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No Longer Waiting to Exhale

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When the House, Senate and White House all cooperated to develop and pass a bi-partisan two-year budget bill, government contractors exhaled a huge sigh of relief.

President Obama signed H.R. 1314, the Bipartisan Budget Act of 2015, on Nov. 2, after the House and Senate made their recommendations the previous week. While this bill impacts the debt ceiling and other federal budget issues, as relates to federal contracting, primarily it sets federal spending budgets for the 2016 and 2017 fiscal years.

Contractors saw an immediate response by the acquisition community in a wave of newly-released requests-for-proposals (RFPs) and Sources Sought Notices. In just the first 13 days of November, more than 1,100 new Sources Sought Notices and 4,600 RFPs (or Presolicitation notices) were posted on FedBizOps, the primary federal contracting opportunity posting web site.

When the budget is secure and the threat of continuing resolutions and government shutdowns are removed from consideration, as they are now, the federal contracting and acquisition workforce can move ahead with pent-up contracting opportunities and take new initiatives to improve the acquisition process, reduce costs and look for more efficient solutions; conversely, if a continuing resolution is in place, government contracting officers are prohibited from pursuing better, faster, cheaper ways of solving the needs of the government and instead must adhere to old, existing contracts that do not necessarily focus on improvements or reduced costs for the government.

As was proven during the last government shutdown in 2013, the subsequent cost to taxpayers was heavy. Fact-checked estimates range from $12 billion to $24 billion costs to taxpayers. For federal contractors, it is widely accepted that they laid off thousands of workers; and unlike federal workers, these workers were not likely to get back pay for the time off, unless they filed for unemployment, an additional burden to business owners.

When a government shutdown is simply threatened, there is an insidious cost to businesses, as they fear an economic slowdown and job loss. They take steps to mitigate those costs by preemptive layoffs, slowed research and development and other cost-cutting measures.

Now that we are ending 2015 with a fixed two-year federal budget, these fears of a continuing resolution or shutdown can be set aside. Instead, both government and business look to a two-year future that includes controlled, budgeted growth with strong cost-cutting contracts in place for both civilian and defense agencies.

While the $80 billion increase in spending from 2015 is split evenly between civilian and defense, industry has been duly chastised through the increased use of Lowest Price Technically Acceptable (LPTA) contracts and as a result, invested a great deal of effort in satisfying reduced pricing requirements on recent contracts.

Stay tuned for more information about the rebound pendulum swing from best-value contracts to LPTAs.

Gloria Larkin is president of TargetGov, in Linthicum. She can be contacted at 866-579-1346 and via www.targetgov.com.