2018 Federal Government Contracting – Under a Lens

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With a number like $550 billion, how could you not be intrigued? Whether you are a curious tax-paying citizen or you are in the government contracting business, it is important to stay current on what the government is spending money on, and who got the money. With that being said, the Government Accountability Office (GAO) has released a snapshot of Fiscal 2018’s Federal Government Contracting numbers, so let us have a look.

At a glance, the Department of Defense spent the lion’s share, totaling about $358.3 billion in discretionary spending with the Navy being its largest contributor. Civilian federal agencies did measure up, however, spending approximately $195.8 billion. Some notable agencies scoring high in the spending column included the General Services Administration (GSA), the Department of Health and Human Affairs (HHS), the Department of Veteran Affairs, and the Department of Energy. Federal agency contracts for goods and services accounted for 40% of the governments discretionary spending.

Small businesses saw a good portion of the money spent in fiscal 2018. To promote small business participation in federal contracting, there is a government-wide goal to award around a quarter of contract dollars to small businesses. In 2018, one quarter amounted to approximately $124.2 billion, with $52 billion going to civilian agencies, and $72.2 awarded to defense agencies.

The amount of money spent annually in federal government contracting has risen around $100 billion since 2015. Given the current trend, it seems likely that these figures will continue to grow, leading to more opportunities for those in the contracting business, and especially for small businesses.

Source:

Federal Government Contracting for Fiscal Year 2018 (infographic)

F-35 Funding in Danger

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The F-35 is said to be the answer to the worldwide problem of aging tactical aircraft, serving as the most advanced multi-role fighter in the world. It boasts versatility, lethality, and affordability – yes affordability. While this seems like an odd characteristic of a state-of-the-art war machine, the reality is that the US government and its allies sought to find the most cost-effective option to protect our skies and our fiscal policies.

In order to accomplish this feat, the government allows firms to compete for the contract, thus capitalizing on the competitive market. The lucky winner of the F-35 contract went to Lockheed Martin Corp., but as the US budget deficit continued to grow, the government took further steps to reduce costs; By threatening to cut the $728 million budget for fiscal 2020 in half, the Pentagon hopes to acquire the data rights to certain spare parts for the F-35, allowing the government to create more competition and procure parts cheaper.
Lockheed Martin, the current leading defense contractor, has yet to respond to the defense department. Byron Callan, a defense analyst with Capital Alpha Partners, believes that Lockheed will continue to resist, as he stated, “I assume Lockheed Martin will fight this as consensus growth expectations for the company include a healthy increase in revenues from sustaining the F-35 fleet.”

Should the government’s request for spare parts data be fulfilled, it could mean opportunity for other firms. Currently, spare parts are in high demand, as several nations employing the F-35 struggle to acquire the parts needed to keep their fighters in the air. According to the Government Accountability Office, the backlog of 4,300 spare parts last year caused 30% of F-35’s to remain grounded.

Sources:
https://www.bloomberg.com/news/articles/2019-05-20/f-35-spare-parts-funding-at-risk-as-pentagon-seeks-data-rights
https://www.military.com/equipment/f-35a-lightning-ii

Entrepreneurial Optimism: Small Business and Technology

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The world we live in getting more complex, especially in the realm of data and business. As technological change continues to offer new, more efficient solutions to big business problems, the demand for cutting-edge tech is achieving astronomical heights. For the largest financial institutions in the world, revamping and modernizing data platforms and software is not as easy as writing a check and flipping a switch. Although change is coming, the financial behemoths are slow to move and act, allowing small business entrepreneurs the chance to swoop in and offer quick solutions to those in the market.

Having painted this basic picture of a truly multifaceted state of affairs, the point is to highlight the opportunity and consequent optimism for those small businesses and entrepreneurs who are investing in cutting edge tech. In fact, the small-business optimism index by the National Federation of Independent Business grew to a four-month high in April, rising 1.7 points to 103.5. According to the NFIB, earning trends had the largest increase of all ten components. Basically, small businesses are making money. But in this world, you need money to make money, so how are small businesses acquiring the funds to invest in industry-leading tech? Well, small business loans are experiencing record approval rates.

Basic economics tells us that investment in capital is one of the only ways to grow an economy, and with large and small banks alike lending to small businesses in record fashion, the result is a surge of success for small businesses getting their feet wet in the tech/software world. Specifically, FinTech (Financial Technology) entrepreneurs and small businesses are finding greater success. As illustrated previously, larger institutions are a bit more constricted when it comes to change, and in the realm of finance, time is money!

