Obama’s regulatory chief announces reforms at 30 agencies
May 31, 2011 by cs
Fleshing out agency responses to President Obama’s push to rethink regulations, Office of Information and Regulatory Administrator Cass Sunstein on Thursday announced alterations to long-standing rules under way at 30 federal agencies that together, he said, could save billions in dollars and millions of staff hours.
In his summary of agency progress 120 days after Obama’s Jan. 18 executive order, Sunstein said current paperwork reduction efforts at the Transportation and Labor departments and the Environmental Protection Agency alone could save $1 billion and tens of millions of work hours for state and local governments. He spoke at a talk titled “A Regulatory Look-Back: A First Look” at the American Enterprise Institute, his former employer, and he published a related op-ed on “21st-Century Regulation” in the May 26 Wall Street Journal.
The Obama initiative, Sunstein said, is “a corrective to national debate on regulation that has become polarized and stylized in a way not helpful. One side,” he said, “defends reductions in deaths on the highway, fighting fraud and abuse, keeping air and water clean and our food safe. But more recently, the other side says such regulations impair competitiveness, undermine innovation and ultimately cost jobs.
“They are legitimate arguments, but we can’t be solving serious problems in the abstract. The polarized debate is stuck in the past.”
A modern regulatory approach, he said, cannot rely on “anecdotes or intuition,” but instead must move toward “real-world random testing” of the benefits and harms of regulations. This requires “a change in culture in Washington to focus constantly on what is and what is not working,” he said. In the future, “agencies must hard-wire such scrutiny into agency processes.”
Today’s professional regulators “know much more than they knew during the New Deal and the Great Society,” or even during the 1980s and 1990s, he added. “Now we have state-of-the-art technology for cataloging the impact, risks and costs of regulations. Sometimes in reducing one risk, you increase another and there are ancillary harms,” he said. “But there are also ancillary benefits, and lives are saved.” What is desirable, he said, is “free choice, which both provides liberty and costs less.” Simpler regulations and public disclosure “help produce informed choices and creative approaches,” Sunstein said.
Sunstein made a bid to bridge the partisan divide. “It’s true that people’s values differ, but when the evidence is clear, it will lead in a direction even if there is an intensive difference in values. If a regulation brings big costs and little benefit, then citizens are unlikely to like it regardless of whether they are elephants or donkeys,” he said.
Examples of agencies’ current work include 70 initiatives at Transportation, 50 reforms at the Health and Human Resources Department, and 12 short-term high-priority projects at EPA. The Treasury Department has a five-year paperless initiative that will save 12 million pounds of paper and $400 million, Sunstein said.
EPA recently decided that that classifying milk as an oil — and thus requiring precautions to prevent oil spills — was an unjustifiable burden on dairy farmers, and so the resulting easing of rules will save industry $1 billion in the next decade. Similarly, EPA determined that gas stations no longer need air pollution recovery systems because modern vehicles do the job, saving upwards of $60 million annually, he said. And the Occupational Safety and Health Administration, he said, will save millions of dollars by eliminating 1.9 million annual hours of redundant employer reporting.
“Many of the [reforms] focus on the small businesses that create jobs,” Sunstein said. “And some are a fundamental rethinking of how things have been done.”
He is also determined to rid the Code of Federal Regulations of references to countries that “no longer exist.”
Laying out four principles, Sunstein said modern regulations should encourage public participation through ready access to scientific and technical information; should be harmonized and simplified to boost innovation; should use quantification to catalog costs and benefits; and emphasize freedom of choice, which “promotes compliance.”
In response to a questioner, Sunstein acknowledged that some of the recent changes were expansions of regulations rather than eliminations.
The National Association of Manufacturers, which has long been critical of Obama’s approach to regulation, reacted to Sunstein’s announcement with a statement: “Manufacturers are encouraged by the Obama administration’s efforts to streamline or remove several outdated and unnecessary regulations to allow manufacturers to focus on what matters most — creating jobs and economic growth. However, manufacturing workers will not fully benefit until the crushing burden of proposed new regulations is brought under control.
