost in a production situation.

Dan Ramish  Absolutely. So, to give you a sense, in the decision, they noted that Lockheed expected over and above work to be 3% of the initial production unit, and they experienced two and a half times that amount. So we’re talking about massive excessive increases in the amount of legacy repairs. So, they did bring this claim. They filed the claim with the contracting officer and then appealed to the Armed Services Board of contract appeals. And what did that board of appeals find? The Armed Services Board ruled in favor of Lockheed on its disruption claim and sustained the appeal and awarded the $131 million that Lockheed was seeking. And the board looked at the disruption claims. So, Lockheed, as I said, was paid for the direct repairs. And it was arguing that its fixed price work to modernize the aircraft cost more because of legacy repairs. And Lockheed brought out an expert. What they argued was that the first few aircraft didn’t involve that much over and above work. But then DCMA started using this heightened standard of like new, and that really kicked up the number of legacy repairs. And so what they did was they used a methodology that’s referred to as the measured mile approach, and said, listen, we can’t prove the amount of extra cost with each individual repair that the government ordered here. We need to look at all of the costs, and we’re going to use as a baseline, the first few aircraft where the government was being reasonable, and the repairs were kind of in line with what they’d experienced on other contracts. And they compared that against later aircraft, where DCMA was applying this higher standard and said, well, the reason these other aircraft cost so much more was because the additional legacy repairs were being required and affected the sequence of the work.

Tom Temin  It’s almost a case of if you have a kitchen done by a contractor, it’s while you’re here, can you add this and that effect that the Air Force was imposing?

Dan Ramish  Yes, historically, this is a challenging kind of claim to prove. As you can imagine, because there’s a preference if you can to identify the specific costs that increases rather than looking at the total cost, a version of a modified total cost claim. But Lockheed was able to do it here. And their expert actually compared the learning curve for the first few aircraft to the learning curve to the later aircraft that were affected, and kind of had an unusual approach to proving those damages. But ultimately, the Board found that methodology to be appropriate and was persuaded by Lockheed’s case.

Tom Temin  So, in other words, the later planes of the 49 that were fixed are actually nicer than the first ones that are fixed. But the Air Force had to pay for the difference.

Dan Ramish  Yes, they involved fixing a bunch of additional auxiliary issues that weren’t really necessary under the contract. Because of the volume of those extra repairs to those legacy issues that weren’t needed, the board was persuaded that that caused Lockheed to incur all these extra costs.

Tom Temin  Right. So, the lesson for the government here is keep your requirements straight and stick to them, and don’t have this kind of creep in scope while you’re underway, because you’ll end up paying for it.

Dan Ramish  That’s right. Ultimately, the government and the taxpayer had to pay for the extra work. And if they had stuck with the repairs that were actually essential, that, of course, would have saved money. There are also litigation lessons for the government here. The government’s defenses really were technical defenses. Many of them had been raised earlier in the litigation. They argued again that Lockheed’s claim was subject to the statute of limitations and that Lockheed had released its claims in a previous modification. And the board said, we’ve already ruled on these issues, you haven’t raised any new arguments, but the government seemed to really be counting on that in order to win and didn’t put on its own expert or its own evidence to refute Lockheed’s account of the extra costs that it incurred.

Tom Temin  And by the way, the project was completed several years ago, like 2018, actually, and so it shows that it’s never too late to try to recover your costs.

Dan Ramish  That’s right. Ultimately, it’s a difficult burden for the contractor to prove damages in these kinds of scenarios. And Lockheed here provides an example of how you can do it with an appropriate expert. And another thing that they did that was helpful to them here was that their expert backed out offs that were unrelated to the legacy repair issues, and that really helps the credibility of a contractor’s claim to show the board affirmatively that you’re pulling out things that the contractor could have been responsible for and are overclaiming.

Tom Temin  Dan Ramish is a procurement attorney with Haynes Boone. Thanks for that update.

Dan Ramish  Thanks, Tom.

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.

The post What happened when the Air Force neglected its biggest plane for too long first appeared on Federal News Network.

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.

The post Election uncertainty doesn’t slow an ambitious regulation agenda first appeared on Federal News Network.

SBA is planning to upgrade its online certification platform, starting on Aug. 1. The agency wrote on its website that the upgraded system would be available for new applications by early September.

SBA says it will not accept new certification applications during the upgrade period.

“New and prospective applicants for federal small business certification are encouraged to wait until the upgrade is complete before applying,” the agency wrote on its website.

But Senate Small Business and Entrepreneurship Committee Ranking Member Joni Ernst (R-Iowa) and House Small Business Committee Chairman Roger Williams (R-Texas) are calling on SBA to delay its upgrade of the platform until the end of fiscal 2024.

Lawmakers, in a letter to SBA Administrator Isabella Casillas Guzman, say taking the certification platform offline in the final months of fiscal 2024 would create a “harmful timeline,” and cause problems for firms with critical year-end contracting deadlines that may need to recertify their small-business status to keep doing business with the federal government.

“Once again, the SBA is putting small businesses last and forcing them to navigate a bureaucratic mess,” Ernst and Williams told Federal News Network in a statement. “Shutting down the certification portal right before the end of the fiscal year, the busiest time for applications, without a clear timeframe for reopening is completely unacceptable.”

Federal agencies award a large portion of their contracts in September, just before the end of the fiscal year.

“While we agree with the decision to improve this critical technology platform, we are deeply concerned with the ill-conceived timeline and lack of consideration the SBA has shown towards small businesses in making this decision,” the lawmakers wrote in a letter to the agency. “Closing the certification portal during this critical juncture, especially as such upgrades do not appear to be time-sensitive or essential, displays a worrisome insensitivity to small businesses new to federal contracting.”

SBA wrote most small businesses already certified by the agency would not be impacted by the pause in applications. The agency said it would send guidance to small firms needing to renew their SBA certification during the upgrade period.

SBA is encouraging prospective small business applicants to wait until the upgrade is finished to apply.

Lawmakers, however, are concerned SBA hasn’t provided a set date, beyond “early September,” or shared any contingency plans, in case the upgrade project runs into unexpected delays.

“Lacking such information, it is unclear why the SBA needs to undertake this massive disruption in services in August,” they wrote.

SBA’s anticipated upgrade would impact all its socioeconomic set-asides contracting programs:

• Women-owned small businesses (WOSB)
• Economically disadvantaged women-owned small businesses (EDWOSB)
• Veteran-owned small businesses (VOSB)
• Service-disabled veteran-owned small businesses (SDVOSB)
• Historically underutilized business zones (HUBZone)

SBA published a final rule last month that will eliminate self-certification for Service-disabled veteran-owned small businesses whose contracts or subcontracts with the federal government count toward its small-business contracting goals. The final rule will go into effect on Aug. 5.

“As SDVOSBs have recently been told that they need to apply for certification, new registrants may be dismayed to learn they are unable to do so,” Ernst and Williams wrote. “After serving our country with honor, America’s service-disabled veterans should not face unnecessary hardships or delays in pursuing contract opportunities as they seek new certification.”

In January 2023, SBA took over the work of certifying new veteran-owned small businesses through its Veteran Small Business Certification (VetCert) program. The Department of Veterans Affairs previously certified these firms, but Congress moved this work over to SBA in the FY 2021 National Defense Authorization Act.

As part of the transition, SBA brought over 13 former VA employees and made seven additional hires last year. It also brought over 50 contractor employees who previously worked at VA to handle application processing and operate its call center.

SBA chose not to migrate VA’s certification management system. Instead, the SBA brought all its certification and loan programs onto a unified digital platform called MySBA.

The lawmakers said it remains unclear if upgrades to the online certification platform would impact the VetCert or MySBA portals.

Ernst and Williams said SBA notified their committees about the certification system upgrade in a “last-minute call” on June 13.

“The sudden announcement of an impending certification shutdown does not provide enough time for small businesses to react or reorganize,” they wrote. “Many small businesses are likely to remain unaware of this development until the moment they seek to access the certification portal, only to discover it is nonoperational.”

The lawmakers also said SBA hasn’t done enough to make small businesses aware of the upcoming changes, or advise impacted firms on how to renew their small-business certifications ahead of the planned outage.

“It is unreasonable for the SBA to assume full public awareness by simply posting information buried on its website, less than six weeks prior to the system shutdown,” Ernst and Williams wrote. “It is also unclear whether the SBA has appropriately informed its resource partners, as it will impact the services those entities can provide.”

