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JetCo Federal President to Moderate Webinar on Pathways to Government Procurement Success

JetCo Federal’s President, Sue Tellier, will moderate a Women Impacting Public Policy (WIPP) webinar titled “Government Procurement – Pathways to Success” on Monday, December 13 at 2 PM EST.

According to WIPP, to succeed in government contracting, it takes a well-laid plan, focus, patience, and resilience. The webinar will feature four women business owners as they share their story of trials and triumphs on the journey to success using WOSB, 8a, and HUBZone programs. 

To find more information and register for the event, visit WIPP’s website. 

Breaking Down Biden’s ‘Made in America’ Executive Order

In the beginning months of 2021, President Biden signed two executive orders addressing the lack of domestic manufacturing infrastructure and capabilities in the United States. The first, signed in January of 2021, was titled “Ensuring the Future is Made in All of America by All of America’s Workers”. Simply put by the White House briefing room, this executive order maximizes the “use of goods, products, and materials produced in, and services offered in, the United States.”

In February of 2021, an executive order on America’s supply chains was released, stating that the United States needs “resilient, diverse, and secure supply chains to ensure our economic prosperity and national security.”

The Biden administration quickly made it a priority to evaluate where critical deficiencies are in domestic manufacturing and moved to rectify them. President Biden’s ‘Made in America’ executive order specifically has implications for the federal contracting industry. Here is a breakdown of the executive order:

  1. Agencies must stop or revise actions that don’t promote Made in America Laws.
  2. A Made in America Office will be established and will be headed by a Director appointed by the Director of the Office of Management and Budget (OMB).
  3. Agencies must submit detailed justification, along with a proposed waiver, if they want to make an exception to the Made in America Laws and purchase goods or services from an international company.
  4. These waivers submitted by the agencies will be made publicly available on a new website to promote transparency within federal procurement. The website will also contain information as to whether or not the waiver was approved by the Made in America Office.
  5. Agencies can partner with the Hollings Manufacturing Extension Partnership (MEP) to scout out small to mid-sized American companies that can meet federal procurement needs.

Changes to Part 25 of the FAR

The executive order also outlined suggestions for changing Part 25 of the Federal Acquisition Regulation (FAR). While these changes to the FAR are not final, it’s important to keep up with all FAR updates so that your organization complies with federal procurement rules and regulations.

The suggested changes are broken down below.

  1. Increase the threshold for domestic content requirements for end products and construction materials. The FAR states that the cost of components mined, produced, or manufactured in the U.S. (for end products or construction materials) must exceed 50 percent of the cost of all of its components. This percentage is subject to increase under President Biden’s executive order.
  2. Increase the price preference for domestic end products and domestic construction materials. Simply put, the government will favor end products and construction materials that are made in the U.S. by increasing the price preference for those products.
  3. Update the list of nonavailable articles or items that are not sufficiently made in the United States. Nonavailable articles are items that are not readily available and/or made in the U.S. The executive order suggests updating the list of nonavailable articles for accuracy.

What does the executive order mean for federal contractors and the government procurement industry?

The government will continue to encourage domestic products by making it more attractive to utilize them via price preference. Additionally, the government will require a greater percentage of end products to come from domestic manufacturers via FAR threshold adjustments. Finally, this executive order will close a loophole in the list of nonavailable articles.

Overall, the federal government is moving toward rules that will make it more advantageous for businesses to have a more domestically located supply chain.

If you are currently a subcontractor for a government contract, you may want to reach out to your prime contractor to discuss these changes and their implications for your business.

Have further questions about these changes? Chat with our team today.

Transformation in Government Contracting

I think we can all agree that the year 2020 was fundamentally disruptive for both people and business. Much has been, and will continue to be written on it; I suggest this McKinsey survey for a wide view on the scope of the transformation. Even the typically circumspect Federal contracting industry has not escaped the acceleration into new modes of thinking. Beyond pandemic factors, a new administration and the implementation of long-term initiatives like the Cybersecurity Maturation Model Certification (CMMC) are also having a major effect on the contracting landscape. Below are a few of the changes to look out for in 2021 and beyond:

  1. The Executive Order on America’s Supply Chain

This is new as of late February, and I expect to have a deeper look in the coming months, but this has the potential to transform how the government purchases in fundamental ways. There are already several statutory preferences for acquiring domestic products like the Buy American and Buy America Acts, but those laws don’t extend to the production of those products. This executive order builds on several others by directing agencies to submit capability reports that detail current production capacity, gaps, and recommendations for building resilience in their supply chains. It is likely that those reports will be directive for both agency interpretation of the FAR in the short-term, and potentially for Congressional action in the long-term.

  1. The Rule of Two

While small businesses are eligible to bid on most open market solicitations, the government recognizes that the reality of unrestricted competition may reduce access for small business concerns. To protect the diversity of the contracting pool, set-aside programs mandate acquisitions from small or diverse businesses. These programs are balanced by exceptions that allow the government to make awards when small businesses cannot fulfill certain requirements, as determined by market research. One commonly used test in the research process is called the Rule of Two: For contracts under a certain threshold, the government must utilize a set-aside if there are at least two small businesses who could reasonably bid and offer a fair market price.

Recently, the discretion to apply the rule of two was litigated in the U.S. Court of Federal Claims, with the COFC ruling that it is required when set-aside obligations apply. This decision provides significant clarity for small businesses, and is expected to have wide-ranging implications for contracts under $250,000.

  1. Adoption of Commercial Business Practices

Less visible is the general adoption of commercial business practices across government acquisition practices and operations. In the Department of Defense especially, public/private partnerships have resulted in significant efficiency increases and cost reductions via trial programs. The visible success of these efforts within DoD and other agencies will likely fuel further exploration of contractor integration “inside the fence”. In these scenarios, contractors often become responsible for performance goals rather than specific requirements, allowing the government more access to best-in-class commercial processes and technology. As these programs continue to develop, look for more opportunities through industry day connections and other networking events.

Separately, each of these have the potential to shape industry outlooks, combined with the underlying push toward a more digital economy they will have outsize impact on contracting for 2021 and beyond.

a hand pointing to a flow chart

3 Things to Know About Flowdowns in Government Contracting

The world of government contracting is complex and ever-changing. Adding suppliers and subcontractors into the process can make it even more complicated. Therefore, if you’re a supplier or contractor thinking about entering the world of government, it’s important to note that each government contract requires specific oversight and regulation.

How does the government regulate contracts?

Government contracts are regulated by the Federal Acquisition Regulations (FAR), as well as supplemental editions related to specific agencies (such as the Defense Federal Acquisition Regulation Supplement, aka DFARS). When a contract between business and government is entered, the contracting officer selects clauses from these regulations that apply to the specific contract. These clauses may include language that requires the prime contractor to “flowdown” the requirements to their supplier or subcontractor. View examples of flowdowns and their descriptions.

What is a subcontract?

A subcontract as defined in FAR 44.101 includes, but is not limited to, purchase orders and changes and modifications to purchase orders. The regulations in the prime contract can be flowed down through purchase orders, subcontracts, or terms and conditions. These flowdowns are important because it helps to ensure the prime contractor is meeting its contractual requirements.

How does this impact subcontractors and suppliers?

Some flowdowns may apply to all purchase orders and subcontracts, and others are only applicable to those at a certain dollar value. Each subcontractor should understand the responsibility they have when accepting an order from a prime government contractor. Many of the requirements may already be met by the subcontractor, but it is their responsibility to ensure compliance.

Interested in becoming a supplier in the world of government? Connect with us.