Contracting

Trump tweets take IT contracting into uncertain territory

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.

About the Author

Mark Rockwell is a staff writer at FCW.

Before joining FCW, Rockwell was Washington correspondent for Government Security News, where he covered all aspects of homeland security from IT to detection dogs and border security. Over the last 25 years in Washington as a reporter, editor and correspondent, he has covered an increasingly wide array of high-tech issues for publications like Communications Week, Internet Week, Fiber Optics News, tele.com magazine and Wireless Week.

Rockwell received a Jesse H. Neal Award for his work covering telecommunications issues, and is a graduate of James Madison University.

Click here for previous articles by Rockwell. Contact him at mrockwell@fcw.com or follow him on Twitter at @MRockwell4.


The Fed 100

Read the profiles of all this year's winners.

Featured

  • Then-presidential candidate Donald Trump at a 2016 campaign event. Image: Shutterstock

    'Buy American' order puts procurement in the spotlight

    Some IT contractors are worried that the "buy American" executive order from President Trump could squeeze key innovators out of the market.

  • OMB chief Mick Mulvaney, shown here in as a member of Congress in 2013. (Photo credit Gage Skidmore/Flickr)

    White House taps old policies for new government makeover

    New guidance from OMB advises agencies to use shared services, GWACs and federal schedules for acquisition, and to leverage IT wherever possible in restructuring plans.

  • Shutterstock image (by Everett Historical): aerial of the Pentagon.

    What DOD's next CIO will have to deal with

    It could be months before the Defense Department has a new CIO, and he or she will face a host of organizational and operational challenges from Day One

  • USAF Gen. John Hyten

    General: Cyber Command needs new platform before NSA split

    U.S. Cyber Command should be elevated to a full combatant command as soon as possible, the head of Strategic Command told Congress, but it cannot be separated from the NSA until it has its own cyber platform.

  • Image from Shutterstock.

    DLA goes virtual

    The Defense Logistics Agency is in the midst of an ambitious campaign to eliminate its IT infrastructure and transition to using exclusively shared, hosted and virtual services.

  • Fed 100 logo

    The 2017 Federal 100

    The women and men who make up this year's Fed 100 are proof positive of what one person can make possibile in federal IT. Read on to learn more about each and every winner's accomplishments.

Reader comments

Thu, Jan 26, 2017

Companies that would like to stay anonymous or low-profile are dreaming. The Trump people can read and know the top 20 contractors. They have already grasped that the services companies are easier to understand, and, potentially, jawbone--because they are much simpler than, say, Lockmart's aircraft business, and lack the kinds of Congressional defenses. Further, much of the spade work has been done. Trump newbies in OMB and landing teams in agencies (not the transition landing teams) have discovered the GAO pile of reports and other investigations. Am afraid there is no place to hide, and the sooner that government customers and their services suppliers realize that, the better they will be. Nothing to fear but more competition and being held to the contract. Those are ground truth to this administration. All it needs is more appointee bodies to proceed.

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group