According to the letter, SBA assured lawmakers and their staff that “there was little need for concern, as SBA had an excellent technical team.”

However, Ernst and Williams said SBA Acting Chief Information Officer Stephen Kucharski was not on the call, and that SBA officials did not say if the agency was relying on external contractors to assist with the portal upgrade.

Among their requests, Ernst and Williams are asking SBA for alternative plans that would allow the agency to keep accepting and processing certification requests during the update, “as opposed to a full shutdown.”

The lawmakers are asking SBA for a full list of the intended upgrades to the certification platform, and how the upgrades will improve the customer experience for small firms going through the certification process, as well as flagging fraudulent applications.

Ernst and Williams are asking SBA to provide responses to their full rundown of more than a dozen questions by Friday, July 19.

SBA, over the past few years, phased out the ability for companies to self-certify as small, disadvantaged businesses that are eligible to compete for federal set-aside contracts.

The agency finalized a rule in 2020 that allowed some participants in its Women-Owned Small Business (WOSB) program to self-certify their eligibility.

A provision in the 2015 NDAA mandated SBA put an end to the self-certifications.

The Government Accountability Office reported in March 2019 that about 40% of the WOSB-certified businesses in its audit sample were ineligible to participate in the program. GAO also expressed concerns about the performance of several third-party WOSB certifiers

More than one in four dollars spent on federal contracts go to small businesses.

The federal government exceeded its overall small business contracting goal in fiscal 2023. Ten agencies received an “A+” for meeting their small business contracting goals, and another two agencies received “A” grades.

The post GOP lawmakers demand SBA postpone IT upgrades amid year-end contract spending surge first appeared on Federal News Network.

This week on Amtower Off Center, host Mark Amtower is joined by GovCon marketing expert Lisa Sherwin Wulf of LSW Marketing.

Topics discussed include:

• End of FY marketing
• Things NOT to do at end of FY
• Content and when to gate your content
• End of FY events

The post End of Fiscal Year marketing first appeared on Federal News Network.

As a result, there has been no shortage of procurement legislation and regulation prohibiting or curtailing the federal government’s purchase of Chinese products: Section 889 of the Fiscal Year (FY) 2019 National Defense Authorization Act (NDAA) (restrictions on the use of telecommunications equipment and services); Section 847 of the FY 2020 NDAA (mitigating risks related to foreign ownership, control, or influence of Department of Defense (DoD) contractors or subcontractors); Section 223 of the FY 2021 NDAA (disclosure of funding sources in applications for federal research and development awards); and Section 5949 of the FY 2023 NDAA (prohibition of certain semiconductor products and services).

Even more legislation may be on the way, as we see provisions in the House version of the FY 2025 NDAA (see, e.g., Sections 173, 178, 242, 807, 1706, and 1722) and in the Senate version of the bill (see, e.g., Sections 885, 886, 887, 888, and 889).

Two different supply chain supply regimes essentially govern supply acquisition: The Buy American Act (BAA) and the Trade Agreements Act (TAA). Recently, there has been a renewed focus on the BAA, as the domestic component requirements have been increased.

The BAA, however, is a price evaluation preference, which means if the price of a Chinese product is low enough, the federal government will buy that product. For large business offerors, the price preference added to non-domestic offers is 20%, and for small business offerors, it is 30%. Under DoD acquisitions, the preference is 50% for all domestic offerors, regardless of size.

Depending on the item and the value of the acquisition, the TAA or other specific free trade agreements might apply because the United States Trade Representative (USTR) has waived the BAA for many supply acquisitions above specific thresholds, ranging from 50,000 to 174,000. If the TAA applies, offerors generally must supply products made domestically or in allied countries.  Most major acquisitions for commercial products, like the MAS program, are subject to the TAA.

Under the TAA, Chinese products are not eligible for purchase because China is not a signatory to the TAA. Although the BAA favors domestic production, it has the downside of allowing the acquisition of Chinese products in certain circumstances. The TAA provides a holistic approach to strengthening the supply chain, by taking advantage of the economic advantages and technical capabilities of our domestic sources and our allies, with the added benefit of providing domestic firms with the ability to participate in the procurements of allied countries. The differences between the BAA and TAA are important considerations as government and industry work together to address supply chain security and resiliency.

The post Competing global supply chain approaches first appeared on Federal News Network.

The Army has a plan to no longer “fight the network.”

Through the Unified Network Operations (UNO), initiative, the Army wants to create an agile, software-defined network that is easy to set up and use. This is the opposite of what soldiers currently must deal with then setting up a tactical network that requires on-premise hardware, cables and unique knowledge and skillsets.

The Army is laying the groundwork for this new network set up under UNO in a new draft request for proposals that Lt. Col. Keith Jordan, the product manager for Tactical Cyber and NetOps, in the Army’s Program Executive Office Command Control Communications-Tactical (PEO-C3T) said will bring efficiency, ease of use and, most importantly, meet the needs of commanders more readily.

“There’s a time component of how long it takes to make the network operate. That’s a concern. But also, it’s a manpower issue. It’s specialized training and skills that our signal soldiers are required to have in order to make all these different components of network work, both from a hardware perspective, a cabling, a software interoperability issue perspective and troubleshooting. So there’s a lot of different factors that the soldiers have to go through to make the network work,” Jordan said in an exclusive interview with Federal News Network. “When they are having to do those tasks across multiple items, one-by-one, it does take a lot more time. And depending on a unit, you’re going to always have a degree of soldiers that have the right requisite training and the right requisite experience. So there’s always a little bit of inefficiency built into that model. What we’re looking to do through this is to really improve that inefficiency, and make it much more a much simpler task for those soldiers, especially if we’re not fully manned that at each unit to do that mission.”

PEO-C3T has been leading the UNO effort for the better part of two years and the draft RFP is the second piece of a three-pronged effort to create this new software-defined network.

Jordan said the draft solicitation, for which responses are due by July 17, will help inform its long term plans to bring in commercial technologies and take advantage of cloud services. PEO-C3T expects to issue a final RFP for this multiple award indefinite delivery, indefinite quantity contract in early 2025 and make awards in early 2026.

In the meantime, Jordan said the Army will soon award “several” other transaction agreements (OTAs) to examine prototypes of what UNO may look like.

“The Army acquisition executive last year decided that UNO would utilize the software acquisition pathway. This is a new pathway under the adaptive acquisition framework that really is focused on how we manage, contract and deliver software capability to the Army. It’s different than what we might typically see under the some of the older pathways. This really is a revolution of thinking in the Army of how we recognize that software is different than hardware and it needs to be procured differently,” he said on Ask the CIO. “Really, what that does is it allows us to deliver capability incrementally versus like a big bang where the product is done all at once. We recognize that this will not be done right off the bat, you’ll get updates to the capability over time and each time we make an update, the capability will get more and more mature, more and more capable. The whole idea is we’re able to rapidly make these updates versus in the past where it may take a really long time to make an update. We want to update very often based on feedback in whatever theater we might be operating in.”

Army testing prototypes through OTA

Through the OTA process, Jordan said vendors will demonstrate SDN capabilities that can bring together several disparate systems and handle a large number of users over a several month period.

He said the vendors will demonstrate the SDN capabilities in the lab and in the field so soldiers can provide real-time feedback and the contractors can add or change the network as required.

Jordan said “usability” and “simplicity” will be key concepts that the Army wants to see in the prototypes.

“We think by doing that we’re going to really get down to a good vendor, and then following that, we’re going to pursue a FAR-based contract that will allow a lot more vendors to get in the mix and be able to deliver various capabilities,” he said. “We don’t know how many vendors we’re going to end up with so that’s why the window [for timing] is a little bit difficult. But we think between late 2024 and 2025, we’ll be able to complete that [OTA award] process. Then as we go into the prototype phase, the idea would be that’s a little bit of a longer phase because there’ll be a downselect. We’re not going to take the same amount of vendors from the lab to the field. We’re going to take those vendors out to the field and that’ll be a little bit longer because what we do want to do is see their agile development process and we want to be able to see as a soldier provides feedback to a particular company, we want to see him make the changes that we’re looking for. It’s not just about the technology, it’s also going to be about the company’s ability to manage the process.”

Jordan said the network of the future will depend on agile and DevSecOps process, where signal soldiers will not have to have special skillsets.