“The administration has taken several positive steps recently,” the group said. mentioning EPA’s effort on industrial boilers and OSHA’s work on noise standards as indicators that the administration has heard the concerns of manufacturers. “But new burdensome regulations such as those proposed by EPA to regulate greenhouse gas emissions and change ozone standards are a real threat to job creators and the economy. While today’s announcement is a great step, more must be done to limit the cumulative burden of regulations on businesses.”
Matt Madia, regulatory policy analyst for OMB Watch, a monitoring nonprofit, had a wait-and-see response. “There’s nothing wrong with doing a review,” he said, “but we should not lose sight of the fact that these regulations were written for a reason — to protect the environment, human health and the economy.”
Sunstein said there currently are 120 rules under review at the Office of Management and Budget and that the look back has not caused any noticeable slowdown.
The agency actions released today are for public comment, and should be finalized in “roughly 80 days,” he said.
Sunstein called his initiative “a defining moment” that will have impact decades in the future. He quoted Alexander Hamilton’s first Federalist paper, in which the Founding Father asked whether the country would be guided by “reflection and choice or be forever destined to depend on accident and force.”
– by Charles S. Clark – Government Executive – May 26, 2011 at http://www.govexec.com/story_page.cfm?articleid=47880&dcn=e_gvet
Warner Robins Air Force Base holds small business event June 22
May 27, 2011 by cs
If you are interested in learning about the tools needed to pursue business with the Warner Robins Air Logistics Center (WR-ALC), the place to be is Warner Robins, GA on June 22, 2011.
(For a list of recurring products and services procured by WR-ALC, please consult: http://www.robins.af.mil/shared/media/document/AFD-081216-015.pdf )
The event will begin at 8:00 am with opening remarks by Major General Robet McMahon, Commander of WR-ALC.
Presentations are scheduled to be made by the Small Business Administration’s Procurement Center Representative (PCR) as well as staff of the Air Force Reserve Command’s Small Business Office and the WR-ALC’s Office of Small Business Programs.
Additional presentations will be made by the Small Business Development Center, the Georgia Tech Procurement Assistance Center (GTPAC), and the General Services Administration. GTPAC’s director Chuck Schadl will be providing instruction on how to do research on contract opportunities in the government marketplace.
The event will end at 12:00 noon.
Attendance is free of charge, but is limited to the first 240 persons who pre-register. To register, contact Ms. Crystal Storie at crystal.storie@robins.af.mil or (478) 926-5873. You must pre-register to attend, and no more than 2 persons per company may attend.
The event will be held in the Robert L. Scott, Jr. Theater, Museum of Aviation Eagle Building, Robins AFB, Georgia. For a map and directions, please click on this link: Museum Layout & Directions
Georgia Tech-based startup wins business competition
May 27, 2011 by cs
Pindrop Security, a new company based on technology developed by School of Computer Science researchers to verify caller ID, has won the 2011 GRA/TAG Business Launch Competition.
Cosponsored by the Georgia Research Alliance (GRA) and the Technology Association of Georgia (TAG), the competition facilitates connections between the younger entrepreneurial community and more seasoned entrepreneurs. Pindrop, founded by primary researcher and Ph.D. student Vijay Balasubramaniyan, beat out three other finalists to claim the $50,000 cash first prize, as well as more than $200,000 in donated services from the Atlanta business community.
Originally called “PinDr0p,” the technology works by analyzing audio imprints left on calls by the multiple networks—cellular, voiceover IP, public switched
telephone networks—through which they travel. It uses these imprints to positively identify the calling phone with high accuracy. Equally important is
that the identification is made within 15 seconds of initial call placement.
Balasubramaniyan developed Pindrop in collaboration with School of Computer Science and Georgia Tech Information Security Center (GTISC) faculty, including Assistant Professor Patrick Traynor and Professor and GTISC Director Mustaque Ahamad. Earlier this year, TAG named Pindrop Security a Georgia Top 40 Innovation Company, and it also finished second in the 2011 Startup Riot.
“Winning the prize feels great, particularly because there were 88 other great companies competing for it,” Balasubramaniyan said. “It provides great
validation for the technology, the efforts of the team and the market potential. Georgia is a great place to start and build a security-focused technology
company, and we’re pleased to work with the local community to support economic growth and development as we expand our reach into the financial services, government and consumer markets.”
