Government contractors are experiencing difficulties as they work through obstacles and uncertainties during the COVID-19 pandemic. However, if you thought spending would slow, think again.
In response to the emergency, spending likely exceeded $100 billion for the month of March, according to a webcast hosted by George Mason University’s Center for Government Contracting (GMU). Because of a standard 90-day reporting lag, that figure is likely to be even higher. (Washington Technology, March 31, 2020)
The department of Health and Human Services is responsible for the bulk of non-defense contracting activity with commitments of approximately $748.5 million under research and development. Eric Lofgren, a GMU research fellow, feels the majority of that is going toward “Other Transaction” contracts, designed for speed of fielding capabilities as they fall outside of traditional acquisition regulations. (ibid)
Orders are also being solicited and placed for Personal Protective Equipment (PPE) as well as services such as testing and cleaning. Orders of this nature could very well rise to over $100 billion in response to the COVID-19 emergency. Non-defense spending, as of 27 March, totaled $15 billion, which is on track for spending during the same timeframe in 2019. However, the recently passed CARES Act stimulus package frees up $2 trillion so agencies have funds available for immediate use. (ibid)
The Department of Defense is looking at how the commercial industry is designing solutions. In March, DoD requested white papers from the academic community and private industry for prototype solutions to prevent, contain, treat, and detect coronavirus as well as other possible bio-threats. Many believe this is just the start as DoD begins to support the federal government’s pandemic response. (ibid)
Jerry McGinn, executive director of the GMU GovCon Center and former head of DoD’s manufacturing and industrial base policy office said, “Initially a lot of industry was in the sources sought phase of solicitations, now you’re starting to see they’re just going straight to solicitations…. They’re publishing notices on one day and requiring responses the next, and this is just going to accelerate.”
Questions about these solicitations and how your company might provide solutions? Give us a call.