The world’s largest customer, the U.S. Federal Government, is poised to spend more than 40% of its annual budget between June 1 and Sept. 30. The fiscal year is anticipated to end with more than $460 billion in contracts, tallied up from Oct. 1, 2014, through Sept. 30, 2015 — also known as fiscal 2015.
This fiscal year-end rush could involve many different contract vehicles, from the ubiquitous credit card to GSA Schedules to single and multiple-award contracts, as well as task order type-contracts.
This spending rush is complicated by the fact that many contracting and acquisition federal employees continue to retire, shrinking the already-stretched-thin workforce. Therefore, contracting and acquisition professionals will look to use existing vehicles or contracts wherever possible, instead of putting new contracts out for the competitive and cumbersome bidding process.
To further complicate matters, an unusual scenario is playing out where laws that were passed in the Jobs Act of 2010 are coming into play now and affecting the contracting landscape.
One of those issues addresses subcontracting reports and affects large and small businesses. To summarize, when a prime contractor states it is using specific subcontractors on a federal contract, it is now measured as to the success of that subcontracting plan. If the prime contractor is found to be substandard in its use of subcontractors, it will find that it is very difficult, if not impossible, to win the re-compete its contracts and may even score so poorly that it cannot win new, unrelated contracts.
This is a dramatic change, as in the past it was not unusual for prime contractors to virtually ignore subcontracting plans.
In a recent bid protest decision, the U.S. Government Accountability Office (GAO) held in its decision in Graybar, B-410866 (Mar. 4, 2015) that the agency properly eliminated a prospective prime contractor from the competition, in part because the large business had not met its subcontracting goals on three recent contracts. This is a powerful message to any prime contractor — it is mandatory to not only create subcontracting plans, but to follow them — or risk denial on future contracts.
And hot news for small business: The House recently passed H.R. 1735, the annual defense appropriations bill, which determines which military programs receive funding. The House’s version of the FY16 NDAA authorizes more than $600 billion for defense-related spending, and it also makes several small business contracting reforms; among the possible changes with the bill (which is still under review), the legislation would increase the threshold for simplified acquisitions to $500,000, give the Small Business Administration a seat on the Federal Acquisition Regulatory Council and include participation rate of small businesses in agency scorecards.
According to Women Impacting Public Policy, the Senate version, S.1118, is still being drafted.
Gloria Larkin is president of TargetGov, which is moving into new offices on Elkridge Landing Road in Linthicum. Visit www.targetgov.com or call toll-free 1-866-579-1346 for more information.