Podcast Show Notes

2025-02-21 Federal Market Insights Episode 2 — Session Overview

1. CMMC update: CMMC is getting closer to full implementation. Late last year the Title 32 Rule which implements and authorizes CMMC as a program was published. Currently, the Title 48 Rule which addresses how CMMC will be implemented in contracts is in its last phase of the regulatory process.
Companies need to continue working toward full implementation but for now, need to have a SSP, conduct the DoD self-assessment, and upload their score to SPRS. Cybersecurity continues to be a critical need and attacks not only continue but grow in sophistication. Many of the requirements are well within the capabilities of the average company. Ignoring the issue is not a solution. The threats will continue and without the required cybersecurity your company will not be eligible for DoD awards and possibly Federal Awards.
To get started, call WPI at 414-270-3600.
DoD has released guidance covering both certification levels required and the timing of implementation.
See to review this memo:
https://dodprocurementtoolbox.com/uploads/DOPSR_Cleared_OSD_Memo_CMMC_Implementation_Policy_d26075de0f.pdf

2. Budget: Both Houses of Congress are working on their budget proposals. The goal is to have a budget prior to March 14th. As we move closer to that date and if there is no budget, it will be important to stay alert to any correspondence from your PCO or ACO.

3. FAR Update: The President’s Executive Orders have created a need to update contracts and contractual requirements. GSA has issued two Class Waivers. Based upon language used in relation to the issuing of these waivers, additional changes are likely to be forthcoming.

4. Contract Cancelling: Federal contracts can be terminated either due to Default or the Convenience of the Government. Termination for Default is associated with the performance of the contractor. In these circumstances, the contractor has not fulfilled its obligations and even though given chances to correct the deficiencies, the contractor will have been determine not to have performed.
On the other hand, Termination for the Convenience of the Government is just that; a termination of a contract based upon the government’s decision. Contractor performance is not a factor; the termination will not affect the contractor’s performance record.
However, it is possible that a contract may be wrongfully terminated. The following article provides information and references that apply. Companies should be aware of these differences. There may be circumstances when questions should be asked or an attorney contacted.
For more information see:
What to do if your Federal Contract was wrongfully terminated by the Government
https://www.jdsupra.com/legalnews/what-to-do-if-your-federal-contract-was-8424454/

5. Iron Dome – Missile Defense – Drones: These topics seem to be receiving considerable attention. Given the variety of requirements, technology assumed to be involved, and the number of systems required, there may be business opportunities for companies with various skillsets. The opportunities will likely range from material sourcing, manufacturing, deployment, testing, operations, servicing and repair.
Small Businesses may see opportunities both as subcontractors and/or suppliers. Some small businesses that are involved with critical technologies may see opportunities related to Research and Development.
Additionally, as technology evolves it is possible that newer generations of systems will replace older systems.

—

DoD may be your perfect customer. While the path may appear obvious, there are a variety of “obstacles” that must be navigated. The following are some that should be considered.
1. Budget Uncertainty: Budget doesn’t equate to an automatic ability to spend. In order to spend money, a procurement needs the following:
1. Bona fide need
2. Authorized budget
3. Maximum practical competition
4. Contracting Officer
On the other hand, to receive an award a company must be determined to be Responsible, its prices fair and reasonable and all required Terms and Conditions must be satisfied or agreed to.

2. Government-Specific Terms: Federal (DoD) contract include FAR and Agency clauses. These are large in number, detailed in requirements and often require the business to determine when the requirements apply and what actions satisfy the clause requirements.
First time awardees typically will have a more difficult time “decoding” these clauses and what actions are required. Nevertheless, all awardees must review and comply with all contractual clauses. These typically range from Buy America Act, Labor laws to the relatively new cybersecurity requirements. More seasoned companies may have an easier time since they have previously dealt with the requirements. With each exposure they learned as they gained more experience.

3. Cost of Compliance: DoD contracts include many clauses. To comply, a company must review all applicable clauses and determine what actions if any must be taken. At a minimum, companies must expend time and effort to review the clauses, understand what is required and then determine what actions the company must take. While complying with some clauses such as Registering in SAM may be straightforward, other clauses such as the quickly upcoming CMMC requirements may require both time and hard costs. Still, other clauses such as Limitations of Subcontracting or Nonmanufacturer Rule require the company to understand when they apply, what actions are allowed, and how to comply.

