Advocacy Update: FAR Council Rules That Matter To Your Business

By: Ann Sullivan

This New FAR Council Rule on Covered Telecommunication Equipment Will Impact Your Business, Even Outside of the Tech Industry

The Federal Acquisition Regulation (FAR) Council has proposed an interim final rule that will amend the FAR to prohibit the Federal Government from procuring or obtaining, or extending or renewing a contract to procure or obtain, “any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system” in order to combat the national security and intellectual property threats that face the United States. The definition of “covered telecommunications equipment or services” are components from: Huawei, ZTE Corporation, Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, and Dahua Technology Company.  

For all businesses, the rule:

• Prohibits contractors from providing covered telecommunications equipment or services unless the agency confirms that an exception applies or a waiver is granted 
• Requires every offeror for a contract or order to represent whether or not it will provide covered telecommunications equipment or services as part of its offer and, if so, to furnish additional detail about the covered equipment or services 
• Mandates that contractors report any covered equipment or services if discovered during the course of contract performance 

WIPP recognized the importance of this rule and the impact it will have on small business federal contractors. Read WIPP’s comments on this rule.

Proposed Rule on Lowest Price Technically Acceptable Source Selection Process (LPTA) from FAR Council Discourages Use of Practice Across Government

Lowest Price Technically Acceptable (LPTA) has been a long hated acquisition pricing policy in the small business community. Seen as a “race to the bottom,” the FAR Council has issued a proposed rule to avoid using Lowest Price Technically Acceptable (LPTA) source selection criteria in circumstances that would deny the Government the benefits of cost and technical tradeoffs in the source selection process. This rule also states specifically that LPTA source selection criteria should be avoided for procurements for IT services, cyber security, systems engineering services, and others.

Think this is a good idea?

Comment on this rule by December 2, 2019. 

Crisis Averted – At Least for Now

By: Ann Sullivan 

October 1 marks a new fiscal year, FY2020, and the government will continue to be funded until November 21.  Congress sent the continuing resolution (CR) to the President last Friday, who signed the bill into law before the September 30 deadline.

It is significant that during September, the Congress and the President agreed to two additional steps to bring stability to the budget process. Legislation to suspend the federal debt ceiling and set government spending levels for two years addressed issues that have proven to be problematic in the past. Budget bills, such as these, have provided opportunities for legislators and Presidents to hold government spending hostage to their demands.  That’s not to say the demands don’t hold merit but shutting down the government is not without consequences.

Thirty-five days in length, the last government shutdown in January-February 2019 wreaked havoc on small federal contractors.  According to a report by the Senate Permanent Subcommittee on Investigations, The True Cost of Government Shutdowns, the last three shutdowns in cost taxpayers $4 billion—at least $3.7 billion of it in back pay to furloughed federal workers and $338 million in other costs such as lost revenue.

A statistic that government contractors certainly felt was the Congressional Budget Office estimate that the most recent shutdown delayed approximately $18 billion in federal spending for compensation and purchases of goods and services.  Legislation was introduced this year to require compensation to low-wage workers employed by government contractors, including the Fair Compensation for Low-Wage Contractor Employees Act in the House and the Fair Compensation for Low-Wage Contractor Employees Act in the Senate.  Although these efforts have yet to gain traction, it is a move applauded by many government contractors.

The angst that builds in Washington around the end of the fiscal year is justified.  Even though our members have strategies in place to weather a shutdown storm, a government shutdown affects everyone in the supply chain.  In addition to requiring contract modifications to keep providing services during a CR, it also delays grant awards and new projects. 

There’s a whole new wrinkle in completion of federal funding for FY2020 that expires on November 21 – impeachment proceedings.  Decisions on where the money is spent in the federal government is a key responsibility of the Congress, but it requires the President’s signature. Putting aside partisan wrangling is a requirement for getting this funding passed.  Appropriations bills are determined by the Appropriations Committees in the House and the Senate.  Since Democrats are in control of the House but Republicans are in control of the Senate, getting these bills to the finish line requires bipartisan cooperation.  And, the President has to be willing to sign the legislation.

Senate appropriators say they can “walk and chew gum” at the same time, and have expressed their intentions to keep working to complete their work despite the impeachment proceedings. There is precedent for taking care of normal legislative matters while at the same time pursuing a major matter such as impeachment. In 1998 in the in the midst of then-President Bill Clinton’s pending impeachment investigation by the House, Clinton signed all of that year’s appropriations bills. 

Where does this leave government contractors?  Feeling pleased about averting a government shutdown until November 21, but cautiously optimistic about federal funding for FY2020 after November 21.  Here’s where your advocacy comes in.  Contact your Congressional delegation urging them to complete the appropriations process. Congress will need lots of encouragement by its constituents to stay the course and complete their work.  The small business contracting community can ill afford another shutdown.