Georgia Tech Procurement Assistance Center

U.S. defense contractors report that business is booming — thanks to new spending, lower taxes

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The U.S. defense industry is on track for one of its best years in recent memory.

The five largest U.S. defense contractors — Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics — reported healthy financial results for the third quarter, in a series of earnings reports over the past week.

They benefited from a defense budget that has grown significantly under a Republican-controlled Congress and White House, as well as a 2017 tax overhaul that slashed their corporate tax rates.

“We’re seeing more and more signs of sustained long-term stable defense budget in the U.S.,” Boeing chief executive Dennis Muilenburg said Wednesday.

They have also taken advantage of a more stable budget environment that has made it easier for them to prepare for the future. Last year, Congress lifted the “sequestration” budget caps that have limited defense spending since 2013. For the first time in years, lawmakers passed their most recent spending bill without a “continuing resolution,” giving defense firms a better blueprint for their future sales.

Keep reading this article at: https://www.washingtonpost.com/business/2018/10/26/us-defense-contractors-report-that-business-is-booming-thanks-new-spending-lower-taxes

Billions of dollars in construction funding in FY 2019 funding bills

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On Sept. 13, Congress passed a Fiscal Year (FY) 2019 appropriations bill — which the president is expected to sign into law —t hat will provide significant amounts of funding for military construction projects through the U.S. Army Corps of Engineers (USACE) and Naval Facilities Engineering Command (NAVFAC); hospital, medical clinic and cemetery projects through the Department of Veteran Affairs (VA); and harbor maintenance, lock, dam, levee and environmental restoration projects through the USACE Civil Works Program.

The bill provides a total of $10.3 billion for military construction projects. This is an increase of $241 million, or 2.4 percent, above the enacted FY 2018 level. The bill appropriates $1.6 billion to fund construction, operation, and maintenance of military family housing for fiscal year 2019. This is $173 million above the fiscal year 2018 level and the same as the president’s FY 2019 budget request.

Major and minor construction within the VA is funded at $1.8 billion. In addition, $2 billion is provided for infrastructure repair, with the funding allocated to major and minor construction and non-recurring maintenance. Within the infrastructure total funding, $750 million is targeted to seismic corrections at VA facilities nationwide.

Keep reading this article at: http://advocacy.agc.org/billions-of-dollars-in-construction-funding-in-fy-2019-funding-bills/

Pentagon races to empty its coffers by month’s end

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The federal government is primed to spend as much as $300 billion in the final quarter of fiscal 2018 as agencies rush to obligate money appropriated by Congress before Sept. 30 or return it to the Treasury Department.

The spending spree is the product of the omnibus budget agreement signed six months late in March coupled with funding increases of $80 billion for defense and $63 billion for civilian agencies. The shortened time frame left procurement officials scrambling to find ways to spend the money.

Through August, defense and civilian agencies obligated some $300 billion in contracts. But to spend all the money appropriated to them by Congress, they may have to obligate well over $200 billion more in the final quarter of fiscal 2018, which ends in two weeks.

Keep reading this article at: https://www.defenseone.com/politics/2018/09/unprecedented-government-spending-spree-picks-speed/151348

Infrastructure spending: Which state is falling apart the worst?

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In the Donald Trump era, the United States appears to be more politically divided than it has been in decades. Still, there are matters of public policy that most Americans can agree on — chief among them is investment in infrastructure. According to a recent non-partisan Gallup poll, three out of four Americans support the president’s plan of spending more federal money on infrastructure.

The president proposed a $1 trillion plan to improve aging roads, bridges, and tunnels across the country. While funding the project has proven to be a political challenge, broad public support for the plan is rooted in necessity.

About seven out of every 100 miles of roadway nationwide are in poor condition; 9 percent of bridges nationwide are structurally deficient, meaning that they are in need of some repair; and 17 percent of dams in the country have a high hazard potential — meaning a functional failure would result in the loss of life.

Keep reading this article at: https://www.usatoday.com/story/money/economy/2018/08/13/infrastructure-spending-states-that-are-falling-apart/37270513/

Shutdown advice for contractors: If a stop-work order comes, stop work

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Congress’s progress on its 12 annual spending bills for fiscal 2019 means “we’re in pretty good shape ” for funding federal agencies, David Berteau, president and CEO of the 400-member Professional Services Council, told his contractor members in a webinar last Wednesday.

Congressional appropriators have reported all spending bills from committee, with a half-dozen approved by full chambers, Berteau noted, lawmakers’ most productive pace in 12 or 13 years. But with only 11 legislative days left before the fiscal year ends Sept. 30, there is a “slim chance” of all 12 getting through conference or a major negotiated omnibus deal, which is why it is “prudent” for agencies and contractors to prepare for the possibility of a lapse in appropriations. Getting all the bills signed by Oct. 1 “is subject to a lot of decisions affected by both votes and politics,” Berteau said.

“The reason we [present preparation guidance for our members] is not to predict a [shutdown]–we hope there is no government shutdown,” added Alan Chvotkin, PSC’s executive vice president and counsel, but because reacting to agency closures “is an arcane area.”