The future network also will enable commanders to make faster and better decisions as data will be easier to get and use.

“We’ve had to fight the network for a long time. This will help us be able to get the network up and running efficiently, tailored to our mission needs and operationalize it,” Jordan said. “For industry, there’s going to be lots of opportunities inside UNO to deliver unique and value added capabilities to the network. We’re really excited because there is so many opportunities for businesses, both small and large, to deliver capability inside the network, around things that we haven’t even thought of yet that we may want. As long as our vendors are able to operate in a modular open system approach, and that we’re able to integrate capability into that architecture in a rapid and easy to do methodology, we’re really going to be successful.”

The post With UNO, Army intends to stop battling its own network first appeared on Federal News Network.

Just as important as obtaining contracts with companies to help fulfill an agency’s mission, is the ability to end them properly. That’s the part the National Institutes of Health is apparently having some trouble with. The Department of Health and Human Services Office of Inspector General recently analyzed a handful of NIH contracts and found many of them were not properly closed out. To learn more about the review, Federal News Network’s Eric White welcomed Amee Wentz, Assistant Regional Inspector General for the Office of Audit Services with HHS OIG.

Interview transcript: 

Eric White
Just as important as obtaining contracts with companies to help fulfill an agency’s mission is the ability to end them properly. That’s the part the National Institutes of Health is apparently having some trouble with. The Department of Health and Human Services Office of Inspector General recently analyzed a handful of NIH contracts and found many of them were not properly closed out. To learn more about the review, we welcome Amee Wentz, Assistant Regional Inspector General for the Office of Audit Services with HHS OIG. Ms. Wentz, thank you so much for taking the time.

Amee Wentz
Thank you.

Eric White
Let’s just start out. What needs to happen when a contract is actually closed out? Are there procedures in place to make sure that things end where they are supposed to end?

Amee Wentz
Right, but first, let’s just talk about and define, like, what a closed contract is. A contract is actually closed when the contract is physically completed, which means that the contract has reached its end date, and the contractor has satisfactorily provided the goods or services. So, once a contract reaches its end date, federal agencies are required to begin the closeout process. Depending on the type of contract that was awarded, for example, a fixed price contract or cost reimbursement contract, the timeframe to close that contract can vary between six months to three years. So, during the closeout process, federal agencies are to adhere to the Federal Acquisition Regulations, or, we like to call it the FAR, which establishes the administrative requirements for closing contracts. So, depending on the type of the contract, the FAR has different administrative requirements that must be met. Some examples of these administrative actions that must occur are things like the agency conducting a contract audit to include reviewing contract funds, ensuring classified material has been properly disposed, ensuring all patent and royalty information is cleared, and ensuring that the contractor has submitted its final invoice to the agency and all completed work is specified in the contract.

Eric White
Gotcha, okay. So, it’s kind of different for each contract there. What specifically could happen if that is not done properly? You know, since there are all these different procedures, I guess there’s a lot of different things that could go wrong if an agency doesn’t do its due diligence and make sure that it closes it out properly.

Amee Wentz
Ultimately, if a contract is not closed properly, federal funds are at stake. You see, the contract closeout process is a very important step in the contract lifecycle, because it is the government’s last opportunity to detect and recover improper payments. So, when agencies don’t close contracts, or they don’t close them properly, federal government funds could be at risk. Specifically, when contracts are not closed, the agency that issued the contract is not afforded an opportunity to redirect unused funds to other projects or to return funds to the government. And if the government can’t confirm that a contract is completed properly, it is at risk of awarding another contract to that same contractor in the future.

Eric White
What parts of the closeout requirements was NIH missing or having the most trouble with? Was there a particular aspect of the closeout process that they were missing?

Amee Wentz
We found that NIH did meet all the close out requirements for one of the 30 contracts that we reviewed, and that contract was valued at approximately $140 million. Now, for the remaining 29 that we looked at, we have an appendix in our report, which is available on the HHS OIG website. And that lists all the various administrative closeout requirements that were not met for these 29. Some examples of these requirements that are in our report were things like, closing documents did not exist, contract desk reviews, or audits — which would ensure cost incurred during the lifecycle of the contract were allowable — were not conducted. And finally, a signed contract or closing statement, which could protect NIH from future claims or legal issues, were not obtained. Again, these 30 contracts were selected from an initial population of contracts where we suspected the closeout process had not occurred. So, we shouldn’t walk away from this audit and say, okay, 97% of all of NIH contracts are not closed properly. That’s not the case. We were just trying to find areas where NIH could improve its closeout process and have better stewardship of government funds.

Eric White
We’re speaking with Amy Wentz. She’s with the Office of Inspector General for the Department of Health and Human Services. So, that’s interesting that you said that you analyze contracts where you thought there might be some issues with closeout procedures. How do you determine that? I’m just curious about, you know, was it certain areas where you see most contracts have problems being closed out? Was that the idea?

Amee Wentz
So, actually, it’s based on the contract closed date. So, to conduct our audit, we needed to look at NIH files to see what requirements were being met and what requirements were not being met. So, first, we had to obtain a list of contracts from NIH, and we narrowed that list to contracts that were overdue for closeout, meaning that the end date of the contract was three years or older. So, we took that narrowed list, and that consisted of a little over 29,000 contracts valued at approximately $12 billion. And we narrowed that and focused on high-dollar contracts. And from those high-dollar contracts, we looked at 30, and those 30 totaled $2.1 billion. And, so, for those 30 contracts, we looked at 25 that were overdue for closeout, based on the date, like we discussed, and then five that were identified as closed, according to NIH records. So, you ask, why do we look at closed contracts? Well, we reviewed contracts that were identified as closed to determine whether NIH had in fact correctly followed all the administrative closeout requirements. And, so, we use that FAR, the regulations we discussed earlier, and we reviewed all 30 contract files to determine if NIH had met the federal closeout requirements, and if not, why.

Eric White
So, you said the federal funds are at stake when contracts aren’t closed out properly. Was there any finding, any part of your review process of seeing that, you know, some federal funds were misspent due to these contracts not being closed out properly?

Amee Wentz
So, our goal was to look at whether or not NIH was following the administrative closeout requirements. Our goal was not to look at whether the contractor completed their contractful obligations or whether they spent the money correct. But what we did identify and what we did find is that, like I said earlier, funds are at risk if NIH doesn’t close that contract timely, and so therefore, they can’t repurpose or reuse those funds if they haven’t closed the contract, and they don’t identify any unused funds.

Eric White
Let’s talk about that why at the end. Why was it that some of those contracts weren’t closed out, in talking with officials at NIH? What were some of the reasons that they brought to you?

Amee Wentz
So, ultimately, contracting officers at NIH have the authority to enter into, administer and close contracts. They’re the ones responsible for ensuring that contracts are closed in accordance with federal regulation. So, during the process of reviewing the 30 contracts of our audit, we identified some processes and some NIH policies that could be improved in order to assist NIH with closing contracts. In our report specifically, we recommended that NIH update its internal policy manual and establish activities for monitoring the contract closeout process. And of course, we recommended the NIH do close those 29 contracts that were reviewed. And let me just say, NIH has been very responsive to our audit, and has already begun implementing our recommendations. Case in point, NIH set a date of December 2024 to close out the 29 contracts that we recommended they close. Also, they’ve already set dates of December 2024 and June 2025 to implement our recommendations pertaining to updating their policies and procedures. And the June 2025 date they’re using to update its oversight accountability of the closeout process. Strengthening that closeout process and the oversight of that process should assist NIH in the future with closing contracts and ensuring good stewardship of government contract funds.

Eric White
Amee Wentz is with the Office of Inspector General for the Department of Health and Human Services. Thank you so much for joining me.

Amee Wentz
Thank you so much.

Eric White
We’ll post this interview along with a link to her report at federalnewsnetwork.com/federaldrive. You can also find it wherever you get your podcasts.

The post NIH could use a little more follow through when it comes to ending contracts first appeared on Federal News Network.

Conflicts of interest in federal contracting can happen in a lot of ways. In one tangled case, an award winner’s subcontractor turned out to have a conflict of interest. And it may have scuttled the deal. Haynes Boone Procurement Attorney Zach Prince joins the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin
This one’s a little bit convoluted, but you’re always good at sorting them out for us, Zach. This was a [Center for Medicare and Medicaid Services]  award for what to whom?