“GTISC researchers are leaders in understanding emerging cyber security threats and in developing innovative techniques that can provide effective
solutions for real-world problems,” said Ahamad. “Pindrop is just another example of this, and it will help maintain Atlanta’s reputation as a security
industry hub.”
Balasubramaniyan said the company’s next step will be to use its GRA/TAG competition winnings to hire staff, with plans underway for the next software
release in the fourth quarter of this year.
– published May 26, 2011 – For more information contact: Brendan Streich, Georgia Tech College of Computing, Office of Communications - bstreich@cc.gatech.edu – Related links appear below:
New FCC site pushes broadband on small businesses
May 20, 2011 by cs
A new web portal launched Monday by the Federal Communications Commission, aims to increase broadband use among U.S. small businesses at the same time it ramps up those businesses’ cybersecurity savvy.
The site lists 10 basic cybersecurity tips for small businesses, including installing secure firewalls and antivirus software and creating unique log-ons for all employees.
The site also touts FCC resources for small businesses looking to increase their broadband use, such as a series of workshops and a mentorship program the agency sponsors in cooperation with a small business nonprofit group.
The new portal was announced at a cybersecurity roundtable at FCC headquarters, connected with the government’s Small Business Week, according to Fedscoop, a media company focusing on government information technology.
The small business portal appears to be connected with the FCC Encyclopedia, an A-to-Z listing – Accessing Spectrum to World Radiocommunication Conference, actually – of important cyber definitions the agency has been collecting since 2003.
“FCC Encyclopedia” appears at the top of the page, but the main Encyclopedia page doesn’t link back to the small business page, which appears to be only available through its own URL.
– by Joseph Marks – NextGov – 05/17/11 – at http://techinsider.nextgov.com/2011/05/new_fcc_site_pushes_broadband_on_small_businesses.php
Think tank says Defense insourcing decisions based on flimsy analysis
May 19, 2011 by cs
A new study pours cold water on the notion that insourcing saves the government money, and calls for the Pentagon to conduct a more careful analysis of how much it costs to bring in-house jobs that have been performed by contractors.
The study, titled, “DoD Workforce Cost Realism Assessment,” was released May 17 by the nonpartisan Center for Strategic and International Studies. The authors do not take sides in the insourcing vs. outsourcing debate, but do fault the Obama administration for lacking reliable cost data and for making hiring decisions that could end up wasting billions of taxpayer dollars.
Since 2009, the administration has directed federal agencies to shift work that had been performed by contractors to government employees. With billions of federal dollars and thousands of jobs at stake, insourcing policies have caused widespread anxiety in the contractor community. Defense Department contractors, particularly, have stood to lose the most, as the Pentagon is the government’s biggest buyer of contracted-out services. In 2010, the Pentagon added 17,000 employees to its payroll as a result of insourcing efforts.
Administration officials, including Defense Secretary Robert Gates, have strongly backed insourcing policies as necessary in order to rebalance the work
force after a decade of rampant outsourcing. Since 9/11, federal spending on service contracts more than doubled — from $164 billion in 2000 to $343 billion in 2010. The Defense Department in 2010 awarded $161 billion worth of service contracts, up from $67 billion in 2000.
The potential value of insourcing is clear for “inherently governmental functions,” such as contract management and for areas where the Defense
Department needs to strengthen its managerial or technical capability, the CSIS study says. “However, it is not clear that insourcing can provide large
budgetary savings,” states the report. “In fact, an extensive empirical literature review indicates that increasing in-house support functions such as
building maintenance, printing, laundry, and food service would result in a cost increase of between 20 to 40 percent.”
The study highlights inconsistencies in how public-sector costs are measured vis-à-vis contractor costs. “Given differences in accounting systems between
public and private service providers, as well as the problems inherent in allocating joint overhead costs and estimating the cost of risk, it may often be
impossible for even the most expert and objective observer to compare in-house and contractor costs with any useful degree of accuracy,” says the report.
CSIS proposes an alternative methodology — based on competition — for conducting better sourcing decisions between private and public providers. The
Office of Management and Budget circular A-76 process allows for public-private competition to determine whether jobs should be kept in house or outsourced.