Small bank approvals of business loans increased from 49.4% in March to 49.8% in April, and that’s not all small banks are approving of when it comes to small businesses. In an interview with American Banker, former SBA Administrator Karen Mills said that the next wave of the evolution of banking will be partnerships between FinTech entrepreneurs and banks, mainly small banks. Mills, who had just written a new been entitled Fintech, Small Business and the American Dream, had this to say about the optimistic future relationship between banks and small businesses, stating, “We have come to a moment where banks want to partner with FinTechs for technology and for platforms without developing it themselves. They can access bank accounts, Amazon purchases, and eBay activity to determine if a small business is creditworthy.” The possibilities are endless!
There was a time when the thought of small business brought tears to the eyes of those who thought they were witnessing the extinction of the American Dream through the diminishing prevalence of the small business sector. Luckily, technological change has been known to shake things up in the economy, and in this respect, it certainly has. The American dream is alive and well, and opportunity and optimism are growing for tech savvy small business owners and entrepreneurs.

Sources:
https://www.forbes.com/sites/rohitarora/2019/05/15/small-business-lending-soars-at-banks-technology-is-a-big-reason-why/#53f763493e00

https://www.marketwatch.com/story/small-business-optimism-index-climbs-to-four-month-high-in-april-nfib-2019-05-14

GSA’s Top Tech for Fiscal 2019

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As technology grows at its current explosive rate, the federal government is not to be left in the dust when it comes to keeping up and modernizing its own tech. GSA’s (General Service Administration) IT category lead, Bill Zielinski, sounded off on the topic of IT modernization, highlighting several areas of activity to be on the lookout for.

We have all been hearing about or even using the cloud for some time now, but whether or not that term evokes excitement or makes your skin crawl, the reality is, according to Zielinski, that government agencies are increasingly moving to the cloud. While there are hybrid options as well as on-premises solutions, a growing trend in true commercial cloud purchases has been documented. While the cloud may be scary, Zielinski believes that government agencies will continue to move toward cloud-based platforms, stating, “You’ll continue to see that as a theme and continue to see a variety of different initiatives move out in government for that.” Of the top four technologies highlighted by the GSA, the cloud was number one.

Leveraging new technology is a great way to get ahead in business, and federal agencies are looking to do just that. As the size of the challenges at hand continue to grow, an increasing number of agencies are looking to leverage emerging technologies to help solve some pressing business problems. Tech like artificial intelligence, machine learning, robotic press automation, and block-chain were some of the emerging technologies mentioned by Zielinski. As block-chain continues to gain momentum, the federal government has invested money to keep up and compete to be on the technological forefront. Artificial intelligence and robotic process automation allow for increased productivity beyond the capabilities of human capital alone. As technological processes become more complex, it is critical that federal agencies begin to get on board with the latest and greatest to be able to solve the tough problems and increase productivity.

With the evolution of all this new, complex tech, someone needs to be at the helm. Enter the Chief Data Officer (CDO). Since the OPEN Government Data Act, there has been rising pressure for federal agencies to implement data-driven decision-making processes and to appoint chief data officers to organize and manage the incredibly intricate foundation of data that comes with IT modernization. The role of the CDO is a topic in itself, but the discussion is being had according to Zielinski.

Trying to keep up with the latest technological breakthroughs, inventions, and implementations can be overwhelming. The General Services Administration’s Information Technology Category Lead, Bill Zielinski, gave us the breakdown of the top trends he’s seen in thousands of ongoing acquisitions government wide, some of which are new, while others were not surprising. The cloud is still going strong, and more agencies continue to move toward cloud-based solutions on a yearly basis. New budding technologies like artificial intelligence, robotic process automation, machine learning, and block-chain were seen trending as well. And if you were thinking, “How can anyone keep up?” Well, the answer is the Chief Data Officer or CDO, a position becoming increasingly more widely talked about and sought after to streamline and organize a seemingly indecipherable complexity of data that comes with emerging technologies. The future is here, and federal agencies are on board, pushing toward IT modernization.

Source: https://www.nextgov.com/it-modernization/2019/05/whats-hot-federal-tech-gsas-it-category-lead/156701/

Small Businesses Should be Wary of Artificial Intelligence

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With the onset of Artificial Intelligence making its way into common business practices, many companies are rushing to understand the science, so that they can be the first on the frontier of new technology in business. This rush is beginning to trickle down to smaller businesses as well, but, as this rush begins to affect smaller businesses, business owners should be wary of the speed in which they jump on the AI bandwagon. Perhaps it may be better for small businesses to be cautious of how accepting they are of AI technology.

