The longer the House of Representatives remains in stasis, the closer the next budget deadline comes without any action to resolve it. There is lots at stake, including how the federal acquisition function will operate. Not that acquisition was getting any easier with so many new rules coming. For a look at the situation, the Federal Drive with Tom Temin talks with federal sales and marketing consultant Larry Allen.

Interview Transcript: 

Larry Allen Tom, here we are again. And with so many variables, it’s really difficult to predict what’s going to happen precisely. But I think that both government contractors and their federal customers should absolutely prepare for, unfortunately, some not so good case scenarios. Right now, the government’s funded through midnight, Nov.17, which sounds like a long way away. But the House of Representatives is poised to take the next several days to, again, try to get itself as Speaker of the House. And until they find a way forward from that impasse, Tom, there’s not going to be an opportunity to work on a continuing resolution or 2024 appropriations bills in any meaningful way. And the closer you get to that deadline, the fewer good options are left. The opportunity to have a government shutdown could be back on the table by mid-November. Let’s hope not, because given the timing, if it’s mid-November, then it could very well be into December with a couple of weeks worth of shutdown. But on the appropriations side, look, if we don’t have House leadership on the Republican side, we can’t really have meaningful discussions past a certain point on appropriations either. And what that means is that December best case scenario, that everybody kind of hopes by which appropriations will be done, that’s looking less and less likely too which could easily push us into late winter, maybe early spring of 2024, before we find a FY 24 appropriation. That’s not good for the national security. It’s not good for a host of civilian agency, things like VA benefits and getting Social Security checks and tax returns managed. So there’s a lot to chew on here, Tom.

Tom Temin Yes. And the longer the continuing resolution goes set aside a shutdown, the shorter the actual fiscal year becomes in which to start new initiatives. And so it could get to effect. One, agencies can’t get their programs off the ground that they were planning for that fiscal year as quickly. And also, they tend to get a little bit conservative in spending the longer it drags on because of the uncertainty of future funding. So it’s kind of a spiral downward in many ways, even if there’s no shutdown. But you have longer and longer CR’s, followed by a shorter and shorter, by definition, fiscal year.

Larry Allen Well, Tom, that’s exactly right. And we’ve talked a little bit before about how there are alternative sources of funding. Some of the alternative sources are limited to specific capital intensive projects. Some of those funds will run out if they’re not topped back up again. So you might have some money now, but in a couple of months those funds may run dry, unless Congress sets forth an appropriation that would indirectly cause those moneys to be replenished. So I think that you’re looking at the government becoming more conservative over time. From a management standpoint, this is not anything that a good government management group would want to see, and really put in good government management, not necessarily aside, but pairing it up with fiscal responsibility. You really would like to have an appropriation in place on time, because that enables people to plan better and enables people to operate the programs more efficiently. This is perhaps one of the least efficient ways to run a government. And you never really know if Congress might go ahead and say, the situations unfortunately outside our borders right now are so dire that we’re going to go ahead and pass a [Department of Defense (DoD)] and maybe a Homeland Security spending bill. They haven’t really started talking about that yet. They’ve done it in the past, we have to see if they’ll do it again now. But certainly the rest of the government, even under that scenario, would be sitting, waiting until everybody got all their other issues resolved before they could turn back to spending.

Tom Temin My guest is Larry Allen, president of Allen Federal Business Partners. And in the meantime, procurement itself, when it does occur, is not getting any easier because of the seemingly endless pile on of new regulations and requirements from the White House.

Larry Allen Tom one of the reasons why this issue really caught my attention is, an executive order that came out from the White House recently made a directive, I think rather where they instructed the Office of Information and Regulatory Affairs, which is the agency inside the Office of Management and Budget that oversees the rulemaking process. I instructed OIRA to look at new rules in a way that would promote competition, and they did that without any apparent sense of irony, Tom. I think anyone who’s tracked the regulatory agenda of this administration, particularly as it pertains to government procurement, had to get a little bit of a chuckle out of that directive. Because while on the one hand they’re telling people, Well, we really want to promote competition. On the other, they’re loading people up there are too, cybersecurity related rules that are currently out for comment right now, Tom, there are a number of greenhouse gas and socioeconomic rules that are either out or are coming soon, and that just adds overall to the regulatory burden of government contractors. And if you add to that regulatory burden, you’re going to be discouraging competition. Fewer and fewer companies will decide that they can participate in the government market if the regulatory burden continues to get higher. And what you’re left with are companies that do this for a living. The tried and true established, entrenched government contractors. There’s nothing wrong with that. These are all competent companies who really know what they’re doing. But if you’re looking for enhanced competition, if you’re looking to try to encourage new market entries who have innovative solutions and enhance competition, the administration really has to get back on one side of the page because right now they’re on both.

Tom Temin If it’s formal rulemaking, then there is a chance to comment back and sounds like you’re urging people, if there is any time in any of these proposed rules to comment back. But some of them are not formal rulemaking. They’re just policy types of questions. But even then, I think you can still push back a little bit.

Larry Allen Tom, I really do believe that industry has an obligation to do just that. If you see procedures and policies that are coming down the road, that are going to increase speed bumps and barriers to doing business, speak up. Absolutely, contractors should definitely comment on the rulemaking process. No contractors should think that submitting comments on a proposed or interim rule is going to have a negative impact on their business. The regulatory people simply don’t talk to the business development people. They may be in the same government, but that’s a little bit like saying that the Washington Commanders are in the same league with the Philadelphia Eagles. They’re both football teams, but they play on different levels. So, too it is with reg writers and people in government business, Tom. So go ahead and comment on those rules. Make sure that your voice is being heard. And if you see something that’s a new policy or hear that somebody is going to be doing something that could have a negative impact on your business. Never assume that the government knows that it will have a negative impact. Government people have their own set of priorities and they look at things very differently from the private sector. And I’m not at all suggesting that one is better than the other. They both absolutely have their roles, Tom. But I think sometimes we lose track, whether we’re on the government or industry side, that the people who are sitting across the table from may have a very different point of view from our own. And it’s important to keep that in mind so that we don’t end up talking past each other.