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Contract management

Shutdown Shakeup

Nearly 10,000 companies currently hold contracts with the federal government, at an average value per week of a whopping $200 million! (Washington Post January 16, 2019)

While larger companies’ deep pockets and ability to reassign employees provide some cover, smaller companies affected by economies of scale find themselves in a more vulnerable situation. If four of your ten employees work on government contracts that aren’t paying, you may not have the bandwidth to reassign them, leading to lay offs. Even if you can reassign those employees, their work completed for the contract after the shutdown may not be recoverable.

To give you an idea of government contractor work: product purchasing accounts for 20 percent of government spending, and 80 percent is for services, i.e. contractor work. Government agencies use contractors to supplement the federal workforce, which allows them to scale for demand. Contractors keep bathrooms clean, empty the trash in government buildings, compile data for and perform research so that that informed decisions are made, and provide security. Most of this comes to an abrupt halt when the government is closed. (ibid)

Even with federal contracts not officially suspended, a company can become mired in shutdown-related complications. For instance, government background checks stop, Federal Register notices aren’t published,  federal employees can’t approve completed contracted work or make payments, issue an export license, or approve new contract workers. Contract employees who work alongside government employees can’t go to work even if they want to if the building is shuttered. (ibid)

We know this is a tough time for our clients, and we’re here to help in any way possible. Give us a call at 301-913-5000.

Shutdown is Long, Still Going Strong

Is there an end in sight? Will the Dems and Trump come to an agreement soon? Will you get paid? Will you receive back pay for the time the government doors are shut? These are the questions government workers, contractors, and subcontractors are asking.

Here’s what we know:

• Private companies that serve civilian agencies such as the Department of Homeland Security, the United States Agency for International Development (USAID), and the EPA have been told to stop work on specific contracts. (No word as to what happens next.) (Washington Post January 6, 2019)

• The government is offering guidance to contractors on an agency-by-agency basis and contractors are starting to receive “stop work order” notices from those agencies that no longer have funds. (Department of Defense and intelligence agencies are, for the most part, unaffected.) (ibid)

• FEMA has posted a “blanket” stop work order. This likely will not affect deep pockets of larger companies working on FEMA contracts, but will undoubtedly negatively impact smaller businesses. Government workers will get back pay, government contractors will not. (Washington Post, January 6, 2019)

As feared, the smaller the business the greater the impact.

Have questions about your contracts with the government and what you should be doing? Give us a call at 301-913-5000.

 

Bid that Bid … Still!

Government shutdown or no, contractors should still submit bids by their due date!

According to Alan Chvotkin (EVP and general counsel for the Professional Services Council), “these are among the thousand day-to-day issues that arise during an actual lapse in funding. The general guidance I provide our members is: Until told otherwise, the deadline is the deadline, even if the government offices are closed.” (Aron Boyd, Nextgov December 28, 2018)

Submitting bids electronically is relatively easy. A bigger issue arises with bids requiring physical submission: what to do? You are your own best advocate in this situation. Chvotkin suggests that it’s “best to attempt delivery and document — with photos and time stamps of the effort and confirm the attempt with an electronic message to the designated official.” (ibid)

Due diligence on the contractors part goes a long way. Keep an eye out for updates and extensions. Do not assume a bid deadline will be extended. The best rule of thumb is to make no assumption and assume the original due date is the due date!

Give us a call and we will help you work through your bid submission, at 301-913-5000.

Keeping a Secret Secret

The Pentagon warns that cyber attacks and threats from foreign intelligence services on national security are very real, and they aim to increase protections for subcontractors from foreign hacking efforts so that sensitive information remains undistributed.  Part of the new standard reads, “a company’s level of security is accepted by all prime contractors, systems integrators, and the DoD.” Subcontractors should now be able to better explain their security controls to defense companies. (J.Lynch, Fifth Domain, December 2018)

Subcontractors are being held to new standards, and the Pentagon is serious about poor or lapsed cybersecurity measures. A Pentagon task force has been created to prevent defense secrets from outside hackers as well as a pilot program for the DoD to learn which companies are actually in their network.

In light of those warnings, the Aerospace Industry Association (AIA) has updated the national aerospace standard, which now consists of a list of 110 security controls broken down into “22 control families.” (J.Lynch, Fifth Domain, December 2018) These new AIA guidelines do not replace the National Institute of Standards and Technology standards, but work to compliment them. Updated AIA standards are built around successive levels of security, thus allowing for continual improvement of cyber defense capabilities.

Questions about your cyber security plan? Give us a call at (301) 913-5000, we are here to help!

You Get What You Pay For

The Commerce Department is succeeding in an area where most other agencies have failed: the shared services arena. Glen Davidson, the former executive director of enterprise services at Commerce, who led the shared service’s effort said, “the initiative is saving millions of dollars, providing better services and setting Commerce up of for future successes.”(Miller, J., Federal News Network December 10, 2018)

According to Davidson, Commerce may have paid less in the past, but the quality of services was substandard. He felt that poor quality and lack of timeliness likely impeded the mission. Davidson believes the impact of shared services is clear particularly around IT services.

Rod Turk, the acting Commerce chief information officer, gave a great example of how shared services work.  He recently shared how something as simple as taking printers off of employees desks and moving to a centralized and secure approach reduced costs for printing and maintenance of the printers. According to Turk, the next big effort will be around IT shared services for identity credentialing and access management (ICAM).

Davidson explained why Commerce has been so successful with shared services

•A long view of the effort was taken. It was a crawl-walk-run scenario.

•Data was painstakingly collected The data set a true baseline of current costs, as in the example above, for printers.

•It was understood that it would take money to save money.

Davidson looked well beyond the cost for labor. He said, “Most people look at labor costs. But I go beyond that and look at the costs of the building, electricity, the operations, and maintenance of the technology platform and other things so I could determine total costs. There is a lot of information that currently exists in the systems that we have, but you have to go and find it. No one even knew exactly how many people were employed at Commerce. My standup costs came from Commerce’s working capital fund that is largely made up of contributions from all the bureaus in order to fund my stand up costs. I was under a great deal of scrutiny because any dollar I received meant another organization was receiving less.” (Miller, J., Federal News Network December 10, 2018)

Commerce has built a one-stop portal so that actions, including acquisition, can be accomplished via an online request. Davidson said Commerce will deliver acquisition services for its eight smallest bureaus of the Office of Secretary, mainly around commodity products and services.

Davidson said, “we can continue to deliver IT services in a more consolidated way. We will look at grants management services too. The list of possibilities is endless.” (Miller, J., Federal News Network December 10, 2018)

The current administration will use Commerce’s success as a model for other agencies.

Questions about shared services? Give us a call at 301-913-5000.