The first point to understand this topic is perhaps the most understandable, and that is how AI is not going to magically solve company problems instantly. The technology is not perfect and still has many years of improvements to go, and there really is no direct evidence of companies getting a return on investment as it is so expensive. This problem is compounded when assessed through a small business lens. With more limited resources and data, as it stands it could be fiscally irresponsible to invest in this technology as there is hardly any likelihood that that investment will pay off.

Moreover, small businesses often have more specialized needs and business practices than larger corporations. That AI would be able to support only with the skills of a few people and resources able to create the technology needed for these businesses. Because of the lack of availability, and the specific needs of small businesses, it is not worth it to spend copious amounts of money in order to obtain this technology.

On top of acquiring this new technology, infrastructure must be in place in order to govern it and make sure it is secure. This adds on to an already exorbitant cost and creates a sustained fixed cost of having this technology incorporated into small businesses. Even with this infrastructure in place, an overwhelmingly large percentage of small businesses do not yet need this technology to become more profitable. However, as technology becomes cheaper and more accessible, perhaps these opportunities will be more relevant to small businesses.

While no company should be rushing into incorporating AI into their business, this does not mean they should entirely rule it out. AI is a fascinating technology with benefits that could, one day, far outweigh the costs. Even now, in more indirect ways, some small businesses are using AI technology and it is proving to be a benefit in many larger companies.

However, with that, there are a few key takeaways from using AI as a small business. AI is not an instant benefit and has no guarantee (currently) that it will help turn a profit. It also is still shrouded with confusion, as it is a newer technology, and few people really know the intricacies of the technology. Finally, the mad rush to be the first to have this technology should not be done simply for merit, as that can run businesses into the ground with the expenses. There should be tangible, fiscally responsible uses for this technology that makes its purchase and maintenance worthwhile.

Source: https://www.techrepublic.com/article/small-business-owners-dont-rush-into-using-ai/

Trends in Small Business Tech

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Small Business is always changing, and the evolution of its internal practices have been constantly adapting to the new frontier of technological change we currently live in. The technological revolution has brought many benefits, but also many challenges. Among the benefits are the different ways to utilize technology in order to help grow your small business or startup. Often these businesses get left to the wayside as larger corporations are on the frontlines of new technology and can quickly figure out what works best for them. For smaller businesses, on the other hand, may not know these strategies. So, these are a few trends in technology that will be useful in 2019.

An obvious factor of any business is the management of documents, clients, and communication. Often these factors are managed through different software technologies that allow businesses to more adequately address problems. However, it is often the case that each facet of the business is governed by its own software. For example, companies can use Google Drive to store documents across computers/platforms but use Outlook for emails or scheduling. The first trend we will likely see is a unification of software, where companies can use a singular program to manage all facets of their business. This would make their information more secure and would make management easier, not to mention it would save money on program subscription.

On that note, however, the next big trend among business owners is an increasing anxiety about data breaches. Cybersecurity will become an ever more important factor in business as we increase our reliance on computers, the internet, and software programs to do our business. While only a fraction of small business owners believe they are susceptible to a cyber-attack, small businesses make up a majority of the victims in cyber-attacks. Because of this trend, business owners and startups will begin to view the issue of cybersecurity through the lens of a much larger business.

With any business, advertising is a key factor in trying to acquire new customers, and as such, is always changing to reflect the new customer base. Recently, corporations have turned to social media influencers in order to reach their customers. This has proven effective as often people feel these advertisements as more personal, and they come from people that they trust, rather than from a commercial or a printed advertisement. Right now most social media marketing is limited to the makeup and fashion industry, but in 2019 the trend seems to be leaning toward taking over more markets, like food and fitness. Influencer marketing can help your business stand out in the industry and can help you reach a broader customer base.

On that same token, social media marketing is another field under that umbrella. Social media marketing is becoming increasingly helpful as more people have access to these accounts, and as technology expands to target an audience that would be more receptive of your business. Furthermore, recent trends have shown that a majority of people who buy products say they first heard about that product from an advertisement on social media. In 2019, it seems that social media is a new frontier for expanding the business, and while it seems to be a great avenue for revenue generation, we must also keep in mind the many challenges it poses to cybersecurity.

