For federal contractors, the Trump administration brings unique opportunities and challenges, as contractors hold the president accountable to his campaign promises to rebuild roads, bridges, airports and schools during the next three years.
Be mindful of details in new opportunities
The adminstration touts IT infrastructure and security, domestic business agreements and public-private partnerships as its priority areas—encouraging construction contactors to believe they will see increased opportunities for doing business with the federal government.
However, the challenge for any president is moving from promises to practice, and that is where contractors must be mindful. Trump may be a career developer, but he is not a career politician, and the demands of the federal government are not the same as those placed on the president of a closely held family company, no matter how large. As can be seen in some early executive orders, the White House may be willing to act quickly, but the slower, consensus-building, majority-rules system that underlies the federal government will continue to delay precise infrastructure plans.
Trump may also face challenges from budget hawks in his party who may see an opportunity to shrink the federal apparatus, and so may be reluctant to fund certain projects. Under applicable regulations, contractors that accept long-term projects may be in a bind if a later decision is made to cease allocating funds to a project. Prudent contractors should pay attention to planning and funding details and weigh any risks before jumping into a project.
Be prepared for volatility
It is well known that Trump’s rise to the presidency did not follow a traditional path, and the volatility that marked his campaign may translate into procurement policy. Those familiar with the @POTUS Twitter account know that he is willing to criticize not only SNL, but also contractors involved in projects he deems wasteful. One unfavorable tweet can thrust a reluctant contractor into the spotlight.
President Trump has further shown he is willing to roll back Obama-era policies, which can increase volatility for contractors seeking to make long-term plans to maximize their competitiveness.
If the Affordable Care Act, which requires contractors to “bake in” overhead costs in their bids, is ever repealed or significantly altered, contractors may be required to respond accordingly to keep bids competitive.
Those at the top may have changed, but the contracting officer likely has not
Contractors also should remember that even though there may be turnover at the highest levels of government, the majority of federal employees have not changed. Most are career workers who held positions before the Trump administration and will after. This is likely true of a company’s contracting officer.
Contractor performance evaluations are now, more than ever, a crucial aspect of government contracting, as the evaluation process has received increased standardization, and evaluations are routinely shared across agencies. A poor performance review by one agency may negatively impact a contractor’s bid with a second agency. That review will not be written by a new cabinet appointee; it will be written by the same contracting officer contractors have dealt with for months. Maintaining good working relationships with those who are the “boots on the ground” remains essential.
Further, even though executive orders may grab headlines, most orders cannot, on their own, meaningfully alter procurement practice. Implementing regulations, which may take months or years to be finalized, are necessary to truly alter the procurement landscape. And most of that landscape—voluminous statutes, the Federal Acquisition Regulations, accompanying agency supplements—is unchanged, regardless of who sits at the top. Intimate knowledge of the policies and procedures that affect federal contractors’ businesses is still the best way to ensure success.
Stick to the fundamentals
Finally, resist the urge to change just because the occupant of the Oval Office has. It can be tempting to have a short-term outlook, but businesses are not built in two- and four-year cycles. Know what changes may be required to comply with the contract or submit a competitive bid, but do not overhaul your business model just because of a new president.
Additionally, if faced with volatility, control what you can control. Cross T’s and dot I’s. Communicate clearly. Be responsive to requests from the contracting officer. Contemporaneously document contract negotiations, modifications and problems. Create a record of following the rules. Adhere to notice procedures. When there is a problem, seek help from counsel sooner rather than later.
Follow the fundamentals of good business practice, and you will thrive regardless of whom lives at 1600 Pennsylvania Ave.