Zach Prince
So this was the third iteration of a CMS award. This was a protest by a company called the Square Group (ASG) of an award to its competitor Cogent. This award was for health insurance marketplace and financial management analytics. So analyzing data generated from other CMS contracts, among other things.

Tom Temin
All right. And it didn’t initially go to Cogent, it went to ASG first.

Zach Prince
That’s right. So ASG got this award in 2023. And then Cogent brought a protest at GAO. Before GAO got to a decision there, the agency took corrective action, held exchanges with Cogent and ASG, got revised quotations, and then decided that actually it was going to award to Cogent which had a substantially lower price. So at that point, ASG protested here at GAO.

Tom Temin
Yeah. And they had a lot of grounds. But there was only one that really kind of stuck and took them both through a long process.

Zach Prince
A lot of these protests, especially at GAO, you go in and you argue basically everything. As Judge Thompson said in one of his decisions from the Court of Federal Claims recently, “throw the throw spaghetti at the wall and hope something sticks.” That’s how a lot of protests go. This though, GAO was struck by the organizational conflict of interest (OCI) issue, and that ultimately is what it decided in favor of for ASG.

Tom Temin
Right, so now, nobody has the contract while CMS figures out what to do. But in this case, the organizational conflict of interest wasn’t with the main contractor, Cogent; it was with one of its subcontractors. Explain what was going on there.

Zach Prince
So there are a couple of categories of OCI. Organizational conflicts of interest can be impaired objectivity — which is what happened here — biased ground rules, or unequal access. So some of those are things that can be mitigated, usually impaired objectivity, which means basically, that you’re evaluating your own work from another contract. Can’t be mitigated, unless it’s a subcontractors issue, and then potentially the subcontractor can be firewalled off. That’s what the issue was here. A Cogent subcontractor, that it was having do quite a bit of the work apparently, had been running a separate contract for CMS supporting the federal exchanges, or healthcare.gov, where it was generating the data that it was then going to be validating under this new contract. Classic, classic impaired objectivity OCI; there was a proposed mitigation strategy. But on review, GAO decided that strategy just wasn’t enough.

Tom Temin
In other words, this subcontractor was going to be evaluating data that it itself generated, not in relation to its direct work for CMS, but in its work as a subcontractor to Cogent, which would have ended up in the same place.

Zach Prince
You can’t have a situation where you’re evaluating your own work, or where somebody who’s part of your team is evaluating its own work. It is, at least optically, a major problem where the agency should not be able to trust or can’t trust the independence of that assessment. And so they proposed a mitigation strategy. They said, ‘we’re going to take this up, and we’re going to firewall them off.’ So they’re not reviewing that one type of data, payment data, that was generated from the other contract. And the agency said, ‘okay, that’s good enough.’ But when GAO looked at this during the protests, they said, ‘hold on, there are several categories of data that are at issue here. There’s payment data, there’s enrollment data, there’s potentially other data, all of which are data that were generated by the subcontractor under the other contract. Your proposal for mitigation only dealt with one category, it didn’t deal with these other ones.’ So for the agency to have accepted the mitigation proposal as is, where it only dealt with one category that was irrational. And that was the basis to sustain the protest.

Tom Temin
We’re speaking with Zach Prince, he’s a partner at the law firm, Haynes Boone. Would the subcontractor have known about what’s going on, because it probably would have, because don’t subcontractors know when they’re part of a team that is bidding by the prime for a new contract?

Zach Prince
They absolutely should have known what’s going on. And the prime, Cogent, really should have known about this issue, too. The issue was brought to their attention during the evaluation also, by the technical evaluation, and that’s when they came up with this mitigation strategy. They didn’t reflect this mitigation strategy in their technical proposal, which by the way, they had a couple rounds of chances to provide a revised proposal. So they’ve got a technical proposal that says nothing about segregating these guys out. And in fact, they call for hundreds of hours of these guys’ time, the subcontractor’s time, doing valuation tasks. That was directly contrary to what they said in the mitigation plan. They just didn’t fix the issue when they had opportunity.

Tom Temin
Yeah, some things simply can’t be mitigated, in other words.

Zach Prince
It could have been mitigated if they did it early enough, if they came up with a way that this sub just wasn’t doing that work. Some things certainly can’t be. If the prime was the one who had generated this data that they’re then evaluating, you can’t mitigate it by firewalling yourself off, it’s too much of the work. Sometimes, if it’s a tiny part of the scope of work, maybe you can subcontract that as the prime, but most cases, you can’t. But in this case, it just wasn’t reflected in their technical proposal, which is another big issue GAO had with the agency’s conduct.

Tom Temin
Even if they could say, well, this subcontractor will continue to evaluate this data. But this particular sliver of data which they generate under this contract with us, they will not be. We’ll find somebody else to evaluate it. Even that doesn’t seem to totally mitigate it, because you still have this business relationship, and it just doesn’t sound clean no matter what you do in some cases.

Zach Prince
And I think it’s rational for the agency to determine that that is something that can’t be mitigated if that’s what they wanted to do. The finger is on the scale heavily for the agency, as long as it’s making a rational decision. The problem is here, they weren’t making a rational decision. It just wasn’t reflected in the technical proposal, which showed that, basically, if they did this mitigation, what they proposed was unworkable. And the mitigation itself just didn’t go far enough. Because it wasn’t just a sliver of data that was the problem. It was this wider set of data.

Tom Temin
And so now nobody has the contract. GAO just, I guess, invalidated it. What happens in these situations when you have too close bidders. One was better on price, but it has a conflict of interest. Can the agency say ‘okay, we’ll go back to the first company, Square Group?’

Zach Prince
The agency has got a couple of options. And the most outlandish option — this is definitely not happening — is the agency just says ‘we don’t care what GAO says.’ They don’t have to; GAO just makes recommendations. But if you don’t do what GAO says, then you’re going to end up in the Court of Federal Claims. And your agency is going to end up in front of Congress explaining why they chose to ignore GAO.

Tom Temin
Plus it could be two more years till you get any of the work done.

Zach Prince
Right. I mean, if they choose to ignore GAO, then they can just let Cogent keep going. And then they get the work done. And sometimes that happens in really sensitive procurements. But it is really rare. They could also go back now and say, ‘let’s reopen discussions. And we’ll get a new proposal from Cogent, we’ll get a new proposal from ASG. ASG will probably give us a much better price. Cogent will give us a different technical proposal that deals with this issue.’ And then they reevaluate at that point. That’s the more complicated way to do it. I’m not sure right now, how the work’s getting done. Maybe there’s a bridge contract from the incumbent. I think this probably is ASG continuing to perform because I think they were the incumbent, so maybe the agency goes that route.

Tom Temin
All right, so we could call this one be fair or be square. Pun intended.

The post Why bidders for federal contracts need to deal with conflicts of interest early on first appeared on Federal News Network.

Senate Armed Services Committee leaders filed their version of the National Defense Authorization Act for fiscal 2025 on Monday, which was passed behind closed doors last month in a 22-3 vote. The bill is now heading to the Senate floor for consideration.

The legislation includes an amendment to a portion of Section 1521 of the defense bill for fiscal 2022, which centralizes the procurement of cyber products and services across the Defense Department. 

The fiscal 2022 defense bill states that the DoD components can’t independently purchase cyber services unless they can buy services at a lower per-unit price than what the DoD chief information officer office, which leads department-wide procurement of cyber services, offers. The components can also procure cyber services independently if the DoD CIO office approves the purchase.

If passed, the amendment included in the 2025 defense bill would allow DoD components to buy cyber services independently if they can demonstrate the “compelling need that the requirement of the product has due to its urgency, or to ensure product or service competition within the market.”

Sen. Eric Schmitt (R-Mo.), who has long expressed concern about the Defense Department’s increasing reliance on Microsoft for its cyber products, initiated the amendment.

“DoD CIO has used this authority to create a one-size-fits-all approach to all DoD components, causing serious concerns related to a single zero-day flaw being used to create massive disruptions across DoD’s networks. The amendment returns decision-making power back to DoD components, so they can adopt tailored cybersecurity approaches based on the threats they face,” the amendment summary shared with Federal News Network says.

In May, Schmitt, along with Sen. Ron Wyden (D-Ore.), sent a letter to the Pentagon inquiring about the department’s push to implement Microsoft’s most expensive licenses, known as E5, across all components. The Pentagon already widely relies on Microsoft products and services but it has been considering mandating all components to upgrade to Microsoft’s E5 license as part of its effort to achieve the target level of zero trust by 2027.

