GovCon Updates of the Week Part 11

6/28/2021 - By Saltmarsh, Cleaveland & Gund

With Record High Contract Spending, Why Are There Less Small Business Contractors?

We all know the proverbial titans of Government contracting, and that these power players have consistently been taking a larger and larger share of Government contracts, which means that there are fewer federal dollars available for the small business community. This notable drop in small business contractors has hit women-owned and veteran-owned businesses especially hard and spotlights a growing imbalance in the types of companies awarded contracts under the Government’s current acquisition practices.

According to the Women’s Chamber of Commerce, the federal acquisition process category management system has accelerated a notable decrease in the number of small businesses taking part in Government contracts. This decrease has presented itself through a 24% fall in small business concerns, a 22% fall in women-owned small business concerns, and a 17% fall in veteran-owned small business concerns since 2017. They also noted that, as contracts continue to balloon in value, small business concerns cannot compete with the too big to fail contractors who have the resources to take advantage of these massive contracts.

One facet of category management that is facing mounting blame for the decrease of small business contractors is the Best-in-Class tier system. This system bases procurements on three tiers ranking the economic suitability of a vendor; reduces competition to preferred contractors that ultimately comprise of a small percentage of the market and is over-represented by larger contractors; and was designed to save agencies money. There is no dispute that the Best-in-Class system has met this goal, but this achievement has ultimately come at the cost of smaller vendors who can’t break into the tiered system like their larger counterparts.

In an effort to expand small business representation in contracting, the Women’s Chamber of Commerce has offered two paths of remediation: First, an executive order could be signed to classify all small business concerns as tier 3 vendors or exempt these small businesses from reservations for best-in-class contractors. Alternatively, Congress could pass legislation exempting small business concerns from best-in-class contract limitations, which would give small business concerns the same level of participation with prime contractors as their larger competitors.

As these discussions continue to progress up the Government’s ranks, the Women’s Chamber of Commerce has noted that the Office of Management and Budget (OMB) has seen their report and recommendations. It will be interesting to see where these discussions go and what changes may be in the pipeline for small business contractors.

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Communication Is the Bridge Between Confusion and Clarity:

The United States Air Force (USAF) has released a draft request for proposals for a potential $750 million contract to address non-personal services for the Remotely Piloted Aircraft Squadron Operation Center Enterprise (RPA-SOC). The pre-solicitation notice posted on SAM.gov, states that the RPA-SOC contract is structured as a small business set-aside acquisition program with an ordering period of eight years. The USAF noted that the center is responsible for the planning of squadron level missions, the coordination of airspace tasks, data management, and the generation of tasking and targeting information.

According to the pre-solicitation synopsis, “The RPA-SOC provides capability for squadron level mission planning, airspace coordination, tasking/targeting updates, threat warning, data archival and retrieval, establishing and maintaining situational awareness, dissemination and support in areas of mission execution, intelligence, weather administration and communications.” The potential vendor will be asked to install, configure, operate, manage, and troubleshoot equipment and networks in order to support long-haul USAF communications, as well as to provide help desk functions.

The USAF is accepting questions, comments, and feedback until July 2, 2021 with the final RFP planned to be posted in late July/early August of 2021. Small business vendors interested in the proposal should continue to follow news on the contract vehicle on SAM.gov.

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If Everything Is the #1 Cybersecurity Priority, Is Anything?

A couple of months ago, The National Institute of Standards and Technology (NIST) issued a call for position papers, in order to help establish its response and implementation efforts stemming from the Executive Order on Improving the Nation’s Cybersecurity. They received over 150 responses, and unsurprisingly, many of comments that they received were from industry and were centered around being as specific as possible in the definitions of terms like “critical software.” A narrowly defined scope of what constitutes critical software makes sense, otherwise, how can Government contractors be expected to prioritize what is truly critical and vulnerable to intrusion?

Two commenters took a slightly different approach. The Food and Drug Administration (FDA) and the National Science Foundation (NSF) commented on the complexities of narrowing the scope around what critical software entails. The FDA cited medical devices in their response… Obviously, software within a medical device is critical to the device functioning as intended, but the FDA also pointed out that there are several outside factors and third-party software applications that are also pivotal in ensuring that the device can be used safely and effectively. NSF cited the complex relationships with industrial control systems and how important things like utilities and the processes and software that manage those are.

While water, fuel, and electricity are resources that are outside of the scope of what most contractors can control and protect, it’s good to see federal agencies looking at the bigger picture, because it’s one thing to ensure that a life-saving medical device cannot be hacked, but what good is that device if it has to be plugged-in at a hospital and the hospital doesn’t have power. NIST has a difficult task on their hands, so stay tuned to see how they address the concerns raised by contractors and those from Federal agencies.

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