Lots of contracting changes being considered…along with other trends more positive for contractors
by Mary Scott Nabers, CEO of Strategic Partnerships, Inc.
Many contractors, associations and small business advocates are seriously involved in letting Washington know that they do not like the president’s “in-sourcing initiative.” President Barack Obama’s administration is pushing an initiative that could possibly result in the hiring of 30,000 new civil workers and displacing thousands of small government contractors.
The administration believes that federal agencies should not outsource anything that is inherently governmental. They want civil servants to do that type of work.
Smaller firms would be impacted first because they tend to perform more tasks that could be in-sourced easily. However, the end result would be that the federal government would curtail much of its outsourced contract work. This would significantly impact thousands of firms and individuals who are hired by the firms to deliver government services.
That trend does not seem to be trickling down to state and local jurisdictions though as outsourcing is on the increase there. Budget crunches in all 50 states have forced state and local public entities to increases outside contracting because it usually results in cost reductions.
Government is notorious for not firing any employee once an employment relationship exists. And government employees, after a certain amount of time, are eligible for lifetime benefit and retirement packages that are extremely costly to taxpayers. Contracting work out to private sector firms frees public entities from taking on long-term employment obligations. There are huge long-term savings attached to contracting with private sector firms.
Another trend that contractors will appreciate, if it becomes a universal reality, is related to a requirement that would force government contracting officers to post online justifications for making purchases and/or contracting when there is not a competitive process. Federal agencies are expected to be held to higher standards in the future and "sole source" contracts are being scrutinized carefully.
Sen. Mary Landrieu from Louisiana chairs the Senate Committee on Small Business and Entrepreneurship. She has introduced legislation that would tend to increase outsourcing to small and minority contracting firms. Her committee is working hard to address the disparities and inequalities related to the size of government contractors.
Government contractors would be well advised to stay current on proposed legislation and new procurement rules being considered. And, even better than monitoring events, would be getting involved in the process.
All too often, federal procurement trends get tied to federal funding as it flows to individual states. So, what happens in Washington may end up being the norm for state and local government procurement contracting. If a company does not agree with what is happening in Washington, it is critically important to speak up immediately. There are thousands of government contracting firms and millions of jobs at stake. Individuals, from executives to front-line workers, all have congressional representatives who could, and should, be contacted about how procurement is being handled.
Mary Scott Nabers is president and CEO of Strategic Partnerships, Inc., a 15-year-old procurement consulting and procurement research firm headquartered in Austin, Texas.