“Although we welcome the department’s decision to invest in greater cybersecurity, we are deeply concerned that DoD is choosing not to pursue a multi-vendor approach that would result in greater competition, lower long-term costs and better outcomes related to cybersecurity,” Schmitt and Wyden wrote.

Another amendment, also spearheaded by Schmitt, would require companies that conduct software development in China to notify the Pentagon if they are required to disclose any software vulnerability to any Chinese agency, such as the Ministry of Industry and Information Technology.

“PRC security laws mandate that cyber companies with presences in China must report any flaw discovered to their government, potentially giving state-sponsored hackers a treasure trove of zero-day flaws to exploit. This bill would ensure that companies doing business with DoD that have presences in the PRC report the same information to their US-based arm as their PRC arm reports to the CCP government,” the summary of the amendment provided to Federal News Network reads.

The provision amends Section 855 of the fiscal 2022 defense policy bill and is identical to the Defense Technology Reporting Parity Act, which Schmitt filed on the floor prior to the 2025 defense policy bill.

The two amendments signal lawmakers’ growing concern about the Pentagons’ reliance on a single vendor for its cybersecurity products.

The fiscal 2025 defense policy bill authorizes a topline of $911.8 billion, which exceeds spending limits imposed by the Fiscal Responsibility Act passed last year.

Sen. Jack Reed (D-R.I.), chairman of the Armed Services Committee, voted against the legislation due to the funding increase that would break the spending caps.

“I regret that I needed to vote against passage of this bill because it includes a funding increase that cannot be appropriated without breaking lawful spending caps and causing unintended harm to our military. I appreciate the need for greater defense spending to ensure our national security, but I cannot support this approach,” Reed said in a statement.

The House passed its version of the defense bill last month, and the two chambers will have to negotiate to pass the bill before the end of 2024.

The post NDAA amendment to give more authority to DoD components to buy cyber products first appeared on Federal News Network.

The Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) is exactly what it sounds like: a mandate for reporting. There’s also a cyber reporting rule from the Securities and Exchange Commission already in effect. Is it overkill? Executive Vice President for Policy at the Professional Services Council Stephanie Kostro shared more with the Federal Drive with Tom Temin.

Interview transcript:

Tom Temin
Sounds like contractors are waking up and looking across the landscape at reporting rules. And everywhere you look, there’s another one.

Stephanie Kostro
I have likened to this set of proposed rules and final rules, etc., as a flurry. And it really has been a plethora of cyber incident reporting requirements coming down, not just for companies across the economy, but specifically for government contractors. And we’re following I think it’s 16 separate actions very, very carefully. And those things range from exactly what you said, the SEC had a rule go final last December, that talked about reporting of significant cyber incidents, and it already looks like there are companies out in the economy who are not paying attention to that rule, and has been called to question in several ways in the courts. And so as we move forward with this CIRCIA proposed rule, PSC submitted comments. I think they received close to 300 very substantive, meaty sets of comments. It really is an active space, and contractors are watching it very, very closely.

Tom Temin
Because there doesn’t seem to be a lot of coordination among the agencies that are imposing these rules. Here, you’ve got two we just mentioned that our cyber alone and there might be more coming.

Stephanie Kostro
That’s exactly right. Last year, the second half of 2023, the Office of the National Cyber Director — that’s an office within the White House — released a request for information, asking the public, ‘how can we better harmonize these cyber requirements,’ not just reporting requirements, but across the board. And we, along with others provided some substantive feedback on that. But the landscape continually changes, and we’ve seen lots of proposals introduced, since those comments were due so in the last, say, eight to 10 months, even more cyber incident reporting requirements have come across the transom. Courts are challenging, companies are not necessarily following the rules. It’s really sort of I would liken it to a maelstrom of activity. We are very concerned that some of these reporting requirements might be overly burdensome, particularly on government contractors whose very livelihoods depend on federal work, and they want to be compliant. It’s just what rules should they be more compliant with? It goes back to the old literary references to all these things are created equal, but some are more equal than others. Which ones take precedence for government contractors, which ones should really be the name of the game? And we have some thoughts on that. PSC stands ready to help with collaboration, to help with cooperation with the government to figure out what actually makes our nation more cyber secure, and what incidents should be reported. What ones have the potential to materially impact either the company or the work that the government needs to perform? And so as we move forward, we, alongside several other associations and other companies, want to be helpful in this regard. There’s just so much going on?

Tom Temin
Well, I guess the SEC, to use that example, can only ask publicly traded companies to report and then I presume — I haven’t read their rule — but it would be any incident that might materially affect their being invested in or something, some result that they would have that investors would make a decision on. But in the case of the Cybersecurity and Infrastructure Security Agency, they would be concerned about impacts on the cybersecurity operations and the continuing operations of infrastructure providers. So different purposes for the rules. What’s PSC’s main commentary here? What are you saying, in general, to all these agencies?

Stephanie Kostro
Really happy that you mentioned that, Tom, because some of those government contractors are publicly traded companies. So they are subject to both sets of rules. And our position is, what is CISA trying to do in this space? We want to be supportive of the maintenance and sustainment of government operations, to make sure folks are more cyber secure. So we are hoping to work with them on what entities should be covered, what kinds of cyber incidents should be covered. And to be honest CIRCIA also, this proposed rule talks about ransomware payments or ransom payments. As we move forward, information about payments, etc., that’s important. But does that actually make you more cyber secure? it’s really unpacking what causes the cyber incursions and incidents and preventing them from starting even in the first place. And that is what makes us more cyber secure. And that’s what we at PSC would like to focus on.

Tom Temin
We’re speaking with Stephanie Kostro, executive vice president for policy at the Professional Services Council. There’s another rule reporting situation, of different context, and that is a final rule from the Small Business Administration, getting rid of the idea that you can self-certify that you are service-disabled veteran-owned. And there is a site at which people could do that. That site is not working too well. So what are you finding here? What’s going on?

Stephanie Kostro
I love that you bring this one up as well, Tom, because comments were due here on July 8, regarding this SBA direct final rule, and it’s something that’s not going through their proposed rulemaking process. It’s a direct final rule. And it would implement a section of the fiscal year 2024 National Defense Authorization Act, which eliminates the ability for these service-disabled veteran-owned small businesses to self-certify, to say that they are in fact, service-disabled veterans who have ownership stakes in these small businesses to go through the [Veteran Small Business Certification (VetCERT)] program. We, on the face of it, are supportive of this. It’s the timelines that we are questioning. And here’s the rub. And you mentioned it, Tom: This direct federal rule goes into effect August 5. If you go to the VetCERT program website, they are taking it down to upgrade it on August 1, and it estimates that it will be out for about a month or so, potentially longer, to do system wide upgrades. And what they say is if you’re trying to apply for certification as a service-disabled veteran-owned small business, please wait until this upgrade is over. The issue that we’re facing here is if the website is down and you can’t have new applicants applying for certification here, you’re going to run into a backlog of folks looking for certification. And we wonder whether the SBA has the manpower and the resources necessary to work through that backlog as quickly as they need to. Because, as of October 1 of this year, if you want to get credit for participating as a service-disabled veteran-owned small business, or you have that kind of business among your subcontractors, if you want to claim credit for participation, they have to be certified through this program. So it’s one of these things where I am not entirely sure that, on the face of it, it could be the people writing this direct final rule didn’t talk to the website folks. That happens a lot, not just in government, but across the economy and in companies too. But I hope that they can look at this and go, ‘Hey, maybe we can we can find some wiggle room here for companies to be able to comply with this final rule in a timely manner in a way that makes sense.’ Currently, it just looks like they’re gonna run into a brick wall here.

Tom Temin
Yeah, sounds like the technology and the policy aren’t quite aligned, and not the first time we’ve seen that happen.

Stephanie Kostro
Exactly, exactly. Again, that’s not solely the realm of the government; this happens in companies too. But I would like the SBA, when they read our comments, to note that this is really not a great situation. And they have the power to change some of this.

Tom Temin
All right. And in the couple of minutes we have with you, I wanted to go to a third topic, and that is some of the National Defense Authorization provisions in the House version. And there is a little bit more inflation relief, temporary authority to help adjust for inflation. I’m presuming PSC is in favor of that one?

