Category Archives: Business

CONGRESS SENDS $4.6B AID PACKAGE TO PRESIDENT

Humanitarian aid to provide better care for migrants at the border and increased funds for DOD are the major parts of a massive aid bill Congress passed late last week and sent to President Trump for his signature.  Significant new money will flow to the southern border for humanitarian relief if, as expected, the President signs the measure.  Health and Human Services will get the bulk of the money for things such as improved migrant child health care.  DHS would also receive funds, mainly for ICE and the Customs and Border Protection offices.  There will certainly be opportunities for contractors from the passage of this measure. $50 million is included, for example, for data systems and analysis.  In addition, logistical help in delivering aid, tracking technology, medical care, and other assistance to ensure security are just some areas that will likely see increased need for contractor help.  Some of the money will certainly make it onto the street during the fourth quarter of the fiscal year, though there is no way all $4.6B can be processed.  In addition to this funding, the Pentagon will receive $145 million in extra money, likely for missions related to supporting the other agencies.  Contractors may want to discuss the potential for business here with their DOD counterparts.

GSA RELEASES SECOND SCHEDULES RFI

As part of its project to consolidate all Multiple Award Schedule contracts into a single solicitation, GSA issued a second Request for Information yesterday seeking contractor input on proposed new large categories, subcategories and Special Item Numbers (SINs).  Realigning solutions on Schedule contracts to make it easier for customers to find what they need is a major part of the consolidation project. “Reorganizing our categories and consolidating our SINs is a big step toward our final goal of a single Schedule,” said GSA’s Federal Acquisition Service Commissioner Alan Thomas.  The agency is hoping to better align SIN’s with North American Industry Classification (NAIC’s) codes.  “We’ve worked to ensure the proposed new SINs make sense and are better aligned with the North American Industry Classification System codes. The feedback we receive from this RFI is an important building block for GSA’s new single MAS solicitation,” said MAS Program Management Office Director Stephanie Shutt.  The agency also appears to be going further in terms of what might constitute a large category of solutions and how those would, in turn, be divided into subcategories.  Comments on the RFI have a short turn-around time being due to GSA on July 12th.  Comments on the initial RFI covering consolidated contract clauses are due July 5th.  See more on the new RFI here:  https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=fc7a0d36b365079cfa68789fb0979aaf

FEDS EXCEED SMALL BUSINESS USE TARGET

Federal agencies awarded contracts worth $120 billion to small businesses in FY’18 according to a report released last week by the Small Business Administration.  The amount broke the previous record by $15 billion and equates to 25% of prime contract dollars, 2% over the statutory small business use goal of 23%.  Many agencies received an “A+” from the SBA for their small business use.  “The federal prime and subcontract(s) awarded to small businesses in fiscal 2018 equate to more than one million jobs created. Every contract that gets in the hands of a small business is a win-win for our nation, the entrepreneurs, their employees and the communities they support all across the country,” said acting SBA Administrator Chris Pilkerton.  Not all small business contracting news was good, however, as agencies narrowly missed their women-owned small business goal of 5%, awarding 4.75% of contracts to such firms.  The HUBZone gap was nearly 1%.  Awards to Small Disadvantaged businesses, on the other hand, nearly doubled the goal set for them, while Service Disabled Veteran Owned Small businesses exceeded their goal by 1.27%.  The only real surprise there is that the veteran-owned business number wasn’t larger due to consistent pressure on the Department of Veterans Affairs to buy from such firms at every turn.  As the fiscal year-end draws closer both small and large contractors need to understand the advantages of working with smaller firms.  The speed and flexibility they can offer fit well with the needs of an overworked acquisition workforce. 

SENATE AMENDMENTS WOULD ALTER GSA E-COMMERCE APPROACH

GSA would be required to pilot test all three types of commercial e-commerce systems under an amendment offered to the FY’20 Senate National Defense Authorization Act (NDAA) by Senator Sunny Perdue (R-GA).  The agency is currently planning to test only the e-marketplace model during its initial pilot program, to the exclusion of e-commerce and e-procurement companies.  The agency had been expected to release a draft RFP for the e-marketplace model any day now. It is uncertain whether the amendment, which would not take effect for months even if adopted, might impact that timeline.  Several industry groups had expressed concern that GSA was limiting the pilot to one model and apparently got the attention of Senator Perdue.  Another Perdue amendment would also prohibit an e-commerce provider from selling its own items, or those of a subsidiary, via their own e-commerce portal through the GSA program.  This amendment is a clear shot at Amazon, a company known for developing private label products that compete with popular sellers on its own web-site.  Floor amendments, such as these, face uncertain prospects. On one hand they could be included in a “manager’s package” of amendments and be voted in.  On the other, they could be ruled out of order or simply not adopted.  If adopted by the Senate, they would have to be approved in a conference committee with the House as the House version of the FY’20 NDAA does not contain similar provisions.  A final NDAA may not be voted on until September.  Stay tuned.

IT MODERNIZATION IS SHOW, MAINTAINING EXISTING SYSTEMS IS DOUGH

When it comes to IT modernization Congress just can’t put its money where its mouth is.  Despite a recent GAO report showing that some agency IT systems are 50 years old and operate with equipment barely made in the 21st century, Congress still can’t find more than $35 million to dedicate to modernization.  That’s a pretty stark statement, but it’s not necessarily news to IT or telecommunications contractors.  There have been at least two recent federal trade press reports pointing out that rhetoric does not match reality when we’re talking IT modernization.  At least two-thirds of all federal IT spending go to maintain current systemsAgencies also prefer to “lift and shift” existing systems, instead of updating to technology that could actually reduce overall operating costs and improve security.  What really is their incentive, though, when their Congressional overseers dedicate millions to home-state pet projects like buying excess blueberry production?  For all of the talk about IT modernization, the real money is in unglamorous areas like patching existing systems, software upgrades, and incremental hardware improvements.  While contractors should showcase their new capabilities, just as car dealers put their hottest models in the showroom, they should focus their actual sales efforts on the models in the back of the lot.  It would not be surprising for it to take a true national emergency – like a significant part of the electric grid being hacked – before Congress gets the message on increasing IT funding.  Until then, remember the golfing adage:  “Drive for show, putt for dough”.