Congress in 2009 suspended A-76 competitions in an effort to bolster insourcing.
CSIS says the A-76 rule offers a more suitable, although still insufficient, approach to cost comparisons in public-private competitions as a foundation for in- and outsourcing decisions. “The challenge of conducting accurate cost estimating has importance beyond the issue of insourcing,” the study says. “In a time of budgetary strain, the U.S. government must have repeatable, verifiable, and data-driven mechanisms for making decisions and understanding their resource implications, including associated costs.”
The Defense Department’s insourcing strategy calls for replacing more than 30,000 contractors with government civilian workers by 2015. Gates defended the plan as key to “restore balance” to the work force by returning the ratio of contractors to civilians to its 2001 level. The plan was also based on an
assumption that federal civilians would be significantly less costly than the contractors they replaced, the study notes. “As a result, DoD planned to achieve
budgetary savings equal to 40 percent of the cost of the contractors being replaced.” More recent statements claimed savings of 25 percent, says the
report. “Though neither figure appears justifiable, research has shown that about 65 percent any savings achieved through public-private competitions derive from the competition itself, not from any intrinsic advantage” in insourcing.
There are legitimate reasons for the Pentagon to increase its in-house acquisition work force and reduce the role of contractors in order to control conflicts of interest and fraud, the study says. Other positions might be insourced to provide career progression for federal employees with scientific, engineering, and technical skills. “Without an adequate base in these areas, DoD cannot be a good manager or a smart buyer,” the study says.
But when cost control is the priority, only competition works, says CSIS. “History is clear: the absence of potential competition leads inexorably to cost
growth.” On March 4, 2009, President Obama signed a memorandum that emphasized the
importance of competition in controlling costs for the entire federal
government. Yet the Defense Department’s April 2010 guidance on insourcing “does
not cite the degree of competition as a factor in determining which contracts to
insource,” the study says.
Insourcing efforts are well under way, CSIS notes, and while “cost is
reportedly the rationale for half of the insourcing decisions, there is not
enough public information to estimate even the likely range of overall real,
achieved savings. … Anecdotal evidence regarding savings is unsatisfactory.”
CSIS also warns that sourcing decisions — whether outsourcing or insourcing —
based exclusively on anticipated short-term cost savings can have unintended
consequences. “In discussions with CSIS, representatives of several small firms
that provide temporary staffing services indicated that DoD is not merely
shifting positions in-house,” says the study. “Instead, DoD managers are
targeting individual employees from those firms for the newly insourced
positions. … Many of these firms are small businesses that have made a
significant investment in recruiting and supplying high-quality personnel with
valuable skills to DoD. They were able to bid for one-year contracts with option
years in the expectation that, if their performance was good, the options would
be exercised. Although converting these workers to temporary or permanent DoD
employees may yield short-term savings, it is something that can only be done
once. In the future, there will be fewer firms willing to recruit on DoD’s
behalf, and those that do will require a stronger commitment on the part of
their employees not to take DoD positions. Consequently, DoD will pay a higher
price for such services due to the perceived business risk.”
According to the Defense Department, half of the positions being insourced
are for reasons other than cost: 8 percent because they are inherently
governmental and another 42 percent for reasons of institutional capabilities
(readiness) or work force management.
CSIS calls for a slowdown in insourcing and for tackling this effort as a
“good-government initiative, rather than a budget drill [so it] might give
managers a better chance to identify and recruit for those specific functions
and positions that should be moved in-house.”
A budget crunch at the Pentagon, meanwhile, already has put a damper on insourcing. The military services have been
directed to maintain their civilian work forces at the same size they were in
fiscal year 2010. Some agencies that had been on hiring sprees will either have
to halt insourcing or eliminate other jobs to fund new hires. “The insourcing
that hasn’t taken place by now probably will be held to the fiscal year 2010,”
said a senior Air Force official.
Air Force Undersecretary Erin Conaton told a recent industry gathering that
the service’s original objective of hiring 20,000 government workers has been
slashed to 4,000.