Stephanie Kostro 

We are very much in favor of that. This was a provision that was put into law last year, and it was extended again, and the House passed version of the National Defense Authorization Act for Fiscal 2025 would extend it again. This is temporary authority to allow companies to claim costs incurred for inflation related expenses. And so this is subject to the availability of funds — these kinds of provisions always are — we just like to have the ability for companies to recoup any unexpected expenses due to inflation. And we talked a lot about inflation two years ago, a year and a half ago, even a year ago, it still hasn’t come down to where companies had planned for it to be. And so some of these costs are much higher than they had anticipated and planned for.

Tom Temin
Right. There’s a pretty strong labor market in the United States. And that’s where a lot of the inflation you might see in professional services.

Stephanie Kostro
That’s exactly right, Tom, and we have a tight labor market where we’ve got more job openings than job seekers. And so, as we move forward, we’re gonna have to adjust how we think about labor. And I think we are all for paying laborers more, certainly a wage that they deserve, and even thinking through what the long term implications of this higher-than-expected inflation would be.

Tom Temin
And then there’s the pilot project that the NDAA would launch, and that is that the loser pays for protests, legal costs.

Stephanie Kostro
So this is sort of Groundhog Day for us, Tom, this provision, when if a protest lodged with the Government Accountability Office is denied, that the contractor would pay [the Defense Department] for costs incurred to defend the protest. This was the law of the land from the fiscal year 2018 NDAA; it was repealed. Studies have been done that this kind of approach isn’t the most effective. There aren’t a lot of frivolous protests. And a lot of times GAO comes down not with a clean denial of protest, but something in between where the government and the company work something out. And it’s really unclear to us what would count as a cost incurred by the department in defending a protest. And so, PSC, like we did last year when this provision was in the NDAA, stands ready to talk about negative impacts of protests and to figure out a way that we could help in this regard. I just don’t think rehashing old language is the way to go. And we’re looking to be helpful in that.

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The Office Of Management and Budget and General Services Administration have been fielding a data integration tool to help contracting officers. Dubbed Co-Pilot, it gathers data from various governmentwide procurement systems, and presents buyers with pricing histories, vendor information and other data to help their decisions. How’s the first month been going? The Federal Drive with Tom Temin gets an update from the senior advisor at the Office of Federal Procurement Policy, Christine Harada.

Interview Transcript:  

Tom Temin  And it’s been running almost a month now. And how has the take up have been so far for Co-Pilot?

Christine Harada  The take up in pretty good thus far. We had rolled it out a couple of weeks ago, as you indicated, and we have received a lot actually very positive feedback from contracting officers and acquisition professionals across the federal government. We’ve heard feedback and comments to the effect of words has been. And I think that it has been an extraordinarily useful tool. And I’d like to think that we also released it in a very good time from a seasonal perspective, if you will, as you know, a lot of federal government contracting does indeed happen in the last quarter of the fiscal year.

Tom Temin  And did you beta test it with a few poor souls ahead of time? Or did it simply launch? And if so, how many people have used it?

Christine Harada  We did beta test it with a few brave souls. And they of course, it provided us with some great user feedback around that. Since launch, we’ve had over 2500 unique users. And we’ve had approximately 1800 users who are using it on a regular basis.

Tom Temin  Wow. And briefly walk us through how it actually works. In daily situation. Say I’m a CO, I want to know what’s the best pricing or what are the pricing trends for product XYZ? What do I do? Do I have a window that I type XYZ into? Or what do they see?

Christine Harada  Yes, absolutely. So, it is just as you say, it’s a great tool, and it’s tailored specifically for the contracting officer and Acquisition Professional user base, if you will. It is available to any government user. And it brings together several key facets of both the contracting officer and Program Manager user journey. Everything from cost estimates to vendor research to quickly identifying government or agency wide contract vehicle that can be used to meet requirements. It is currently available only for federal use, but it is basically available solely for those particular purposes. It’s the product of years of user research, the team saw a need to help COs really rapidly procure the goods and services needed for COVID response while still aligning right to overall good federal taxpayer stewardship as well as category management principles. And over time, the tool has evolved from a dashboard to a more integrated web application that supports a lot more robust pricing and contract research, as well as bolstering the workforce’s ability to be able to get these contracts and services executed.

Tom Temin  And are people using it able to sail to put a cliche on here think outside the box, as the government seeks the so called innovative companies and people that are not doing business with the government, but might have great products and services the government could use, does it see anything outside of what’s already in the procurement systems in the area of market research, or I think a lot of COs, you know, run into trouble sometimes.

Christine Harada  So, it does indeed, include a find a vendor feature. And it’s specifically targeted for those vendors that are registered in SAM. So, you do need to be registered in SAM in order to be searchable for this particular user base.

Tom Temin  Right. And the vehicles are all in there also.

Christine Harada  That is correct. So especially for those contracting officers that may not have much experience or exposure to other contracting vehicles outside of their agency. That is certainly unique benefit for these agencies. If the tool enables the contracting officer to match requirements to both contracting vehicles, whether it be like with other agencies and or other government wide vehicles.

Tom Temin  We’re speaking with Christine Harada. She’s senior adviser to the Office of Federal Procurement Policy. And can you narrow it down? Suppose I want to know how just civilian agencies did with this or just DoD agencies did with a certain product? Can you put parameters? Or is all of the government wide data? Always in every search?

Christine Harada  It’s set up so that we want to make sure that we’re maximizing the data exposure. And so, it’s based on what are the common spend categories across the entirety of the federal government. And at the moment, the displays do, do show everything. So, it’s not that, you know, once you download the data, etc., you can filter it out yourself, but we wanted to make sure that we were broadening the aperture of the data as much as we possibly could so that contracting officers can see what else is all out there.

Tom Temin  But people don’t have to download datasets then normally to use it?

Christine Harada  That’s correct.

Tom Temin  Yeah, because that’s a pain in the neck. You know, you get all these crazy spreadsheets and different formats and then what do you do so this does that for you. You might say.

Christine Harada  It might be my it’d be a pain in the butt, you know, it might be a pain for some people. But if you’re a data nerd, like me or many other contracting officers, you know, I think it’s, I find that personally fun, but that’s just me.

Tom Temin  Right? Well, will grant you that much fun as you want. Yeah, I feel like downloading data. And how did this get developed? Was it an in house, you know, US digital service type of effort? Or did you adapt a commercial product?

Christine Harada  So, this capability was developed very much based on our government user base, fundamentally built from scratch because of the very vast nature and the number of data systems that we’ve got across the entirety of the federal government.

Tom Temin  Was it built by a contractor? Or was it coded, you know, in house, just out of curiosity.

Christine Harada  it was built by a contractor, and also beta tested as a Tableau dashboard. Because we knew that we wanted to make sure that we’re able to convert it to a web app for performance needs.

Tom Temin  Sure. And the name Co-Pilot, I don’t know about you, but every time I get on a computer to do anything, Microsoft is telling me to use Co-Pilot something that it developed in the artificial intelligence area. But you had the name first.

Christine Harada  Yes. You know, we liked the name Co-Pilot because it ties to the Acquisition Gateway, and it implies that it’s a way to support navigating the overall complex, you know, acquisition process itself.

Tom Temin  All right, and what is your plan for it? I mean, this is not touted as an artificial intelligence product. But it sure seems ripe for AI.

Christine Harada  That’s something that we’re still candidly exploring, you know, we are looking to expand both the features and the scope of this tool, including the data within it at the moment, it enables the user to search for products. And we do envision enlarging the scope, if you will to include services on the radar, we’re also looking to apply emerging technologies, for example, for natural language pairings. So, making it a little bit user friendly in that regard.

Tom Temin  Got it. And it sounds like it’s automatically updated. Because say NASA soup or a new GSA G whack is coming into the market. And as launched, those agencies would put the data online as they need fit as they see fit. And therefore, it would in a sense automatically be available to Co-Pilot fair way to put it.

Christine Harada  Yes, that’s correct. It’s the data is refreshed on a weekly cadence as we receive that data from agencies and the contracts.

Tom Temin  And what have people told you they wish could be improved with it so far?

Christine Harada  We’re trying to get the acquisition professionals used to it, period and get it you know, enhancing the adoption across the entirety of the workforce. Two things. I think agency professionals are saying that they would like to see an increase in the scope of data specifically around services, which of course we’re working on. And they’re also interested explore AI capability itself with this with the Co-Pilot tool.