A very recent technological advancement is the onset of the fifth generation on cellular capability, or 5G. 5G is faster than 4G LTE and has little to no delay in data transfer, while 4G does have that delay. While 5G remains infantile in its growth, 2019 may be the year of its introduction, meaning that upon its release, the landscape of data transfer and small business will change along with it.

Finally, the onset of Artificial Intelligence into the realm of Business will forever change the speed at which information is processed and stored. It seems farfetched that small businesses will be able to access this technology any time soon, but as the market for this kind of automation grows, and as people become more reliant on it, we will soon find ourselves readily accepting its benefits. For example, data input can be a task that is incredibly time-consuming, but AI can help make it not only faster but can open up new opportunities for people who spend their days doing that.

This year will be a remarkable year for technology, and its relationship to small businesses. No longer will some of the most important technologies of the last 20 years be limited to enterprises, they will be accessible for everyone, and will make doing business much faster and easier. It is important to keep an eye on these trends so your business can stay ahead of the game.

 

Source:

https://www.businessnewsdaily.com/10469-business-technology-trends.html

 

Importance of past performance for Federal Contractors

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On the surface, it seems pretty simple, Past Performance is a huge contributor to how likely contractors are to win an award. However, this statement runs deep and often is contested and misunderstood by small businesses. During a recent contesting of an award to a rival competitor, a small business contractor found out that past performance should relate to solicited services rather than similar titles, etc.

The Government Accountability Office recently decided during this contestation, that the requirements of the past contract should match the requirements for any future contract. In this scenario, Technica was one of three offerors for a TSA requirement for screening services at a Floridian airport. The contract was to be judged on the best value and the most relevant past performance examples. Past performance would be judged based on similar size, scope, and complexity to the new contract. The TSA found that Technica only had one example that matched with this requirement. Technica challenged the award, arguing that it was wrong for the TSA to only consider one of its past performance examples. They argued that the solicitation never explicitly mentioned that the applicant needed these specific services, and therefore the examples they offered should all have been legitimate.

The GAO denied this protest arguing that past performance always includes evaluating the scope of the previous services. While these services were never explicitly mentioned, the criteria that were given should have made it clear that this was the case.  The lesson learned from this example is clear, that offerors should give a past performance that aligns with the requirements stated in the solicitation. While again, this may seem trivial and obvious, this case is not alone in its sentiments. That is, this problem has come up before and to win contracts, companies should understand this seemingly simple problem.

 

 

Sources:

http://smallgovcon.com/gaobidprotests/gao-past-performance-should-relate-to-solicited-services/

http://smallgovcon.com/gaobidprotests/past-performance-does-duration-matter/

GSA Modernization Efforts

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The motif of modernization has been a pervasive goal of the federal government in the past decade. The onset of the internet allowed for easier access to contract opportunities and better business. Part of this modernization includes updating contract writing systems and acquisition portals. In the past few years the Navy and Army have both taken massive steps (and expensive contracts) to help modernize their ability to find contractors ready and willing to fulfill their requirements. It was only a matter of time before GSA had its turn to do the same.

This has been a goal of this particular agency since 2016, and in the interim since, these new steps and requirements have been part of a more all-encompassing modernization strategy that they are taking. The new contract writing system is still being worked out, but Crystal Philcox, the assistant commissioner for Enterprise Strategy Management at FAS said that once they can figure out the scope of the new system, they can then work out many of the details. GSA is also looking towards examples of a successful roll out from the Army, as a model of what kind of system they are looking to create.

Another component of this new modernization strategy is the updating of GSA Advantage. FAS is developing a new catalog system so that agency customers can see what contracts are available, and what kind of requirements they are looking for. The main goal is also to be able to look at similar products and be able to compare them with the data compiled. Streamlining this process helps to make sure that only the most suitable product is considered, and that the process of choosing can be faster and more efficient.

Finally, updates to current GSA acquisition infrastructure is in order to further modernize the agency in the business of contracting. Making E-buy more secure and user friendly is at the centerpiece of this mission. Managing these changes is the FAS systems governance committee, which is reviewing all investments that GSA is considering. In doing this, they are looking at each contract awardee and working with them more personally in order to ensure that people are communicating and that the Agency is getting the most value per dollar spent.

Source:

https://federalnewsnetwork.com/ask-the-cio/2019/04/gsas-acquisition-systems-modernization-effort-buoyed-by-new-contract-writing-system/

The Expanding Pallet of Technology Services in Business.