– by Sandra Erwin, May 17, 2011, National Defense magazine at http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=419
SBA proposes increase in small biz transport and warehousing size standards
May 16, 2011 by cs
The U.S. Small Business Administration published a proposed rule in The Federal Register on May 13, 2011 that would adjust the size definition of small businesses in the transportation and warehousing sector to reflect changes in marketplace.
The proposed revisions would increase the revenue-based size definition businesses must meet to qualify as small businesses in 22 industries of the transportation and warehousing sector. As a part of its ongoing review of all size standards, the SBA evaluated all industries in this sector that have revenue-based size standards to determine whether the size standards should be retained or revised.
In 2007, the SBA began the process of reviewing and updating size standards based on industry-specific data. Before this, the last overall review of size standards occurred more than 25 years ago. Under provisions in the Small Business Jobs Act of 2010, SBA will continue its comprehensive review of all size standards for the next several years.
The proposed changes take into account the structural characteristics within individual industries, including average firm size, the degree of competition, and federal government contracting trends to ensure that size definitions reflect current economic conditions within those industries.
The changes would allow some small businesses that are close to exceeding their current size standards to retain small business
eligibility under higher size standards, give federal agencies a larger selection of small businesses to choose from for small business procurement opportunities and allow small businesses to qualify for financial assistance from the SBA. SBA estimates as many as 1,200 additional firms will become eligible for SBA programs as a result of the proposed revisions, if they are adopted.
The SBA issued a White Paper entitled “Size Standards Methodology” on Oct. 21, 2009, which explains how the SBA establishes, reviews and modifies its receipts-based and employee-based small business size standards. It can be viewed at http://www.sba.gov/size.
Comments can be submitted on this proposed rule on or before July 13, 2011, online at: www.regulations.gov, where they will be posted, or mailed to Khem R. Sharma, chief, Size Standards Division, 409 3rd St., SW, Mail Code 6530, Washington, DC 20416. For more information about SBA’s revisions to its small business size standards, click on “What’s New” on SBA’s Web site at: http://www.sba.gov/size.
SBA also has extended for an extra 30 days the comment period for a proposed rule published March 16 increasing the size standards for 35 industries and one sub-industry in the professional, scientific and technical services and other services sectors.
Comments on that rule will be accepted up until June 15.
The industries that will be affected by the proposal published on May 13, 2011 include the following NAICS codes:
[Note: Following each NAICS code is the Proposed Standard, followed by the Current Standard. All figures are in millions of dollars.]
481219 Other Non Scheduled Air Transportation $14.0 $7.0
485111 Mixed Mode Transit Systems $14.0 $7.0
485112 Commuter Rail Systems $14.0 $7.0
485113 Bus and Other Motor Vehicle Transit Systems $14.0 $7.0
485119 Other Urban Transit Systems $14.0 $7.0
485210 Interurban and Rural Bus Transportation $14.0 $7.0
485310 Taxi Service $14.0 $7.0
485320 Limousine Service $14.0 $7.0
485410 School and Employee Bus Transportation $14.0 $7.0
485510 Charter Bus Industry $14.0 $7.0
485991 Special Needs Transportation $14.0 $7.0
485999 All Other Transit and Ground Passenger Transportation $14.0 $7.0
486210 Pipeline Transportation of Natural Gas $25.5 $7.0
488111 Air Traffic Control $30.0 $7.0
488119 Other Airport Operations $30.0 $7.0
488190 Other Support Activities for Air Transportation $30.0 $7.0
488210 Support Activities for Rail Transportation $14.0 $7.0
488310 Port and Harbor Operations $35.5 $25.5
488320 Marine Cargo Handling $35.5 $25.5
488330 Navigational Services to Shipping $35.5 $7.0
488390 Other Support Activities for Water Transportation $35.5 $7.0
488510 Freight Transportation Arrangement $14.0 $7.0
GSA launches $2.5B cloud computing procurement
May 13, 2011 by cs
The General Services Administration (GSA) has issued a request for quotations for cloud computing services, including email-as-a-service, office automation and electronic records management.
The Federal Cloud Computing Initiative is partnering with GSA SmartBuy and the Defense Department’s Enterprise Software initiative for the cloud services contracts. The contracts are reported to be worth an estimated $2.5 billion over five years. Multiple contracts are expected to be awarded.
