Now that the shutdown is over, contracting officers have a lot to catch up on
Interview transcript:
Terry Gerton A lot has happened over the last few weeks and as people in the contracting world get back to their desks and start things back up again, they’ve got a lot to touch base on. Just before the shutdown we had the publishing of the FAR overhaul and defense has come out with a lot of new priorities. How can people start to put all these pieces together and make sure they’re working with the whole picture?
Emily Murphy It’s a really complicated picture right now. I want to go back and say — GSA, DoD, NASA, OFPP did an incredible job in getting that FAR overhaul done and published. And they even got the updated FAR companion out during the shutdown, which I know has to have been a struggle. So they did a wonderful job with it. USDA, Department of Homeland Security, and GSA have all adopted the entire new set of standard deviations. That means, however, that no other agency has. So if you’re a contracting officer right now or you’re a contractor, there’s not a standard set of rules you can go to. You have to be looking at which deviations did this agency adopt? How does that interface with what contract vehicle I’m using? And what about this other policy that’s happening over at the Department of War? There’s not a clear one-size-fits-all answer to the problem anymore. If you think of GSA, for example, assisted acquisition has always said that they follow the rules of the funding agency. So, money and requirements coming into GSA’s assisted acquisition service, they’re going to follow that agency’s money and the rules that come with it. Well, that might mean that they’re adopting, if it’s coming in from Department of Energy, one set of rules; Department of War, another set of rules. If it’s coming in from the SBA, it might be a third set of rules. So I keep thinking that if I’m an 1102 right now, a contracting officer, I want more monitors. Because I’m going to have to have so many different versions of rules and guidance up until we can make it through this. I think the standardization is going to come, but I think it’s going to be a really tough few months — as the new rulemaking takes effect as more and more agencies adopt those standard deviations, and as we get more clarity on what the Department of War’s new announcement from the 7th of December actually means in the application, so that we know what to expect with those contracts.
Terry Gerton How much more complicated does the continuing resolution make it? Because now some agencies have full-year appropriations. We have a CR in place for others through the 30th of January. And on top of that, we have all these new rules that you’re talking about.
Emily Murphy So if one thing contracting officers are used to dealing with and contractors are very used to dealing with, it’s CRs. I don’t think that that’s going to be the hard thing. It does slow down new starts for the agencies that have a continuing resolution. For the agencies that actually have their appropriations, it means that they can get started. It actually may help balance the workload out a little bit, because you can start the new starts for agencies that have the authority while you’re still working on the continuing resolution and continuing the existing contracts for all the other agencies. But the sort of mosaic of rules and regulations out there is going to make things tougher … it’s one more complication thrown into the mix. And the irony is that this is all really intended to make things simpler, faster, cheaper, better. And I think ultimately it will, but it’s going to be a little bit painful for the next couple months.
Terry Gerton Well, speaking of simpler, faster, better, cheaper, what’s the perspective of contractors? We’re talking first about the contracting workforce, but contractors and especially small business organizations who might not have a big contracting shop to help them navigate all of this. What should they be looking at and thinking about in this new, sort of interim period?
Emily Murphy So they need to be really carefully looking at not just their contracts, but the agencies they’re doing business with and seeing where the changes are coming. For example, if you’re an 8(a) firm, you need to be looking at the new competition rules that are in part 19. If you’re a service-disabled veteran or a woman-owned small business or hub zone company, it’s opening up the realm of what you can compete for, because things that were previously in the 8(a) program are now available if an agency chooses to take them and compete them amongst those other socioeconomic categories, they can. That’s just looking at the small business programs. They also need to be looking at the clauses. Right now, their contracts probably have the old clause matrix in them. Part 12 reduced for commercial type contracting, reduced the number of clauses by about 30%. Which clauses are changing? Which ones can they get, and what does that transition look like for them? What can they stop doing? And what do they have to change how they’ve been approaching? And it’s going to be a sort of a contract-by-contract answer. Someone’s going to deal with their flow-downs. And then we’re also hearing — I think Jason Miller, your colleague, reported on it — that there’s going to be maybe some changes to how IT value-added resellers are being treated. So that’s not even in the current regulations, but it’s something that’s sort of looming out there over the community that they that they’re going to need to be paying a lot of attention to, because limitation on subcontracting is becoming more important. Compliance with contracting terms, frankly even the move towards OTAs and CSOs and all sorts of alternative contracting, they’re going to have to become masters at a whole other set of contracting options — or award options, I should say, not even contracting options at that point.