Keep reading this article at: https://www.govexec.com/contracting/2018/08/shutdown-advice-contractors-if-stop-work-order-comes-stop-work/150578/

Get ready for a massive government spending spree

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A government spending spree of potentially historic proportions will play out over the final seven weeks of fiscal 2018, as federal agencies look to spend $140 billion more than they thought they’d get before Congress signed the omnibus spending bill.

Without a budget agreement in place, agencies spent cautiously through the first two quarters of fiscal 2018 before the omnibus—signed six months late in March—obligated an additional $80 billion for defense and $63 billion for civilian agencies.

Federal agencies, now flush with cash, must obligate that money before the fiscal year ends on Sept. 30 or lose it to the Treasury Department. Analysts believe the federal market will see a monumental effort among procurement officials to spend as much on contracts as possible.

“If agencies are going to spend the extra money in fiscal 2018, it’s going to have to be at a much higher percentage in the fourth quarter than it has been historically,” David Berteau, president of the Professional Services Council, told Nextgov.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/08/get-ready-massive-government-spending-spree/150360/

While agencies scramble to spend, SEWP may help

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The end-of-year spending spree is set to begin in about a month, as the federal government heads into the last quarter of fiscal 2018. And agencies still have tens of billions of dollars to spend on information technology products and services.

As it has in past years, much of that spending will go through the National Aeronautics and Space Administration’s Solutions for Enterprise-Wide Procurement (SEWP) V. Historical contract spending data shows that the vehicle has been heavily used at the end of the fiscal year and customers are likely to turn to it again as fiscal 2018 wraps up.

Bloomberg Government’s analysis shows about $30 billion to $35 billion in remaining IT contract obligations likely to be awarded by the end of September. IT contract obligations are on pace with those of fiscal 2017, but agencies have more money to spend this year.

Keep reading this article at: https://about.bgov.com/blog/agencies-scramble-spend-sewp-may-help/

With 2018 budget, Christmas comes early for federal contractors

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The federal government is flush with money, thanks to a $1.3 trillion fiscal 2018 funding package. Contractors that take proactive steps now can benefit from this bonanza.

After five continuous resolutions and a government shutdown, it’s Christmas in April and the gifts are flowing. The biggest winners in the omnibus spending bill include the departments of Commerce, Defense, Energy, Health and Human Services, Homeland Security and Transportation, all of which saw increases of more than 10 percent over last year.

Even the EPA, the beleaguered agency that the White House wants to slash – remained flat. The State Department was the only major agency that had a cut, only 5.9 percent, less than the 8 percent requested in the President’s budget.

With a total increase in the fiscal 2018 budget of $143 Billion, $80 billion for defense and $63 billion for civilian, the challenge now for most agencies will be spending the massive influx of funds by the end of the current fiscal year, Sept. 30.

Keep reading this article at: https://washingtontechnology.com/articles/2018/04/18/insights-abel-fiscal-2018-buying.aspx

A fundamental shift is underway in today’s market — Are you prepared?

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As we move into the second half of the fiscal year, what can we take away from the last six months?

As most analysts have pointed out, we can say with some confidence that despite the budget chaos and uncertainty, the market continues to be strong. Both professional and IT services showed meaningful growth in the first quarter of fiscal 2018 and it is reasonable to expect that trend continued in the second quarter.

In addition, we now have a spending agreement that relieves the unnatural and problematic budget caps, at least for a few years. And that likely means even more growth.

And, of course, the long discussed consolidation of our industry appears to be upon us; a spate of deals has escalated talk about a restructuring of the industry.

But beyond those evident trends, there are other dynamics well worth considering.

Keep reading this article at: https://washingtontechnology.com/articles/2018/03/28/insights-soloway-market-changes.aspx

Deal-making accelerates as federal contractors jockey for spending

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For the first time in a while, investors are betting big on “big government.”

The federal services market has experienced a jolt of dealmaking activity in recent months as companies position themselves to capture new government spending, breathing life into a sector that has been sluggish for years.

In late January, fast-growing technology contractor ECS Federal was bought for $775 million by On Assignment, a California-based recruiting firm with little experience in the federal market. In the same week, Lockheed Martin spinoff PAE bought the firm Macfadden & Associates in a move that was largely viewed as an effort to consolidate amid shifting budgets.

Meanwhile, Falls Church, Va.-based defense giant General Dynamics upped the ante last week when it announced a $6.8 billion agreement to buy CSRA, one of the largest government IT services firms. Also last week, two private equity firms added to their stable of federal contractors: Veritas Capital is acquiring the government business of PricewaterhouseCoopers; and Arlington Capital Partners is buying a small engineering services firm called Integrity Applications.

Keep reading this article at: https://www.washingtonpost.com/business/capitalbusiness/dealmaking-accelerates-as-federal-contractors-jockey-for-spending/2018/02/18/1c707acc-1343-11e8-9065-e55346f6de81_story.html

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