The goal is to deliver email-as-a-service acquisition capabilities via enterprisewide blanket purchase agreements. “The objective of this RFQ is to offer five key service offerings through EaaS providers for ordering activities,” the RFQ states.
The requirements are divided into five lots, including mandatory email-as-a-service, migration and integration services; and optional office automation and electronic record management services.
For each service, vendors have a choice of providing a government community cloud, provider-furnished-equipment private cloud, secret enclave or public cloud.
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Who’s who on GSA cloud infrastructure contract
About the Author: Alice Lipowicz is a staff writer for Washington Technology. Published May 10, 2011 at http://washingtontechnology.com/Articles/2011/05/10/GSA-issues-RFQ-for-cloud-computing-options.aspx?s=wtdaily_110511&p=1
7 keys to winning more business in today’s market
May 13, 2011 by cs
As is typically the case in IT, the primary challenge of developing or optimizing an automated business development and capture management process relates to people, not technology. However, overcoming cultural resistance is easier by following these steps.
- Think big picture. Business development is everyone’s responsibility, said Scott Campbell, senior executive consultant at Robbins-Gioia, a program management consulting firm. “It doesn’t mean that there aren’t official roles and responsibilities associated with business development, but there needs to be a mindset that pervades the company’s culture,” he said. “Employees, no matter their role, ought always to be thinking about how the company can provide greater value and looking for customer pain points.”
- Take the lead. That culture needs to start with top executives, who need to take the opportunity to understand their business capture capabilities and gaps, keep a hand in the development of a good process and pound the pulpit on business development. In all communications vehicles, they need to impart the messages that identifying and capturing new business is critical to the overall success of the company and territorialism won’t be tolerated. They should emphasize that all leads and information are company assets that are to be valued, shared and managed effectively. “Generally, it’s the leadership that sets the tone, and when they do, they can expect much better results,” said Bill Scheessele, president and CEO of Mastering Business Development Inc.
- Know thyself. Many employees are subject-matter experts in their own narrow subjects. To get better at identifying business opportunities, companies should train employees on all of the core capabilities of the company and how they work in tandem to provide value to potential customers. “If you don’t have that context, it can be hard to recognize business opportunities when they present themselves,” Campbell said.
- Know your customer. By the same token, employees should be encouraged to understand the vision, mission and tasks of customers and potential customers.
- Simplify whenever possible. As companies go about defining and setting up a process to collect, share and track business development opportunities, they need to make sure that the process aligns with how their personnel work and isn’t so cumbersome that already-busy people refuse or fail to use it as part of their daily tasks. Require the minimum number of steps to be effective.
- Accept help. When possible, companies should consider investing in dedicated resources to manage the business development process, Campbell said. “In this current environment, where people are going a million miles an hour, making this extra investment will help keep the company’s eyes above the treetops and maintain that broader visibility on the opportunities that are out there,” he said.
- Train, train, train. Whatever tools are chosen, whether commercial, customized or homegrown, employees — across the enterprise, from top executives to administrative staff members — need to be educated on how to use them in the context of the company’s individual business development process, said Robert Lohfeld, founder and CEO of Lohfeld Consulting. In time, as the process and tools are tweaked, training should be updated and refreshed.
About the Author: Heather Hayes is a freelance writer based in Clifford, VA – as published 5/3/2011 in Washington Technology at http://washingtontechnology.com/Articles/2011/05/02/STRATEGY-Top-Contractor-tools-sidebar.aspx?p=1.
IRS delays contractor tax withholding
May 12, 2011 by cs
The Internal Revenue Service is pushing off an unpopular requirement that the government withhold a percentage of its payments to most contractors for tax purposes.
The final rule, published in Monday’s (5/9/2011) Federal Register, delays a mandate that federal, state and local governments with expenditures of more than $100 million withhold 3 percent of payments for products and services worth more than $10,000, including nonconfidential or classified contracts, grants to for-profit companies, and farm and Medicare payments. The requirement, scheduled to take effect on Jan. 1, 2012, now will be delayed to apply to payments on new contracts made after Dec. 31, 2012. The rule will affect all contracts starting Dec. 31, 2013.
