Government Contracting First Quarter Review and Second Quarter Projection

The first quarter of fiscal 2012 got off to an all-too-familiar start, with federal agencies operating under a series of short-term continuing resolutions, instead of year-long budgets. Still, that didn’t stop agencies from awarding contracts worth more than $45 billion.

With budgets now in place, that pace likely will speed up. 3,500 solicitations worth up to $325 billion have been identified planned for release early this year.

First, let’s take a look at some of the more notable contract awards from the first quarter:

House Subpoenas Four Agencies for Small-Business Non-Compliance

Four federal agencies were issued subpoenas by the House Small Business Committee on Oct. 20 for not complying with the Small Business Act’s procurement policies, according to a committee staffer.

The departments of Justice, Agriculture, Treasury and State were summoned to appear before the Small Business subcommittee on contracting and workforce on Nov. 1 to testify why they are in noncompliance.

At issue is the “structure” of these agencies’ Small and Disadvantaged Business Utilization Offices (OSDBU) and “the fact that they are not reporting to the agency head or deputy head.”

  

Small Business Subcontracting a Proposed Ruling by SBA

The U.S. Small Business Administration (SBA or Agency) is proposing to amend its regulations to implement provisions of the Small Business Jobs Act of 2010, which pertain to small business subcontracting. SBA is proposing to amend its regulations to provide for a “covered contract” (a contract for which a small business subcontracting plan is required, currently valued above $1.5 million for construction and $650,000 for all other contracts), a prime contractor must notify the contracting officer in writing whenever the prime contractor does not utilize a subcontractor used in preparing its bid or proposal during contract performance. SBA is also proposing to amend its regulations to require a prime contractor to notify a contracting officer in writing whenever the prime contractor reduces payments to a subcontractor or when payments to a subcontractor are 90 days or more past due.

In addition, SBA is proposing to clarify that the contracting officer is responsible for monitoring and evaluating small business subcontracting plan performance. SBA is also proposing to clarify which subcontracts must be included in subcontracting data reporting, which subcontracts should be excluded, and the way subcontracting data is reported.


SBA is also proposing to make other changes to update its subcontracting regulations, including changing subcontracting plan thresholds and referencing the electronic subcontracting reporting system (eSRS). Some of the SBA's proposed changes would require the contracting officer to review subcontracting plan reports within 60 days of the report ending date. 


Finally, SBA is also proposing to address how subcontracting plan requirements and credit towards subcontracting goals can be implemented in connection with Multi-agency, Federal Supply Schedule, Multiple Award Schedule and Government-wide Acquisition indefinite delivery, indefinite quantity (IDIQ) contracts.

New On-Line Government Forum Created for Small Businesses

The House Small Business Committee has launched “Small Biz Open Mic” as a forum for small business owner to speak directly to Congress about government policies affecting them.

Committee Chairman Rep. Sam Graves describes the site as a:

“… new media forum that encourages blog-type comments and testimonials from small business owners across America regarding government policies, and allows participants to comment on Committee news, legislation, hearings, and news stories that relate to small business growth and development. Comments from participants about legislation and policies that impact small businesses will be used to help the Committee conduct its official business.”

Small business owners can upload videos and leave comments at http://smallbusiness.house.gov/OpenMic/SubmitFeedback.aspx

OMB Urges Agencies to Pay Small Business Contracts Faster

Federal agencies must accelerate their payments to small business contractors, according to an Office of Management and Budget memorandum released Wednesday. The new guideline cuts the recommended payment time in half. Previously, under the 1982 Prompt Payment Act, agencies had to make payments within 30 days from when an invoice was received. 


Now, agencies should make payments within 15 days, or as soon as practicable.
With the government spending nearly $100 billion a year in small business contracts, OMB predicts this will boost cash-flow for small businesses and help create economic growth. “This will benefit tens of thousands of small businesses by getting money into their hands faster. The late payment interest penalty will not change, however. A provision in the Prompt Payment Act, the penalty is triggered when an agency does not pay within the 30-day mark.

Initial reaction from the National Small Business Association is positive.


Agencies are expected to notify OMB by Nov. 1 when they can begin making accelerated payments.

The End of Year Spending

The end-of-year spending spree, a time-honored tradition in the federal government, appears to show no sign of abating.

Although in theory agencies take a more strategic approach to information technology spending than they did, say, a decade ago, most still end the fiscal with a flurry spending in effort to use the last of their appropriated funds. As always, they fear having their budgets reduced in the next fiscal year if they do not use all the money available in the current one. In other words, use or lose it.

The End of the fiscal year is not as close as many would be expecting, normally the end of the fiscal year will be September 30^th, midnight. What this mean is all agencies must spend their budget prior to midnight September 30^th. As I’ve continued to share with you, spending nearly 600B in 5 months is just about impossible. Recently the House voted early Friday 219-203 to pass a continuing resolution that funds the government through Nov. 18, setting up a battle with the Democratic-controlled Senate.

Continue to position your companies for ongoing fiscal year 2011 spending at least through Nov. 18.  

5 Things You Need to Know to Close Deals as Fiscal Year Ends

Just a few weeks remain in the most turbulent federal fourth quarter in memory. On Oct. 1, a new fiscal year will launch without a budget of its own. In the meantime, you’ve still got fiscal 2011 to close out. At this point, your sales group must swerve into expediting mode in order to close as much business as possible in the remaining month until the end of the fiscal year. While marketing and business development really can’t do much for the current fiscal year, you still have time to close sales.


Here’s how: Concentrate your expediting activities on making sure contracting officers receive complete, sign able packages they’ll be willing to move on. Keep in mind, they are in a mode of only signing and moving packages entailing the least friction for them.


To ensure closure, make sure you can affirm the following statements...