What The Wartime CEO Needs To Know About Covid-19 Government Contracting Rules, Risks and Opportunities
The federal government has always been a critically important market for CEOs to know (we provide deep insights into the federal market here). But times have changed now. Now this is not just an important market. Now your knowledge of this market could be critical to the survival of your firm. Every CEO seeking to survive and thrive in this new and dynamic environment should consider either making the government a new customer or a bigger customer.
This report focuses in on actionable insights CEOs need to know about the flowing from new regulations, requirements and the new Coronavirus Aid, Relief and Economic Security, or “CARES” Act. It concludes with specific recommendations for actions to take to accelerate your government business.
New regulations have been issued by multiple agencies, including the White House Office of Management and Budget (OMB) and Office of Personnel Management (OPM), which established frameworks for others to follow. Major announcements on how contractors should operate due to the pandemic have been issued by the General Services Administration, DoD, DHS, DoJ, HHS and SBA.
There are also many new opportunities associated with the COVID-19 crisis, many associated with medical equipment and services, but many others associated with logistics, supply and finding ways to operate with a remote workforce. Two new rounds of plus up spending was authorized by the federal government in response to this crisis (first $8 Billion then $46 Billion). On top of that congress has passed an economic stimulus package (the CARES act) that provides direct relief to multiple segments of the economy as well as increased spending for government agencies. Total cost of the first package was $2.2 Trillion and we are hearing this could go up from there.
Executive Summary of the CARES Act:
This is the third emergency bill that Congress has passed due to the pandemic. It provides significant relief for small businesses (less than 500 employees), including direct grants of emergency funds and loans that can be forgiven if the money is used in key ways for the economy. All OODA network members who are in this small business category should immediately speak with their accountants and review the SBA guidance on these programs and apply for relevant relief. The CARES act also provides bailouts to airlines, cash for health centers and hospitals, increases in funding for FDA, CDC, and medical supplies. Additionally, it authorizes more use of telehealth.
White House OMB Guidance:
The OMB has issued guidance for federal contractors and employees on a variety of topics. A key directive is on Harnessing Technology to Support Mission Continuity which includes encouraging all agencies to use existing collaboration tools and to think through ways of delivering services both to citizens and employees. Guidance was also issued on Managing Federal Contract Performance Issues Associated with the Novel Coronavirus. This guidance is meant to give federal agencies more flexibility in how contractors perform, including finding ways to let contractors telework, giving flexibility if contractors cannot deliver due to the virus, and ways to conduct business without face to face meetings and industry days. This guidance also underscores that since the President has declared a national emergency, there are some emergency procurement flexibilities now in place. This includes the ability to purchase more products and services at higher price points via simpler acquisition authorities.
DOD Guidance for Contractors:
DoD was early in encouraging the use of telework to ensure the military can continue to execute on its missions. Guidance was issued in March for contractors to work with contracting officers to determine what functions can be done by telework and which ones cannot. DoD is also following all OMB guidance possible.
SBA Guidance to Small Businesses:
The SBA has told small businesses that the government has the right to terminate contracts due to delays in deliveries so contractors should do everything possible to stay on schedule. But if there are going to be delays to communicate in advance as soon as possible.
DHS Guidance to Contractors:
The DHS has issued advisory guidance that prioritizes protection of critical infrastructure and its workforce during this crisis. Guidance has also been issued that strongly encourages telework and also lays out reporting requirements for any employee who comes into contact with a Covid-19 situation.
This is something we do not recommend CEOs read, just be aware that the White House Office of Personnel Management has issued guidance on human resources and personnel management during the crisis. Their guidance is focused on what government leaders need to do with and for their own staff. This is only worth reviewing by commercial leaders for awareness. If you desired reading more just for familiarization see the OPM Covid-19 page.
New Procurements Associated with Coronavirus
Multiple new procurements are underway. Many are fast moving, so rather than list them here I encourage you to get in touch with us to see if we are tracking current ones relevant for your mission. But here are some exemplars showing the type of needs the government is already asking for help with:
- Centers for Disease Control (CDC) has issues requests for industry help on topics like how Covid-19 is transmitted, how to do better diagnostics, and how to mitigate this threat.
- Health and Human Services (HHS) has issued requirements for diagnostic tests, vaccine research, therapeutics, ventilators and countermeasures.
- The DoD/Army Medical Consortium has issued technology needs requirements for: Point-of-care diagnostic that provides rapid and accurate confirmation of exposure to Covid-19, Prophylactics and therapeutics that can prevent and/or treat patients within a few hours to two days, potentially in a non-hospital environment. The consortium would prefer to repurpose FDA approved drugs and/or biologics or test those that have already safely demonstrated, Disease predictive modeling based on different data capture from data streams — including social media and artificial intelligence decision tools — that provide early warning to the government and medical service providers, Patient monitoring, tracking, and management system for in-home or non-hospital tele health services that can also connect to the Cerner electronic health record
- The US Air Force has been asking for inputs from industry on a range of related topics including:, Combating the spread of Covid-19 which includes predictive analytics and decision support, Welfare of citizens, such as HR functions and the movement of people and goods, Readiness, including coordinating with allies and partners, Logistics, such as supply chain protection, Industrial base impacts, which includes protection and expansion of critical assets, Medical, including telehealth and medical supplies
These are just representative examples of the rapid procurement issues underway, expect many more like these.
What is next?
- Expect continued focus on improving technologies for remote workforce cybersecurity and remote workforce telepresence/VTC. Also expect more spending on infrastructure that delivers virtual desktops.
- This focus on improving remote workforce access to resources will also shape spending at state and some local levels.
Our Recommendations For Your Action:
- If you are seeking to grow in service to the federal government we strongly encourage you to make the most of your OODA membership by contacting us and letting us know more about your capabilities.
- It is a common mistake to think of the federal government as one single market. It is too huge for that, and is getting even bigger now. To really determine where to focus you need to segment the federal market and understand which users will have a need for your product/service. It is common to start with a top level federal market segmentation of DoD, Intelligence Community, and Fed Civ, but you will need to know the market in much more fidelity before targeting your efforts. Additionally, those with need will need funding so you have to know budgets (we can help with this too).
- Also ensure your entire team is on distribution for our OODA Daily Pulse to track issues, risks and opportunities.
- Now is the time to assemble your external advisors and consultants with federal market experience. You need to move fast and pursue the right opportunities and doing so requires input from people who track this domain.
- If you already have a federal sales team, consider asking for weekly pipeline reviews if you do not do this already. Be sure to ask your team to track emerging opportunities that would require partnering with others for success.
The federal government spends almost $90B a year on technology. But serving this market can be hard, especially for a startup firm. Our analysts have decades of experience helping tech startup CEOs succeed in the federal space. Our special reporting on this topic provides actionable insights to help you prioritize your actions and optimize your strategy. Our federal technology expert Bob Gourley produces this series and is available to all OODA Network members seeking additional insights for growth in this sector. Review all in this series at: OODA’s Special Reporting on the Federal Technology Market.
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