The requirement, included in the 2005 Tax Increase Prevention and Reconciliation Act to ensure that individuals and companies with outstanding tax debts do not receive new payments from the federal government, would closely mirror the withholding system on individual salaries and wages. The government would set aside 3 percent of the gross payments and the information and funds would then be transmitted to the IRS. At the end of the year, the amount withheld would be credited toward taxes owed.
Lawmakers earlier this year proposed repealing the controversial provision, and Obama administration officials in March expressed support for delaying the requirement while agencies prepare to implement the change.
Critics have suggested that the provision is unnecessarily burdensome during an economic downturn, noting that other measures exist to ensure contractor tax compliance.
“This is an 11th-hour quasi-reprieve from a temporary tax increase that would have eliminated jobs and helped only the IRS,” said Phil Bond, president and chief executive officer of TechAmerica, a technology-based trade association. “It is a scheme to force companies to pay taxes in advance and then wait for the IRS to send them a refund a year later. A one-year extension of the withholding and reporting requirements is a significant, positive development but far from a solution.”
Roger Jordan, vice president of government relations at the Professional Services Council, a contractor trade group, on Monday also applauded the delay but called the requirement itself “bad policy.”
“The withholding requirement would significantly reduce companies’ cash flow at a time when the current economic environment is already squeezing their ability to meet operating expenses,” he said. “While it’s appropriate to focus on how to ensure that any tax liabilities government contractors and other organizations owe are properly collected, other regulations have been implemented in recent years that effectively ensure contractors are meeting their tax obligations.”
– by Emily Long – GovExec.com – May 9, 2011 – at http://www.govexec.com/story_page_pf.cfm?articleid=47769&printerfriendlyvers=1
Mega-contractors don’t dominate DOD
May 11, 2011 by cs
With the rampant merger and acqusition activity in the market, the conventional wisdom might say that the defense industry will be dominated by a few mega-players.
But not so says a new study from the Center for Strategic and International Studies.
“There is little evidence in the data that the defense industry is consolidating into an oligopoly dominated by a small number of incumbent firms,” the center’s Defense Industrial Initiatives Group wrote in a report released on May 6. The report analyzed DOD’s contract spending and its supplier base.
In fact, the report states, contractors have been coming and going throughout in the past decade, despite the fact that the top five defense contractors retained their position from 1999 to 2009.
“There were dynamic changes in the composition of the top 20 contractors in the industry” during the past decade, the report said.
However, another expert said it can be misleading to analyze the market by looking at a list of leading contractors. Instead, the true makeup of the market emerges by digging into specific types of goods and services. he said. The trends in competition and contractors emerge when looking at the number of companies capable of handling projects such as building unmanned aerial vehicles or surveillance satellites.
“Gross tabulations like ranking lists have never been effective predictors of the erosion happening to the defense industrial base,” said Bruce Williamson, an economist at the National Defense Business Institute at the University of Tennessee in Knoxville.
Either way, defense officials are concerned about the consolidation of companies.
“The department [DOD] is very conscious that the top tiers of the defense industry have already consolidated significantly,” Frank Kendall, principal deputy undersecretary of defense for acquisition, technology, and logistics, told the Senate Armed Services Committee on Emerging Threats and Capabilities Subcommittee on May 3.
And officials are predicting more merger and acquisition activity.
“We do expect some increased activity at the middle and lower tiers — activity that we will monitor closely,” Kendall said.
In further studying procurement data, CSIS found heath care companies rose closer to the top of DOD’s suppliers with the strong overall services contracts and energy companies and ground vehicle producers grew in the products side.
The services sector was the fastest growing sector, and the list of contractors changed significantly from 1999 to 2009.
“This indicates that there is a healthy circulation of contractors in and out of the top positions by value of contracts awarded,” the report states.
CSIS also found the mid-sized companies still were squeezed by larger corporations and small firms.
About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week. This article appeared 5/6/2011 at http://washingtontechnology.com/articles/2011/05/06/csis-defense-industrial-base-market-changes.aspx?s=wtdaily_090511