For years now, the Department of Defense (and all other government agencies) has had to deal with the unpredictability of possible government shutdowns and ongoing resolutions. According to Pentagon Comptroller, David Norquist, “We’re in a very different place now.” At the Professional Services Council’s 54th annual Vision Federal Market Forecast conference, he explained, “Under a continuing resolution, we often had to wait until spring to do some things—now we can finalize them now or do them on schedule.”

Norquist predicted major shifts in the defense budget’s structure based on the Administration’s December 2017 National Security Strategy. Its underlying theme, he said, “is a return of great power competition” with Russia and China, which will require sub-agencies and contractors to better serve the warfighter.

According to Norquist, the defense budget is “large and complex”: bigger than the combined inventories, employees, and assets of WalMart, Apple and the state of California. Audits are necessary to fill gaps and plug holes.

His team will look at the condition of equipment, supplies, warehouses, and other buildings to generate “a laundry list of weaknesses.” Auditors will ask whether the items exist, whether the data are accurate, whether items are missing, and what shows up on financial statements.  Contractors who built the systems being used, he added, will be privy to “the very quick feedback loop on what’s being fixed.”

Norquist advised contractors to focus on an agency with a problem to which they bring a solution. Contractors who can solve an agency’s challenges or fulfill a need will be the winners in 2019.

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