Survival Guide | Beware the CR

Veterans of the federal contracting world sound off on the continuing resolution

Our experts are Linda
Allan, former executive vice
president, NCI Inc.; James
Ballard, former president,
Perot Systems Government
Services; Michael Farber,
vice president, Booz Allen
Hamilton Inc.; and Ted Hengst, president,
Harris Technical Services Inc.


WT: How should a company prepare
to operate under a continuing
resolution?


ALLAN:
Conduct a financial risk assessment
on each contract to identify corporate
exposure and customer exposure,
then rank the contracts based on risk.
Pursue a customer communications
plan to develop
risk-mitigation plans for
both the customer and the
company.

The chief financial officer
should aggregate the financial
impacts and construct an overall
risk-mitigation plan for the company,
including drawdown requirements on
existing banking lines of credit.

BALLARD: Make sure your business
unit leaders understand the basic tenets
of a continuing resolution: no new starts
and a slower spending ramp in the government's
first and second quarters.
Your leaders need to be realistic in their
financial forecasts and in their budget
estimates.

FARBER: Our ultimate goal is to have a
continuing resolution feel no different to
the firm or to our clients by concentrating
our efforts on strengthening and establishing
long-term relationships and supporting
mission-critical programs that
continue to rise to the top of the funding
priorities, even during these flat cycles.

HENGST: Educate the program teams
on the impact the continuing resolution
may have on new work and transformation
and modernization programs that
are near start. Understand how potential
delays might impact business growth and
the cumulative effect on future projects.

WT: What are the best things you can
do to help your customers?


ALLAN:
Quick and clear communications
give the customer the opportunity to,
within the constraints of the contract,
establish priorities for resource shifts, for
example, from nonessential system support to mission-critical system support.

BALLARD: Each year, Congress adds language
to the resolution that provides for
some new program starts and specific
relief from the continuing resolution. You
may be able to help your customers get
relief for items such as critical infrastructure
improvements, public outreach programs
and education initiatives.

FARBER: Be proactive in the prior fiscal
year to position critical and value-added
programs that would continue through
the continuing resolution. Work with
customers to make better use of each
dollar spent by concentrating efforts on
critical near-term needs and identifying
and continuing to support selected long lead-time items.

HENGST: No. 1 is an open and honest
conversation on what the continuing
resolution will do to their agency and
programs. What plans will be stopped or
held? What equipment purchases will be
delayed?

Also develop action plans on what will
happen once the budgets are approved.
WT: Is a continuing resolution always
bad for business?

ALLAN: Yes, because most contracts are
incrementally funded, the company has
to work at risk. You can bill for the services
only if contractually authorized, and
in a services environment, you may lose
staff if they become nervous over the
instability of their work situation.

BALLARD: Borrowing a term from the
Defense Systems Management College:
"It depends."

The potential for funds to be swept up
at the end of the fiscal year to pay the
bills is much higher and more problematic
for business if you aren't supporting
the war on terror.

HENGST: Not always. In a true government/
industry partnership, the team
can try new or innovative ways to complete
the mission. New ideas can be
tried that may not have been considered
in a business-as-usual environment.

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