Terry Gerton I’m speaking with Emily Murphy. She’s former administrator of the General Services Administration and senior fellow at the Baroni Center for Government Contracting at George Mason University. Emily, along with all of these changes, you’ve been a strong advocate for training of 1102s. But with all of this happening, and we have Secretary Hegseth announcing a complete shift in focus for DAU, now the Warfighting Acquisition University, what do you see as key to keeping 1102s current and keeping their mindset focused on these new ways of doing business?
Emily Murphy So we’re giving the 1102s, the contracting community, a lot of new tools. I mean, you’re seeing GSAI, the Department of War is rolling out new tools as well. Everyone’s got new tools. We’ve got new regulations, we’ve got new authorities. What I haven’t seen is anyone budgeting for the time to train the workforce on how to use these and how to use them properly. There are some very powerful tools out there and very powerful changes in the regulations themselves that give that workforce a lot more authority. But you’ve got a realignment of who the your contracting officers are going to be reporting to within the Department of War, so that they’re going to be reporting instead of up into a contracting organization, they’re going to be aligned with the program instead. At least that’s what’s been stated. We haven’t seen the reassignments happen yet. So how is that going to change day-to-day business? Who’s taking the time to sit down and explain you can now do a simplified acquisition procedure for commercial items up to $9 million? What does that look like? How do I do it? How do I do it well? If I still have to get a senior-level approval for an award above — and choose your threshold because it varies from agency to agency — $100,000, $50,000, $250,000, $1 million, what advantage is there to these new simplified tools that I’ve got if everything’s still going to go through an enhanced level of review that’s imposed at the agency level? How does that play itself out? And where should I be spending my time and prioritizing to get that best deal? There’s so much more data. How do I use it? How do I make sure that it doesn’t create a conflict of interest, also? If I’m educating an AI model, how do I make sure I’m educating it appropriately and then using it in a way that it doesn’t create its own organizational conflict of interest or its own problems with inherently governmental? How do I make sure it’s not hallucinating?
Terry Gerton Who should be thinking about that training and who should be funding it since so many of these changes are centrally driven?
Emily Murphy I know that GSA has been thinking about this. Clearly the Department of War, with the rebranding and renaming of the BAU to WAU, is thinking about training. The problem is time. You’ve got a workforce that has been under enormous pressure to get things out the door. And training isn’t something that happens … they lost over 40 days, they lost over six weeks of opportunity that they couldn’t go and take that training. And there is a backlog of work. Training, unfortunately, gets frequently put on the back burner at that point when it needs to be prioritized first so that you’ve got the ability to actually execute better on what’s waiting on your desk. But that’s easy to say. It’s a lot harder to do when your desk is overflowing with work.
Terry Gerton Contracting shops are a lot leaner after all the DRPs and downsizing. We’ve got lots of new confusing rules. Do you anticipate that this is going to pose a problem in terms of oversight and then potentially protests as this plays out?
Emily Murphy I think it is. I think it’s interesting. I heard the other day that it’s about 25% of the acquisition workforce that’s gone. I couldn’t point to the source of that statistic, but that’s a substantial reduction at a time when we’re not seeing a reduction in contracting actions or in spending. And when you’ve got different rules and different interpretations of those rules and guidance that can be changed regularly, that doesn’t have the same effect as a actual regulation, it leaves open the possibility that contracting officers or program offices or others can be interpreting things in different ways. And a difference of interpretation is ripe for oversight. And I don’t mean that in a in a negative way; that oversight can actually help highlight where you’ve got discrepancies if it’s done appropriately. It can also, though, turn into a game of “gotcha.” And for a workforce that’s already stretched pretty thin, playing “gotcha” with them just doesn’t seem very fair right now.The post Now that the shutdown is over, contracting officers have a lot to catch up on first appeared on Federal News Network.