Monthly Archives: February 2018

THE PRESIDENT’S BUDGET IS INTERESTING, BUT IS FAR FROM A BLUEPRINT

Call us contrarians here at Allen Federal, but we think that the usual “all out” discussion of the President’s budget request, submitted to Congress last week, is a bit over-blown.  Certain provisions, such as a wholesale change to low-income food assistance and federal worker pay-for-performance, are simply going nowhere.  Other parts of the proposal for priorities like DOD and VA funding are hardly new.  Perhaps the biggest factor, though, is that unless this Congress gets its act together and passes FY’19 appropriations bills by October, it will be the next Congress that passes final spending bills.  We could, indeed, be looking at a different Read more

AS GSA ADDS REGIONAL LEADERS, WHO REPORTS TO WHOM?

The ranks of Regional Administrators and Regional Commissioners are slowly being filled out at GSA with new appointees (RA’s) and newly-assigned SES leaders (RC’s).  GSA contractors may vaguely recall that GSA re-ordered who reports to whom inside the agency, but likely do not recall specifics.  Now that these positions are being filled, though, it’s time to again review who’s Read more

FED MARKET M&A ACTIVITY ON THE RISE

Consolidation among the ranks of federal contractors continues to accelerate, even as DOD and civilian agencies are about to get substantially more money to spend in the upcoming appropriations omnibus expected in late March/early April.  The big news last week was General Dynamics’ decision to buy up CSRA.  This will add substantially to GD’s IT and professional services capabilities outside of its core defense area.  Also last week, private equity Read more

CONGRESS PASSES CR THROUGH 3/23 + FRAMEWORK FOR DEAL

The federal government will remain open through March 23rd under a Continuing Resolution passed by Congress last Friday morning.  While the deal did not include full year appropriations for the Department of Defense, it did create an overall deal on spending numbers for the next two years.  The details of a spending package for the rest of the 2018 fiscal year will be put together between now and March 23rd and a final appropriations bill will likely be passed about that time.  The Department of Defense would have an extra $160 billion to spend over the next two years above previously budgeted amounts.  This should help address Pentagon concerns over readiness, training, and maintenance issues.  Civilian agencies will also get $128 billion more over two years.  From now until whenever a final appropriations measure passes, however, it will be business as usual at federal agencies.  The deal tells about what will come in the future, not what will happen next week.  Agency customers are still unable to initiate new projects that require appropriated dollars.  There is a light, though, at the end of the tunnel.  Should Congress pass a final measure on or about March 23rd, individual offices would have budget numbers around May 1st, nearly a month more than last year.  It will again be a busy end of the fiscal year.

USE CAUTION WHEN PROVIDING MAINTENANCE AND OTHER SERVICE WORK DURING A CR

It has been awhile since we’ve covered the need for companies providing service and maintenance to federal agencies operating under a CR to exercise caution.  Your federal customer can’t issue an annual maintenance agreement if they’re using appropriated funds to pay for your services while a CR is in place.  That doesn’t mean that they can’t pay you, however.  Agencies are allowed to continue operations that are already underway, unless there is a specific Congressional mandate telling them to stop.  Such mandates usually involve only high visibility projects and likely do not cover circumstances such as printer maintenance.  You and your customer agency need to work out an agreement so that you are paid month-to-month for the service your customer likely still expects you to provide.  Performing free services with the expectation of being paid later, however, could very likely cause a problem – especially for your customer.  The Anti-Deficiency Act prohibits agencies from obligating funds not yet appropriated.  Allowing you to perform free services now with an expectation of later payment is, indeed, interpreted as an “obligation” by many agencies.  If your company hasn’t had these discussions with your customer yet, they are past due.  Make sure that you and your customer follow appropriate acquisition rules.  Neither of you want to get in trouble over a small matter that could well impact larger business dealings. Read more