A new administration brings new opportunities and new challenges

As the Biden Administration prepares to take office on Jan. 20, government contractors should be watching closely for changes that will impact their BD and capture efforts as new opportunities emerge, writes market watcher Stan Soloway.

With a new administration preparing to take over on Jan. 20, a great deal of attention is naturally being paid to what that new team and their priorities might look like.

Announcements have already been made about some of the top White House jobs, rumors abound regarding likely, potential, or hopeful cabinet appointments, and, of course, the machinery of transition is now in high gear.

Behind the scenes, the groundwork is also being laid for the priorities and themes that are likely to dominate the administration’s first 100 days, as well as its first year.. It is in those early actions, including the emergence of a presidential management agenda, that the government contracting community will gain valuable insight into what to expect going forward and how to build business development and capture strategies that align.

THE PANDEMIC & ECONOMIC RECOVERY

Needless to say, the administration’s first priority will be the pandemic response, particularly the distribution and tracking associated with the emerging vaccines. Contractors are playing and will continue to play a significant role in everything from contact tracing and contact centers to logistics support as well as the development or enhancement of IT systems to support and track the administration of the vaccine, and much more.

The same is true for the economic recovery, whatever form it might take. Minimally, it is likely to require new or enhanced forms of public-private and multi-sector partnerships. Where they make sense and how best to build them is still a fluid question. And, of course, we know there will be a time in the not-too-distant future that the federal budget and national debt again take center stage. 

As we learned twelve years ago, an extreme recession has a lagging and dramatic effect on revenue. This impact drove, and will surely drive again, a laser-like focus on priorities and the associated costs. The greater emphasis on efficiencies will cause there to be winners and losers, and since contracting, especially services contracting, comprises such an enormous share of discretionary spending, and is probably the most manageable cost to address quickly, it will rapidly and inevitably be caught up in whatever the new fiscal campaign looks like.

It is also important to recognize that the pandemic has exposed significant gaps across the full array of federal and state infrastructures supporting numerous federally funded, often state-administered programs. Reforming or revising administrative rules, greatly improving data sharing and eligibility integration, and more all need to be on the table, along with the recognition that we can no longer afford to have lessons only observed rather than learned.

Even before the pandemic, questions regarding citizen services, homeland security, defense priorities and alliances abounded. In these areas alone, the new Biden Administration has clear differences, which will surely result in stark operational changes.

THE POLICY PERSPECTIVE

From a policy perspective, the president-elect has declared that no government contracts will go to non-U.S. firms. Clearly, that is not realistic. But “Buy American” and “Hire American” is going to be a significant early focus and the ways in which we act on the concept will have massive implications.

One possibility is to think about “Buy American” itself through a slightly different lens; for example, with less emphasis on home country ownership and more on where the work is actually done and by whom.

Moreover, we collectively need to consider broader issues, including how currently globalized supply chains are starting to both regionalize and localize. There also is the issue of the procurement protocols of the World Trade Organization.

Creative, responsive ideas will be essential; and government contractors will need to be at the policy table and also serve as conduits for creative supply chain solutions that take advantage of the best such solutions available, including those developed commercially as well as within the government context.

Similarly, we can expect more attention to questions of equity and inclusion, a core theme of the Biden campaign and, of course, a core national issue. For our industry, the question is no less important and will include serious discussions of how the federal government can leverage its extraordinary buying power to address broader questions of equity.

Many people don’t feel that current small business set-aside prime contracting programs adequately address equity. That suggests a need for a much deeper and more holistic conversation not only about what works and what doesn’t, but also how we define the actual desired outcomes and the government’s role therein. Simply increasing set-aside or other preference programs won’t answer the mail.

WORKFORCE PRIORITIES

Third, the new administration will have to deal with the often-contradictory but very real and connected challenges of rebuilding the federal workforce while also making necessary reforms to the civil service system and continuing to pursue impactful and transformational technologies and other solutions that can drive better performance at lower overall costs than the status quo.

The nature of technology and the workplace today demands doing so; likewise, so will the inevitable budget crisis. As Deloitte’s Bill Eggers and others have written, the nature of work is dramatically changing across the economy as robotics, artificial intelligence and machine learning, additive manufacturing, data analytics and more have so rapidly matured.

Building a federal workforce with the skills needed to meet the challenges of the decades ahead has been a federal priority for years but remains an enormous challenge. And it simply cannot occur without also addressing the kinds of skills needed, the system in which they will be employed, and how to transform government in ways that do not overly disadvantage the existing workforce.

There too, industry has an important role to play in thinking through and helping to implement creative solutions. Otherwise, we are likely to see progress come only in fits and starts and old “we vs. they" battles between the public and private sectors are likely to reappear.

THE NEED FOR A MANAGEMENT AGENDA

Fourth, while Presidential management agendas have for several decades represented natural extensions of the work of the previous team, this time around we should expect, or at least hope for, a new kind of agenda, one that focuses first on the actual desired outcomes and second on linking together all of the various stakeholders that will be involved in achieving a given objective.

This will need to involve a new level of cross-agency and cross functional collaboration as we all gain an expanded view of what customer service and the customer experience is really about. This could well manifest itself in creative efforts, again with strong top-down direction and support, to tackle the kinds of foundational business processes, rules and policies that have long constricted flexibility and inhibited real change.

The Biden team is heavily populated by experienced digital services experts; the challenge now is to combine those prodigious talents with broader and deeper attacks on arcane systems and practices to dramatically improve government services. If nothing else, the inevitable fiscal crisis that lays ahead could accelerate this and place measurable returns on investment at the head of the line,

There is every reason to expect that the government’s focus on and pursuit of “innovation” will continue and the use of alternative acquisition methods will continue to rise, albeit with some new guardrails or limitations.

But the real issue will be not only with how the government buys innovation, but also with what the government is open to through creative acquisition processes, like the expanded use of Commercial Services Openings (CSOs), Other Transactions (which played a significant role in the development of the COVID vaccine), and even something as long-desired but too rarely applied as performance-based acquisitions.

Any or all of these trends can and likely will have a real impact on the overall market as well as on business development and capture strategies tied to specific business opportunities as they are being shaped and arise.

As with any presidential transition, there is a lot to think about. All of the things we typically and tactically focus on, from IT modernization to arcane procurement rules and practices, from workforce gaps and the quality of the competitive process to winners and losers in the budget battles. While they might not themselves be top of mind, these issues resonate across the emerging Biden agenda.

But the drivers above them have taken on a new intensity and in many cases, new context. How and where they will specifically manifest themselves is not yet known; but recognizing and building strategies around them is the necessary first step. 

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