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RESOLUTION IS NO CLEARER WITH FIVE DAYS TO GO BEFORE SHUTDOWN PART II

While many had hoped that the President’s State of the Union address last week would at least signal a path to avoiding a new partial government shut-down, that didn’t really materialize.  This leaves Congressional leaders, and feds, with substantial uncertainty over what happens next.  A bi-partisan Congressional group has been working on compromise spending legislation and may well be close to a deal.  Whether the White House would accept that, however, is a large unknown.  Even if Congress passed a spending bill and the president vetoed it, it is very uncertain whether there would be enough votes for an over-ride.  Even the Democratically controlled House would need some level of Republican support for such an action.  Indeed, some leaders in each party at least privately want the President to use his emergency authority to divert existing money and build a border wall so that they can pass a clean spending measure that is separate from that issue.  While that opens a new can of worms for the use of presidential authority, it would, at least, result in a government that was on more sure footing in terms of being open for business.  It is quite likely that this one will come down to the wire, as most shut-downs do.  Contractors must be prepared to close down some operations, again, but may not have to.  Watch next week closely and remember that at least this is more exciting than last Sunday’s “Super” Bowl.

DOD ISSUES CLOUD STRATEGY, BUT WHAT DOES THAT MEAN?

While the Department of Defense issued its new cloud strategy earlier this week it is perhaps more notable for what it doesn’t say than what it does.  On the surface, DOD is embracing different types of cloud solutions with an eye toward adopting commercial cloud platforms.  Anyone who’s spoken with DOD officials, however, knows that pitching an off the shelf cloud solution will likely not lead to much business.  Left out of the policy is the reality that many DOD and service branch leaders want cloud solutions with the highest level security protections, an expensive proposition that automatically counts out all but the largest companies.  Also missing is DOD’s preference for dealing with known, established contractors – especially when newer solutions like cloud are being acquired.  This is essentially reinforced by the cloud policy which takes a “warfighter first” approach and states that cloud solutions must be built “in a manner that never puts the warfighter at risk”.  While there may be some limited, pilot-like opportunities for innovation, the agency has already signaled that larger cloud solutions will go to either established DOD contractors that can implement cloud tools that are both offensive and defensive, or leaders in commercial cloud technology that can meet high security requirements.  Established DOD contractors offering cloud solutions should be familiar with the policy, but also understand what is missing

BUYING ANOTHER CONTRACTOR? MAKE SURE YOU KNOW WHO’S CONTRACT YOU’RE WORKING UNDER

Contractors buy other contractors all of the time.  Indeed, having a key contract can be the difference between a sale or no sale.  It’s important to remember, however, that regardless of the status of your corporate acquisition, the government considers the original contract holder to be the prime contractor unless a formal novation has taken place.  Experienced government contractor Grant Thornton learned this lesson the hard way.  While they had already executed an Asset Purchase Agreement to buy OASIS contractor Wyle Labs, Wyle’s novation request had not be completed by GSAWhen Wyle bid on an OASIS task order they admitted that Grant Thornton would do 100% of the work (indeed, the even did all of the proposal work).  The Department of Homeland Security deemed the offer non-responsive and found considerable risk in the fact that they would not be in privity of contract with the entity actually performing the work.  When Wyle protested to the GAO, GAO sided with DHS.  Contractors need to be aware of the risks to pending procurements when conducting a transaction.  Similarly, although they should be open and candid with contracting officers about pending deals, the risk remains that an agency will disagree and choose not to award a contract until the transaction, including novation, is complete

BE OUR GSA SCHEDULE VALENTINE

What better way to spend Valentine’s Day than with Larry Allen taking a GSA Schedules class?  Join Allen Federal and the Public Contracting Institute for a Hands On Workshop on the latest developments in GSA’s Multiple Award Schedule program February 14th in Washington, D.C.  It’s not all hearts a flowers, but we guarantee that you’ll leave with a better sense of how to manage your company’s Schedule contract.  Chocolates will be distributed!  See the details here: http://publiccontractinginstitute.com/event/hands-on-workshop-how-multiple-award-schedule-contracts/

SHUTDOWN IN TWO WEEKS? DON’T BET ON IT

Although your federal customers do have to prepare as if there might be another partial shutdown, Allen Federal is placing the odds of such an event at well below 50-50.  That doesn’t mean that we’re predicting that all of the issues that led to the first shutdown will magically be addressed, but rather that there is little will in Congress, especially in the Senate, to go through another shutdown event for quite some time.  It is quite possible that Congress could vote to fund the agencies in play and decide separately on the President’s border wall initiative.  Another scenario is that Congress sends another CR to the President who then vetoes it, only to have that veto overridden.  Either way, agencies currently operating under a CR are likely to continue doing so for the foreseeable future.  That’s not the best news for contractors, but it does keep agencies open and provides an opportunity for discussions about future business when and if formal appropriations are made available.  One wild card to watch is what the President says tomorrow night in his State of the Union address.  That may provide clues as to whether a grand deal is achievable, potentially resulting in actual appropriations measures being passed in the short-term.  In the meantime, the government is open for business, albeit with morale and weather issues making it slow going.