Tom Temin  Right? And that’s where you get into possible vendors that aren’t yet in federal contracts or in SAM because artificial intelligence companies are kind of like dandelions on my lawn.

Christine Harada  For our purposes, we’re sticking with Sam registrants. You know, we absolutely do need the vendors to be registered and SAM, you know, with respect to other unregistered, you know, potential vendors, if you will, there are other methods that we’re using. So, for example, you may be familiar with the Department of Defense’s trade winds marketplace, which is, you know, exposes newer vendors, potential vendors, to the Department of Defense market. So, we’ve got other mechanisms like that we are first and foremost, though, focused on ensuring that we’re best supporting our acquisition professionals with the existing vendors already that are indeed registered in SAM. There plenty of vendors in there, number one, but also plenty of vendors would also like to expand their offerings and services to the federal government. And so, we view this as a great way for them to be able to gain that visibility with those other agencies that they have not historically served up until this point.

Tom Temin  And one final question, what’s your plan to get more than just 2000 people? There’s probably, you know, 40,000 COs, 1102s just in DOD alone.

Christine Harada  Sure, of course, it’s actually 40,000 COs and contracting presses across the entirety of the government as well as 100,000 program managers. So, we are doing a number of things. Number one, we’re doing monthly demonstrations. Number two, we’re also holding office hours to try to walk folks through the tool itself. We have also convened the frontline forum. And those members of the frontline forum have been helping us with evangelizing, if you will, the capabilities of the tools. We’ve also been doing agency roadshows, as well as social media outreach via the acquisition gateways, we’ve also been engaging a lot of other groups and communities of practice. So, in addition to the frontline form that I mentioned, with external entities, like ACT, IACT, for example, and so we definitely view this as a marathon and not a sprint as we ensure that we’re steadily building out the user base. It is my view, I think our view that the benefits and the power of the tool is amazing, just with products itself, and so I do think that that natural enthusiasm will enable us to see a steady uptick not just in visitors who are curious about the tool itself but also a true adoption.

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Schooner recently received the Coalition for Government Procurement’s Sustainability – Green Excellence Award for his thought leadership on the nexus between federal procurement and sustainability. He outlines key initiatives and policy developments advancing green acquisition in the federal market. He also compares federal green procurement with efforts at the state level and internationally.

Finally Schooner discusses his most recent book recommendation, Craig Whitlock’s Fat Leonard: How One Man Bribed, Bilked and Seduced the U.S. Navy. The book tells the remarkable story of a wide-ranging procurement scandal. It is a cautionary tale of susceptibility, lack of accountability, and individual and organization ethical lapses.

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Voyager Space has entered into an agreement with NASA’s Marshall Space Flight Center to help develop an airlock for the Mars Transit Vehicle, also referred to as Deep Space Transport. It’s a 12-month study that will look at the applying the concept of Voyager’s Bishop Airlock design, currently being utilized on the International Space Station, towards a future mission to Mars. To learn more, the Space Hour host Eric White spoke with Marshall Smith, Chief Technology Officer for Voyager Space.

Interview Transcript: 

Marshall Smith  So, basically, when I was working in NASA, and NASA has always been on the plan to go to Mars. Or, you know, if you go look back at the legislation back in 2010, you know that the end goal is to go to Mars, we are going to the moon, but all in process of going to Mars. So one of the things that that’s really important and going to Mars is you need to be able to keep the mass as low as possible, the amount of things that you push out to Mars and back, we have developed an airlock that we actually self-funded and put on the ISS International Space Station. One of the tasks that it does is ejects garbage, it gets garbage away, and we can point it wherever we want to and, and get garbage out of the ISS, which is a really big deal. And so, if you’re going to be traveling to Mars, and back for, you know, many, many months along the way, mass is really important. So, when we look at how do you get rid of the garbage, this is one of the ways you can do that. So, we’ve been talking with NASA, NASA has been talking to us Marshall Space Flight Center about the ability to take the Bishop Airlock and develop a smaller version of that that can be used on the Mars transit vehicle. That’s the vehicle that’s going to go take crew and cargo from here, from the Earth to Mars and back.

Eric White  So, was it that feature of the Bishop Airlock design the ability to dispose of trash? That is, you know, in a controlled manner? Was that the main reason why you think that they are interested in it for this long journey where you know, the humans they’re going to generate some waste while they’re while they’re taking that trip?

Marshall Smith  Yeah, actually, that is their primary reason. You know, obviously, the bishop airlock, we can talk about that in a minute, if you want about all the things it can do it can do payloads and launch payloads into space and those types of things. But when you’re on a trip between Earth and Mars, you’re probably more functional. I’m going to use it as a trash injection system. There are some other things that can be done with it as well. And we can we’re going to look at some of those opportunities as well. But I think that’s their primary interest.

Eric White  Yes. And you did have that correct. I would like to get a little bit more into the actual Bishop Airlock design itself. What else can it do? And are there other things that I can do that would be utilized on a mission to Mars?

Marshall Smith  Yeah, so let’s talk about Bishop a second, a second. First of all, as I said, Before, it was a self-funded program, you know, we looked at the ability to launch payloads and to do pilot and you know, a modified payload, do things with them and put them out and expose them to vacuum. And, you know, Voyager came up with this idea of building an airlock. And this is a very large airlock, actually, it’s about five times larger than the current size airlock, that is that is on the vehicle. On the ISS. It’s a four cubic meter bell shaped canister, if you will, that attaches the tranquility module on the ISS. It uses the ISS arm that came with the arm to go down and grab the canister, if you will, the Bishop Airlock, and we’ll pull it away. And they can actually move it around and point in any direction that that you want to maybe point at, particularly if you have payloads that want to look a certain direction, or you want to launch payloads in a certain direction, or if you wanted to launch trash so that it burns up appropriately, and then doesn’t get you know, in the way of hitting anything on the ISS or even being close to anything on the ISS or any operations that are going on. And use as a berthing port, which is different than a docking port. It’s actually much larger, it’s pretty large, I think it’s about six feet seven inches, or Americans are about two meters, or for Europeans of others. And the size itself is kind of a common berthing mechanism that CBM which allows it to be very large, you know, an astronaut can actually get in the, the actual and put his, his or her arms out. And, you know, stretch around and move. And one of the cool things about it is there’s a lot of volume in there. So we can actually put a lot of payloads inside this, we can work in a shirtsleeve environment, because when it’s actually on the ISS, there’s a hatch and the hatches opened up and so the crew can go in and work and assemble payloads and check things out and make sure everything’s good to go and close the hatch and then you can depress it, and the arm will then move it away and point it wherever it needs to be pointed. And the other thing that it has is the ability to actually have external payloads mounted to the side of it as well. for a longer duration type of activities that you want to do.

Eric White  We’re speaking with Marshall Smith. He’s the chief technology officer for Voyager space. And so is this the I imagine this isn’t the sort of thing that was on the ISS when the ISS was first put up. I mean, the ISS is a giant Lego project anyway, it was this something that was put in after the ISS was already in orbit.

Marshall Smith  Yeah, actually, it’s only been up for about four years or so three or four years, we launched this, this was an idea that we had, we went to NASA and said, hey, we would like to do this. So, this is actually self-funded, commercially owned and operated by border space, it’s one of the only commercial properties, they may be the only commercial property on the International Space Station that is owned by another company, not a government. So, we came in assets. And we believe this is a really good concept that can offer opportunities to do payloads and get more commercial activities going. And it’s done just that. And like I said, it’s been a very efficient way to use and expose systems to space and vacuum and to deploy payloads, etc. Those types of things.

Eric White  And to throw a curiosity question in there, you had mentioned some of the reasoning why you would want to be able to aim where you’re actually shooting off any trash into space, you know, for obvious reasons, you don’t want to hit anything, but it was that you know, something that NASA was actually looking for. I know you said you approached them. But was that something that they were like, oh, wow, that would be a big help.

Marshall Smith  Actually, that kind of developed, you know, we were coming at it from the standpoint of payloads and being able to deploy payloads and launch payloads in space. But the whole concept of getting rid of trash. Trash management is a really big activity on the International Space Station, because obviously, humans create a lot of trash. And we do the best we can to keep that down as much as possible. But the only time you can really get rid of trash is when you have a cargo ship come up, it brings on more cargo, and then you can pack the trash into the cargo ship, and then it can be deployed and burned up and in the atmosphere. Well, if there’s a way to get it out quicker and easier, then that’s better. So, we developed a squirt like if you will, a trash bag that we can actually put on the inside of the Bishop Airlock, and then turn around and deploy it and get rid of that. And that became very interesting to NASA, because it helped really helps dramatically with the trash management system.

