Trump tweets take IT contracting into uncertain territory

Presidential comments about high costs of specific contracts and empty top IT slots worry some contractors, but some industry groups and even a federal CIO see glimpses of possible acquisition reform.

Trump effect

President Donald Trump’s tweets -- especially some pointed challenges of big defense contracts just before he took office -- have some federal contractors a bit skittish going into the new year, wondering what kind of contracting landscape is developing.

“There is a lot of uncertainty in the air,” said one consultant close to the Office of Management and Budget’s IT efficiency initiatives who asked not to be identified. “The whole IT industry and federal IT operations are in a wait-and-see holding pattern,” he said, anticipating official word on key federal IT initiatives and leadership positions.

Back in December, then-President-elect Trump famously tweeted a challenge of Boeing’s $4.2 billion cost for a new Air Force One 747 and threatened to cancel the aircraft company’s contract. He followed shortly after with another tweet on the costs of Lockheed Martin’s F-35 joint strike fighter program.

The same remarks, however, have heartened some federal CIOs and industry representatives who see much-needed attention for contracting reform between the tweets.

The concerned contractors, who requested anonymity because they did not want to draw White House attention to their firms, said the unease isn’t necessarily because they are leery of being called on the carpet on their contracts. The problem is the uncertainty injected by Trump’s abrupt, starkly combative stance and ad-hoc decisions to revisit already-established agreements.

They’re also troubled by the silence on federal IT concerns, which had been a high-profile issue to the previous administration.

“There is no federal CIO,” one consultant said, and no permanent replacement yet named for Anne Rung, former administrator of the Office of Federal Procurement Policy, who left in October.

Rung had been the federal government’s top acquisition official and was behind a broad effort to rewrite acquisition policies that cover more than $450 billion in annual federal contract spending and the largest supply chain in the world. Category management, strategic sourcing and other efforts are still going, and wouldn’t seem to be political issues, but “there has been no public statement on federal IT” from the new administration, said the consultant.

Former federal CIO Tony Scott, meanwhile, was widely praised for bringing a sense of urgency to cybersecurity and IT management issues following the data breach at the Office of Personnel Management and the rocky launch of Healthcare.gov.

Both positions are crucial for federal IT, according to the consultant, as IT became a high-profile issue during in President Obama’s second term.

“We learned from Healthcare.gov that we have to get it right.”

Trump's pick to run OMB, Rep. Mick Mulvaney (R-S.C.), is going through the confirmation process, but there has been no official word on either the CIO or OFPP slot. Mulvaney has, however, stressed the importance of getting accurate and useful “big data” to inform his and Trump's decision making on management issues.

Other IT contractors are concerned about how the contracting process will work going forward. “Can I expect to bid one thing on a contract, then have to renegotiate it when the White House objects to it later?” one asked. “That makes bidding on big contracts a harder thing to do,” they said. “It’s not the tweets, it’s the uncertainty they inject.”

However, some see the new president’s interest in federal contracting as not all bad. One agency CIO told FCW Trump’s calling out of contractors might be a good thing overall for federal buyers.

The CIO said the tweets could mark a new “soft power” the president could leverage to keep contractors in line. On the downside, the CIO said that same soft power could also push some contractors to “overbid” to cover unforeseen costs down the road and avoid being perceived as inflating the price later on.

Contractors might also make sure they work more closely with their federal agency counterparts to ensure they have “a strong pulse” of the government’s needs, the CIO said.

“Contractors will want to know that the government representative is satisfied with the delivery of the product or services and isn't going to escalate to OMB and the White House project concerns,” said the CIO. “This also means we'll need to make sure on the government side we have competent, savvy leaders who can interface well with contractors on requirements and acceptance of deliverables.”

Trey Hodgkins, senior vice president for the public sector at the Information Technology Alliance for Public Sector, expressed more of a wait-and-see attitude about the White House’s attention to contracting.

“While there is concern about injecting a level of uncertainty into an already-uncertain market, the tech sector is encouraged by the interest the president has taken in government acquisition, and we see his attention on high-profile competitions as supportive of our advocacy to make government acquisition more commercial-like in nature,” Hodgkins said in a statement to FCW. “It also provides an opportunity to highlight how the existing acquisition processes are too outdated, government-unique and resistant to finding the best value for the taxpayer.”

Some of the president’s more recent moves, however, have sparked concerns among other industry groups.

On Inauguration Day, Trump told the Environmental Protection Agency to temporarily suspend all new contract and grant awards and, according to the Professional Services Council, possibly payments for work already performed under existing contracts.

PSC President and CEO David Berteau sent a letter on Jan. 25 to Acting EPA Commissioner Catherine McCabe raising concern about the action.

“A blunt, across the board halt on contracting actions will disrupt core government operations, drive away hard-to-find workers, and may cost more to restart than it saves by stopping,” Berteau’s letter said.  “Absent problems with specific contracts, we strongly recommend that these actions be of the shortest duration possible,” he added.

NEXT STORY: EPA plans tilt to agile

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