TRANSITION

Federal procurement: The road ahead under Trump

President-elect Trump is about to be sworn in as the 45th President of the United States.  Between now and then (and continuing into the first few months of his presidency), he and federal agencies will select new leadership and establish their policy priorities.

Though the Trump administration has spoken little about its acquisition policy, the transition and campaign websites provide some insight about the acquisition agenda that the new administration will pursue, as well as other policies that may impact government contractors and federal acquisition personnel.

REGULATORY REFORM

One of the Trump administration’s cornerstones is regulatory reform – a concept that is likely to have a significant impact on both industry and government acquisition professionals alike.

At a general level, for government contractors, this likely means less regulatory burdens.  More specifically, contractors should anticipate that the administration will review many of the Obama-era executive orders impacting government contractors.

Though it is unclear how many of such orders President-elect Trump will rescind, those that are more administratively burdensome (e.g. Fair Pay and Safe Workplaces) are less likely to survive than less onerous orders (e.g. paid sick leave and minimum wage), which may remain largely untouched.

Contractors also should anticipate that, in furtherance of regulatory reform, the administration will look for ways to reduce regulations increasing compliance costs.  In this respect, a prime target could be commercial item procurements, which have become less efficient and effective as the number of policies, procedures and requirements imposed on commercial item contracting has increased exponentially.

Indeed, according to the Coalition for Government Procurement, from 1996 to 2012, the provisions of law or executive orders applicable or potentially applicable to commercial item contracts have increased from 17 to over 50; and the level of oversight and data reporting associated with commercial item contracting programs such as GSA’s Multiple Award Schedules program have expanded significantly.

A reduction in this growing burden on commercial item contracting by restoring the notion of “commercial” to “commercial item” contracting is likely given its potential to reduce contractors’ compliance cost burdens and transactional costs and foster efficiency across the procurement system, yielding significant savings for taxpayers.   

Federal acquisition employees, on the other hand, may see manifestations of regulatory reform in two areas – program management and category management.

First, the administration likely will embrace and promote the recently-passed Program Management Improvement and Accountability Act of 2015 (“PMIAA”), the objectives of which comport with the administration’s desire to increase government efficiency and reduce cost-imposing regulatory burdens.

In particular, the PMIAA, by effectively professionalizing the program management workforce, will lead to increased collaboration, improved decisionmaking and reduced risk, which, in turn, translates into more projects delivering expected value to stakeholders in a timely fashion and within budget.

Second, the administration is likely to reject, or at least significantly reform, category management.  In fact, though the underlying premises of category management as outlined on GSA’s website are not objectionable (e.g., “eliminate redundancies,” “deliver more value and savings from the government’s acquisition programs”), its current structure is unnecessarily complicated and complex – a structure that is at odds with the regulatory reforms and streamlining the Administration is likely to pursue.

HIRING FREEZE/OUTSOURCING

In addition to regulatory reform, another initiative likely to impact government contractors and federal employees is an element of President-elect Trump’s Contract with the American voter – a promise to implement “a hiring freeze on all federal employees to reduce the federal workforce through attrition (exempting military, public safety, and public health).”

As the contract’s plain language suggests, such a policy may further reduce the current acquisition workforce, which is already insufficient to handle existing procurements. Indeed, federal agencies presently contract out a number of acquisition functions (with the exception of awarding a contract, which, of course, is an inherently governmental function – a designation that will not change); however, as the federal acquisition workforce diminishes (from the administration’s hiring freeze and natural attrition), outsourcing, by default, must increase, leading to more contracting opportunities for the private sector.

There may also be a return of public-private competitions, a high-profile initiative of the Bush Administration.   

EMPHASIS ON INFRASTRUCTURE

Contracting opportunities also likely will increase as a result of the Trump administration’s promise to invest $550 billion in improving America’s infrastructure. Though the actual total of appropriated funds may not equal this pledged amount, OMB likely will readjust the budget to increase the amount of money dedicated to infrastructure projects, which necessarily means increased opportunities for contractors, particularly those in the construction and service industries. 

CYBERSECURITY

Finally, the Trump administration’s focus on cybersecurity may result in greater federal spending on government contractors, particularly those in the IT field.  Specifically, the administration has pledged to “make cybersecurity a major priority for both the government and private sector[,]” i.e., “immediate and top priority for [the] administration.”

As part of this focus, the administration intends to strengthen the military to ensure that it is the best in the world – both in terms of cyber offense and defense.  To accomplish these goals, the government may heavily rely on contractors for innovative methods and technologies.

In sum, the policies of the Trump administration, as currently articulated, are likely to result in less regulatory burdens for contractors and more contracting opportunities for the private sector – either as a result of the emphasis on outsourcing (a natural result of the administration’s commitment to a hiring freeze) or from the administration’s prioritization of certain issues such as infrastructure and cybersecurity.

Simply put, this is favorable news for the acquisition community, particularly government contractors.

About the Author

Robert A. Burton is a nationally-recognized federal procurement attorney, who focuses his practice on assisting government contractors navigate the complex and rule-driven procurement process. He represents a wide range of companies that conduct business with the federal government, from large defense contractors and systems integrators to small businesses. Mr. Burton assists government contractors with the development and management of their ethics and compliance programs and aids them with their marketing strategies for selling to the government. A thirty-year veteran of procurement law and policy development, Mr. Burton served in the Executive Office of the President as Deputy Administrator of the Office of Federal Procurement Policy (OFPP), the nation's top career federal procurement official. He also served as Acting Administrator for two years during his seven-year tenure at OFPP. Prior to joining OFPP in 2001, he spent over twenty years as a senior acquisition attorney with the Department of Defense.

Reader Comments

Tue, Dec 27, 2016

Regarding the Dec 19 comment: you sound directionally correct. It was a real head-turner to see that the CEOs of Lockmart and Boeing both came to visit Trump Tower for a ritual scolding. Yes, we can hope he does not lock onto most large programs, and he likely won't. But his message his clear: good value, lower-the-waste. Companies that ignore this preview from him do so at their own peril. He seems to mean it.

Mon, Dec 19, 2016

Nice piece, but let's think of the govcon industry as an English muffin. There are a lot nooks and crannies, and this piece, with a space constraint, did not mention some of the compelling ones. Trump--and this may be counter-intuitive to some--is actually sensitive to waste. He will eventually press his acquisition officials to restructure or terminate contracts and whole programs because they are poor values, or just poorly performed. That will take the edge of the boomlet that Mr. Burton seems to project. Second, Trump tunes into competition. The concentration of contractors is still a big problem and anticompetitive. Trump's people will eventually force more of it through regulatory means. Third, his people will eventually address the elephant in the room: the quality of the acquisition work force. There's no hiding the negligence and incompetence of many people responsible for oversight of many contractors. Further--and this is really counter-intuitive--there are blatant, in-your-face conflicts of interest, both personal and org'l COIs that are routinely accepted today. Even though you could convene a grand jury to look at a fair amount of what goes on. And the pay for play continues to the futures market--future employment, that is. It stinks, and he will eventually go after it. So, we can celebrate less annoying regs, but there is a lot to lose sleep over if, as Santa might say, you and your company haven't been good.

Fri, Dec 16, 2016 Prof. Samuel D. Bornstein Oakhurst, NJ

While the Trump Administration pursues Regulation Reform, especially for Federal Strategic Sourcing (FSSI) and Category Management, there should be emphasis placed on performing a Cost-Benefit Analysis which includes quantifying the Economic & Social Costs of Job Loss.

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