Four questions every government contractor must ask now

Larry Allen, Coalition for Government Procurement
Larry Allen, Coalition for Government Procurement

Larry Allen isn't one to mince words. “Contractors right now have a target painted on their back,“ says Allen, president of the Coalition for Government Procurement. That prognosis comes on the heels of President Obama's recent contracting memo and a subsequent timetable by OMB that's focused on five main areas: 1.) Contract review and monitoring, 2.) Competition, 3.) Contract types, 4.) Acquisition workforce, and 5.) Managing the multi-sector workforce “” an innocuous way of saying, “We're going to insource more,“ says Allen. The presidential memo, coupled with mandatory disclosure requirements implemented last December and a Congress increasingly focused on back-end outcomes, adds up to one big picture: If you're a contractor “” and you step out of line “” you could run into consequences. Allen offers up this four-point checklist that government contractors, as well as others in the commercial sector considering government work, should be asking now to stay ahead of the curve:

1.) Are my current contracts performing well?
“If I were a contractor I would make sure my contracts were performing well, and if I had any on somebody's “˜caution list' I would start preparing a business case now as to why there maybe more to the story than dollars and cents,“ says Allen. That urgency comes in advance of the OMB guidance that appears this summer, likely by July 1. “That date may be suggestive of any contract with significant overruns or delays that ought to have a hard look at being cancelled,“ says Allen. “That would be consistent with some things that . . . while they may not have come out of the White House they may certainly come out from some pronouncements from Capitol Hill, particularly from the Senate Armed Services Committee,“ he adds.

2.) Is my service “˜inherently governmental'?
“Look carefully to see if what you're performing could be identified as “˜services,'“ says Allen. “This administration is not only serious about taking a look at what is “˜inherently governmental,' but also what's not that should be performed in-house,“ he says. So, what does “inherently governmental“ mean? The criteria is pretty subjective, says Allen. Still, some definitions are emerging. “Anything that has to do with national security would probably top the list, as would any oversight of contracts potentially,“ says Allen.

3.) Do I really want to take Recovery Act funds?
This question is specifically relevant to off-the-shelf providers who might sell anywhere between $20 million and $100 million a year or more to the government. “Companies [such as these] are increasingly looking at the government market and the expense of the new rules and regulations, as well as the potential they have for impacting the companies' larger operations, and asking themselves: “Do we really want to take Recovery Act funds?“ Of course, any company that does 80 percent or more of its business with the government has to disclose its top five officers' incomes. “Everybody is always like, “˜What's the problem with transparency?'“ says Allen, adding, “Transparency is a good thing but that's only if everybody in this environment is a responsible actor.“ “Companies,“ he says, “are increasingly saying, “˜It's not that we question our compliance systems “” we know that we have good compliance systems “”  we are concerned about putting this stuff on the website [where] someone who has an issue with our company can make an allegation, file a complaint, and then we've got to spend time fending it off.“

4.) Do I have what it takes to manage the risk?
“There is tremendous opportunity in this marketplace right now but also tremendous risk,“ says Allen. “If you criminalize government contracting, then you will wake up one day and find that the government can't meet its basic needs,“ he adds. That said, Allen does not see a “wholesale change“ in government outsourcing. For contractors in the arena the best thing to do is manage the risk of those portions likely to be insourced. “While the administration is looking to insource more, the government is growing at great rates that they're going to be outsourcing new functions at the same time,“ says Allen. “The government,“ he adds, “cannot meet its needs without having an effective workforce of contractors assisting it.“ And that means you.

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