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Technology is changing the daily operations and processes of businesses, and that is no secret, but perhaps the different philosophies and uses of technology in business is important to understand and may not be universal knowledge. Technology has made business faster, more competitive, and more cost-effective, yet it also has some negative effects. Data management and security is an example of how to prevent these negative aspects from coming into play.

The first major area of concern when discussing the potential benefits of technology is developing a more productive workplace. For example, tools exist that can help manage productivity and track progress in a given timeframe. Perhaps, more importantly, it can be used to see where time is spent, and how to mitigate either wasted time or excess time being spent in certain areas of work. On the same token, businesses can use project management tools in order to help organize tasks and prioritize tasks in order to help facilitate further productivity. Finally, managing emails and files and organizing these two processes is a simple solution that can potentially develop into saved time and a more efficient workspace. Administrative and logistical problems can hamper someone’s ability to do things efficiently and therefore should be managed in a way to save time in these areas.

Technology can also help manage the financial aspect of business by making it simpler, more efficient, and more cost effective. A good example of this is using online invoicing services, tax filing services, or budget tracking. Each of these is cost-effective, and more efficient, ways to deal with finances. Often this category of business can seem time-consuming and often beleaguers employees with pages and pages of documents. Using online services can help in this regard by making the process faster and with better results.

Marketing is a third great example of an area that can be made more effective through the proper uses of technology. Marketing plans can be created using software to better map out plans for the future, and social media, if used properly, can be a very effective tool in marketing to new customers. Recently, many big businesses have taken to sites such as twitter, to reach a younger demographic. Additionally, their ability to personalize a twitter for a multi-million dollar business has proven very effective in getting new revenue. Actively using a website can also effectively market your services or products as that too can show that your business is engaged with customers. An example of this engagement could be a blog that is updated weekly, to show that the community you are in is both human, and engaging.

In any team-oriented business, those teams need to be able to communicate and collaborate effectively. Teleconference calls, and video conference calls (or webinars) can be used to create a more closely-knit community through more face time or talking time between employees who may be at different offices. Online business training initiatives can also go a long way in educating your employees and making them more knowledgeable of the market and the business. Finally, cloud services, or a secure intranet, can be used to make sure everyone has access to the same files, thereby eliminating the problem of missing or accidentally deleted files.

Any viable business needs to have customer service to troubleshoot problems, and help customers come to solutions. Large businesses have taken to social media to help with customer service. By messaging someone on Twitter or Facebook, people can easily get in contact with any business. Additionally, customer service appointments can be made online and that can make it easier for people to come to your customer service representatives for help. Finally, online surveys have been increasingly used recently in order to get immediate customer feedback.

Using online and software services can help any business grow as they make processes more efficient and cost effective. Going paperless and using mobile office services can help save money on those supplies and can make information sharing faster. With the rise of the internet, businesses are on the dawn of a new industrial age, and the expanse of these practices will help thrust our economy into the future.

Source:

https://www.thebalancesmb.com/how-to-technology-in-small-business-2951633

DoD investing in Small Business Contractors’ Data security

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Technology is the new frontier of the 21st century, but only for those with the money and resources to afford the newest technological infrastructure. When technology expands like this, so do the problems associated with it. As we’ve seen in the past ten years, one of the main problems is security and keeping private and sensitive data out of the wrong hands.

When it comes to contracting, especially for the Department of Defense, these problems are at the forefront of every decision. For this reason, the DoD has begun investing in a secure cloud system that will help small and medium-sized contractors secure their information regarding the government.

The cloud would be a place for small contractors to store their data, rather than have them store it within their own systems, as a way for the government to ensure there is no way that the information could be misused. They specifically designate this for smaller contractors as not only do they make up a good amount of total DoD contracts, the larger contractors already have their own security systems in place, and therefore do not need to use this. The cloud would be designated as Government Furnished Equipment and would help them keep an eye on data from a vast majority of their contractors.

The introduction of this system comes as a response from companies requesting for more infrastructure like this, and greater information sharing in the Department of Defense. Companies with smaller security systems are expected to protect their own data, but they argue they cannot reasonably be expected to protect secure data from larger cyber attacks from nation states or terror cells.

The Department of Defense has now taken steps to alleviate this problem to make sure their highest volume of contractors is protected. Moreover, while details about individual attacks are classified, a recently released report from the Navy has made it clear that this is a large ongoing problem.

Sources:

https://defensesystems.com/articles/2016/02/03/dod-cyber-spending.aspx