4. Complex Contracting Processes: DoD does not have one standard method for conducting procurements. The characteristics of the procurement and other factors determine the procurement method to be used. Small requirements, termed micro-purchases, cost less than $10,000 can be purchased with a credit card and little to no competition. However, the purchase card holder must determine that the price is fair and reasonable. Other procurements might use a GSA Schedules contract or an Agency Indefinite Delivery Vehicle (IDV). Opportunities related to DLA’s DIBBS site generally are purchased via RFQs or Request for Quotations. Many other requirements are procured using the more formal Request for Proposal (RFP) process. There are pros and cons related to each of these forms of procurement. There are also different rules and requirements that companies need to know about and understand.

5. Security Requirements: DoD procurements may include sensitive information that require safeguarding. The most sensitive information is safeguarded under classified information programs. Other less critical information is known as Controlled Unclassified Information (CUI). This information must also be safeguarded. Companies handling CUI will require to implement DoD specified cybersecurity requirements. Later this year (2025) new requirements will fully implement the CMMC program which will require a company’s cybersecurity implementation to be reviewed and validated by an approved third party. Due to the detailed nature of these requirements, the number of requirements and compliance requirements companies must plan and budget for implementation of these requirements without which, once CMMC is implemented a company will not be eligible for contract award as either a prime or supply chain member.

6. Long Contracting Timelines: Small purchases (micro purchases) can be completed in a day. Most other procurements will require more time. Budgets are required, statements of work developed, and a synopsis of the opportunity posted to SAM.gov. Time must be allowed for responses and review of all qualifying submitted responses. Additional time may be required to review and make a selection. Still other procurements may require months or longer.

7. Contracting Workforce: The contracting workforce extends well beyond the Contracting Officer. The Contracting Officer is responsible for many aspects of a procurement but also acts as a “business consultant,” and ensures that FAR/DFAR requirements and other requirements are met. The Contractor Officer has a great deal of experience and knowledge but relies upon a broad team of other specialists that are involved as needed. During contract performance company personnel may interact with different members of the “contracting team.” Each member has their role. However, it is critical that the members of the awarded business’ team clearly understand that only one individual can direct/approved work. That individual is the PCO – the procurement contacting officer.

8. Partnerships and Integration: A micro purchase may be used to purchase a dozen bags of ice melt. On the other hand, an Aircraft Carrier will require a must more involved and complex process. A small business can tackle micro purchases on its own. A small business does not have the skills, experience, capacity, resources or financing to be able to construct an aircraft carrier. However, a small business can become a subcontractor or a supplier to the prime and be involved in the construction of an aircraft carrier. Such relationships are not automatic or easy to access. Small businesses must continually seek learn about these opportunities and network. Small businesses can also form Joint Ventures, Teaming agreements or potentially work to identify a Prime that may be interested in forming a Mentor Protégé Agreement. Again, these paths are not simple, guaranteed or easy to traverse. It takes, time, effort and opportunity to succeed.

9. Product-Mission Fit: “The government buys everything” is an often-used refrain. Over the course of time, this may be true. Companies should not automatically believe that a military unit or base will purchase what they have. Each organization has a defined budget and a list of needs that in most cases probably exceeds the budget. Decisions must be made and precious funds spent to ensure the mission capabilities of the unit are maintained. In many instances, the items be procured are specific such as a National Stock Numbered (NSN) item. The NSN defines the item, the quality, authorized manufactures, the specifications, material to be used and many other characteristics. While a NSN part may appear to be just like a commercial item, it is different and there is a stringent process used to qualify manufactures. On the other hand, there are procurements where the government specifies the performance required using a process known as performance-based contracting. Other procurements may include language that allows for substitutes as long as the item meets a form – fit and function requirement.

10. Intellectual Property Concerns: The contract will detail intellectual property requirements and companies should pay particular attention to these requirements. The FAR/DFAR provide guidance and requirements related to issues such as patents, data, copyrights. In general rights can vary and a company will need to refer to the appropriate clause(s) to understand their obligations and potential benefits. The SBIR/STTR program is a small business program for businesses involved in Research and Development. IP rights under this program are retained by the inventing company. Bottom line – review and understand your contract.