Interview transcript:
Jim Carroll I know this is summer and people are thinking about vacations. As we know from watching it, as we know just from reading the papers, Congress has not taken their summer leave yet. Getting directly to the NDAA, I think that’s partly driven by an administration that is desperate to have this completed. And I think there’s a lot of political pressure being put on Congress right now to pass the NDAA. The president wants another win, and he views this as a win for him getting this passed. Right now, the House will be marking up the NDAA, and we’re very hopeful because some of the provisions that we have fought for our members, our partner companies, the almost 400 companies, I guess a little over 400 now, companies that we represent. We’ve been working hand-in-hand with them and getting to the administration, getting to the Hill, to talk about some of the things that are really important to the industry. And that’s our role. And of course, that’s your role too, Terry, is to sort of talk about what’s important in federal news. And this is clearly it. Some of the work that we have done that has made its way into the bill is the acquisition reform. That is long overdue. And that is something that we have been fighting for years. And one of the things that I’m a believer in, not just for PSC but everywhere, is transparency. And I think that’s something that is included in the House bill that is giving that ability to sort of really understand, not just really to the contractors and our members, but the general public about how bidding works and how it is a fair and reliable system. Some of the things that we’re also proud about — and I’m happy to sort of give you a little bit on each one — is the idea, and we’re seeing this every day, is some of the innovation that’s taking place. And whether it’s all the new AI apps that are popping up, it’s also some of innovation generally that’s taken place in the industry that they really want to see happen.
Terry Gerton So we’ve talked in the past about the FORGED Act and the SPEED Act, both in different houses of Congress. Are you seeing them come together and what are the specifics on the acquisition reform that you see included in the NDAA draft?
Jim Carroll In the NDAA draft, I think there are six provisions that we’re a part of that are really meaningful for our partners, our member companies. The first is section 810, which is the contractor debriefing. And that’s exactly what I talked about with the transparency. It’s making sure that everyone sort of understands when a bid goes out, what they are actually bidding on the goals, but also for those people that are unfortunately not awarded the contract, there’s some transparency for them. They understand what went wrong and why they did not get it. And what that does is allows them to be a better bidder the next time. Transparency from soup to nuts is really a good thing. Section 813, the micro-purchase threshold increases, is really an accounting way to sort of help non-traditional and some of the small member companies that are working in the space in the national defense area are really making it easier for them to do business. Section 832, we talked about the technology and the importance of that. That is a key provision for us. And it’s prioritizing contracts for some of the non-traditional defense contractors. And this is really key as there’s more emerging technology happening every day. Arguably it happens with every generation, but it sort of feels like right now is the time when we’re seeing some rapid advancements. And this cutting-edge technology in the NDAA space is going to be able to mean mission success, getting new, cutting-edge solutions to the warfighter. We’re very happy about that. There’s another accounting provision, the CAS threshold adjustment, for increasing the thresholds, gets rid of some of the compliance, which means that the price is better. So ultimately for the taxpayer with some of these reduced burdens that are unnecessary, don’t actually provide any additional safeguards, it’s actually a way to decrease spending. One of the provisions that’s interesting, it’s something that has captured a couple of headlines in the last week, is stricter “buy American” provisions in section 888. You know, we certainly agree with that, right? Our PSC member companies, our partners, are all based in the U.S., but a lot of them are global companies. And so we want to make sure that as we’re trying to drive down the prices, we’re trying to make sure that we do things here in the United States and that we buy American products…that we’re taking into the reality that some of the largest companies do business in other parts of the world as well. So, we’re obviously happy about Buy America. We just want to make sure it doesn’t create unnecessary and inappropriate burdens. And then the last one is Section 1081, the Small Business Innovation Research, Small Business Technology Transfer, SBIR and STTR, about really going after research money, going after the ability for innovation in the federal sector. And we think that’s a really key provision as well. And PSC is really happy to work with our partners to get this out there. But I know you’ve been hearing some of this too, right?
Terry Gerton There’s a lot going on and a lot of people following the NDAA, so we’re excited to see how it progresses.
Jim Carroll I want to make sure I get the quote right. But at a recent cabinet meeting, the president even talked about the role of federal contractors. And if you will allow me, I don’t want to spread fake news, so I want to make that I get that statement correct. The president said, “We make the best military equipment by far. There’s nobody close. You look at other equipment from other countries, it’s not even close. That’s why everybody wants to buy our equipment. That’s where we’re going to step up these contractors now that make it, and they are brilliant, but they make it too slowly. So we’re going to step them up.” That was July 8th. So this sort of goes to what I said at the beginning of the conversation, Terry, about the importance of the NDAA and the pressure from the administration. There is recognition from the commander-in-chief that the equipment that our PSC partners, our members — and we’re having a lot of companies wanting to work with us now — because of the ability where we have President Trump talking about the importance of our contractors. Obviously our members are on this. Just this week alone, I have two meetings at the Pentagon, one meeting on the Hill. This is what, you know, people are focused on right now. And so…maybe the August recess will allow us some time to slow down, but not now, Terry.
Terry Gerton Well, Jim, what are you hearing from inside the Pentagon on acquisition reform? That’s been a big topic of Secretary Hegseth’s comments. Are you seeing it happen?
Jim Carroll You know, I think the comments from Secretary Hegseth are reflective of what the president wants. I think there is a desire to change the way that companies do business with the federal government. And some of these changes are the ones that we have been pushing for a decade, and some of the ones the companies really want as well. Now I think the importance is to make sure that it’s done right, that it’s implemented in a way that actually achieves their objectives. And, you know, the great thing about our PSC partners, our PSC members, is they can be more flexible, can be more adaptable and provide that cutting-edge solution more than anyone else, more than they can do it in-house. So I think there’s recognition of that. And so, they desperately want it to be done. They do want it to be done faster than we have done it traditionally. I think what’s important for them to realize is that some of the reasons that it has not been accomplished as quickly as they want is because of the burdens they themselves have put on our partners and some of the compliance constraints, some of they way they go about bidding, the instability of awarding. I think that’s why I’m busy this week. We’re running up there to make sure that we can help them get their target objectives. We can help them deliver. And so that’s what we’re hearing.
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