Eric White  It’s Venus’s problem now, right?

Marshall Smith  It burns up. But if we’re on the way to Mars, then then obviously we’ll want to point it in a way that maybe gets incinerating the sun eventually, or something along those lines.

Eric White  Gotcha. Okay. And so yeah, let’s talk about the future in that trip to Mars, the design for the new airlock would be categorized as the Red Knight. And allow me to oversimplify again, you said you want to know they want to a smaller version of the Bishop design is it just going to be a matter of just shrinking down every element to fit whatever vehicle is going to be used? Or are other things going to be factored in?

Marshall Smith  Pretty much, you know, we’re looking to maintain the belt jar shape, and we have the form factor itself, the seals and mechanisms probably can be reused. We’re also going to look at some lessons learned from the ISS and dealing with you know, disposing wet garbage and those types of things. You know, when we, when we started doing it, we learned a few things, oh, we got to make a little modification here or there. So, we’re going to make some opportunity, the opportunity to put some upgrades in there and make sure that the system can operate as best it can in that environment. It like said it will be designed to be smaller, because, you know, on your way to Mars, you’re really just looking to probably eject trash maybe on a weekly basis. You know, because every grand you carry unnecessarily is a required skill to be the push that system along. So, we want to we want to get rid of the trashes relatively soon as possible.

Eric White  And not so much worried about any payloads. Right? I imagine that nobody they’re not going to make a pit stop or anything along the way, are they?

Marshall Smith  It’s kind of hard to make pit stops. Once you do what’s called a trans Mars Mars injection burner, TMI, you’re not really stopping because then you have to turn around and do a burn to slow yourself down. So that requires a lot of fuel, so there’s really no points to stop along the way.

Eric White  Marshall Smith is Chief Technology Officer for Voyager space.

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The Supreme Court rule last week that people subject to administratively-rendered fines and penalties have the right to a jury trial. The ruling had to do with the Securities and Exchange Commission. But as dissenter Justice Sotomayor said, it could upend the operations of many agencies. Federal sales and marketing consultant Larry Allen joined the Federal Drive with Tom Temin with his reaction.

Interview Transcript: 

Tom Temin
We know the SEC has been involved in Donnie Brooks for a number of years over its administrative power. A lot of people see its administrative judges as making the agency its own judge and jury in cases. What’s the big takeaway for federal contractors here.

Larry Allen
Tom, I think the big takeaway for federal contractors is precisely because agencies like the SEC act as their own judge and jury in a number of administrative functions. And I think the ruling here in SEC v. Jarkesy has wide ranging implications for government contractors. First, government contractors, like other businesses are subject to fines from [Occupational Safety and Health Administration (OSHA)], the Department of Labor, from the EPA, we also know that there are special penalties that government contractors can come upon in the conduct of their government business. So I’m not saying that all of these things immediately become suspect. But I think that there certainly is going to be a review of them to see which ones apply to government contractors in specific situations. I think further, this ruling is just one of several, Tom. So this is not an isolated incident. This is one where you have federal courts generally rolling back the power of the administrative state saying to the administrative state, Hey, if you go too far afield from what Congress gave you the authority to do, we might clip your wings on that. So stay a little closer to what Congress intended.

Tom Temin
In the meantime, though, whatever regulations are out there, whatever penalties might be served by an agency to a contractor, you’re not absolved until a court case says you are at this point.

Larry Allen
Well that’s right, I believe so. I think if you’re a contractor, and you find yourself in one of these administrative tribunals, facing fines or other adverse actions, you ought to talk with counsel to see if this case, the precedent set by the Supreme Court last week affects your business. If so, you may very well be able to get out of a tribunal and into a court, very much have your day in court, quite literally, which really is what the case the court ruled on last week was all about. They didn’t tell Jarkesy, Hey, you’re good to go, you’re not good to go. What they said was that he’s due a day in federal court to defend himself. And only if that court then decides that he should be found guilty, will that be the proper way of bringing about justice.

Tom Temin
And the reality is that in the case of false claims, act, types of penalties or whatever it might be in contracting. In reality, companies balance the cost of litigation and going to court, which can take years and Lord knows how much in legal fees versus what they have to pay out. And if there’s no prejudice after the payment is made, then they make that calculus and go ahead and pay it.

Larry Allen
Oftentimes they do. We see a lot of things, particularly in the False Claims Act realm, settle out before anything really goes to trial, Tom. But I think that this ruling potentially has other implications for contractors that are going to be a net positive, and that is regulatory groups. In this case, the FAR Council are certainly going to have to take notice of the court’s ruling in this case, decide what their own further rulemakings are going to be and make sure that they meet the standard, the Supreme Court set here and the other federal works are setting in similar fashions. And that’s good news for contractors who have been facing a Macy’s Thanksgiving Day Parade of new government contract rules. And maybe this will slow that down a little bit, and challenge some of those rules that maybe aren’t so transparently tied to an underlying statute.

Tom Temin
We’re speaking with Larry Allen, president of Allen federal business partners. And meanwhile, we are in the fourth quarter soon of the buying year for the federal government. We saw recently the sleepy Joe versus convict Don [Trump] debate, for whatever that was worth. So the country is preoccupied, the government is preoccupied in many way Congress is preoccupied in many ways. So what should contractors assume this fourth quarter?

Larry Allen
Tom, my advice to contractors for this fourth quarter is to assume nothing. Make sure that you are dotting your I’s and crossing your T’s. And there are a couple of ways that that manifests itself. One is, don’t assume that your customer knows how to buy from you. This is something we talk about this time of year, every year Tom. And yet, when I’m out talking to clients, and even people in government, it still comes up to the top. So if you’re a government contractor, you want to be prepared with one or two easy and fast ways that an agency can buy from you. Related to that, contractors should never assume that the project they’re working on is as important to the government as it is to them. I’ve found this a lot with companies, particularly small businesses. And I understand that for smaller companies, one or two projects between now and the end of the fiscal year, makes your year or doesn’t make your year. And it’s important to press on those and get them done if you can. And by the same token, you have to understand that your agency customer and their teams, they’re working on probably dozens of procurements like yours, some of which may require more time and attention, and be higher on the priority list. So you as the Contractor have to be the one that’s riding herd on your opportunity, if you want to get it across the finish line.

Tom Temin
And contracting officers themselves get busy. Is it possible to do a little shopping and say, Look, if you can’t handle this is there another SEO that can take this over for you. Is that kind of safe or possible thing to do.

Larry Allen
Tom, that type of thing happens a lot. And in fact, I do think that it’s worthwhile to have those discussions, particularly if you’re talking about larger pieces of business. GSA, for example, runs an entire Assisted Acquisition Service, whose job it is to conduct acquisitions on behalf of customer agencies, there’s a similar organization in the Department of Interior, the Interior Business Center, and there’s a small office in NIH, that does the same types of things for NIH agencies. So if your agency contracting officer is underwater, with all the work they have to do, absolutely, you can recommend that they seek help from one of these assisted acquisition functions. If you’re going to do that, though, I would recommend doing that sooner rather than later. They also get backed up, they also get committed. And at some point, during the next couple of months, we’re going to see them mostly close the gates, at least on a formal basis. And you’re gonna have to work on a one off situation to try and get them to take your buy. If that’s where you want to go.

Tom Temin
Yes. And we’re in that quadrennial occurrence of when we’re going to have continuing resolutions, late budget, which always depresses spending. Because agencies don’t know what they’re going to end up with. So they’re reluctant to start new things. And then the election, the national election, that tends to be a depressive effect on spending in contracting. Fair to say?

Larry Allen
I think that’s fair to say. I think you’re gonna see a lot of nuts and bolts things done. This fourth quarter, you will see some innovative projects, because there’s just so much of a need for it. And there are people at every level of government who understand the need for innovative government. However, it’s not going to be as maybe robust as it was last year for all of the reasons you cite. Doesn’t mean the money’s not going to get spent, it’s just a question of what it’s going to get spent on. It might be more of the traditional things, where they put the innovative brand new solution on hold until the next group of people come in to manage the agency.

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