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Impact of the Stimulus Bill on Federal Contractors

Impact of the Stimulus Bill on Federal Contractors. Brian M. Haney Senior Vice President INPUT. November 3, 2014. Administration Transition & Budget Cycle. Election/Inauguration. Leadership Transition. CR. Agency/ Pres Prep. Congressional Review/Approval. CR?.

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Impact of the Stimulus Bill on Federal Contractors

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  1. Impact of the Stimulus Bill on Federal Contractors Brian M. Haney Senior Vice President INPUT November 3, 2014

  2. Administration Transition & Budget Cycle Election/Inauguration LeadershipTransition CR Agency/ Pres Prep Congressional Review/Approval CR? Agency/ President Prep Congressional Review/Approval Agency/ President Prep Congressional Review/Approval Source: INPUT

  3. Leadership Turnover & Human Capital Agencies Most Impacted by Leadership Losses 4.2% 1.1% 3.8% 1.8% 5.2% .8% 2.9% Source: OMB, EEOC, INPUT

  4. Federal IT Budget, 1989 – 2013 Peak:1998-200311.9% Low:2006-20112.9% INPUT Fcst:2008-20133.9% Note: Figures include Defense and Civilian Exec Agencies Only for comparison purposes Source: OMB, INPUT

  5. Federal IT Industry Forecast, 2008-2013 Source: INPUT

  6. Stimulus -- What Is It? Source: American Recovery and Reinvestment Act Summary (created using Wordle.net)

  7. Economic Crisis Recovery in Perspective 819-900 * Reflects 2009 Budget Request Source: OMB, INPUT

  8. Deficit Spending at 50 Year High 2009 Deficit Forecast = $1.6 Trillion (11% of GDP) Most Since World War II Source: OMB, INPUT

  9. Components of Economic Stimulus Plan Tax Cuts Direct Spending Discretionary Spending $280.8 billion $308.0 billion $198.0 billion = $786.8 billion Source: H1 Conference Report and Congressional Budget Office • Tax cuts to individuals • Direct spending to individuals • Discretionary spending primarily to governments

  10. Summary of American Recovery and Reinvestment Act of 2009 • Full appropriations total $786.8 billion • $506 billion in discretionary and direct payments • $281 billion in tax relief for individuals and businesses • Provides funding for technology, science and research, infrastructure improvements, education, energy, healthcare, and training • Funding distributed through new and existing programs • Many programs to be implemented by states with grant funds • High level of transparency • Quick turnaround • Spending plans within 30-120 days of enactment • Goal of using 50% of funds for activities that start within 120 days

  11. Distribution of Funds ($B) Source: Recovery.gov

  12. Spending Will Occur in Several Areas Breakout of $308B in discretionary spending Another $55+ Billion in technology spending is “buried” in other line items

  13. Timeline of Spending Estimated Costs of ARRA by Year, FY2009-FY2019 Source: CBO, INPUT

  14. Technology Opportunities

  15. The IT Markets Nearly $67 billion in new technology spending (even before coverage expansion which is majority of ARRA spending)

  16. Funding Breakdown by Department Rural Util. EERE FAA Census TSA BLM Army IHS AFA ETA VHA HRSA FWS FSA OE FSA NIST OJC CBP AF NIH NPS Admin NOAA Navy ICE USGS ONC MC CG BIA HQ *Dollars in billions

  17. Homeland Security Department of Homeland Security TSA $1.0B Coast Guard $240M CBP $680M Under Secretary for Mgmt $200M ICE $20M Tactical communications equipment and radios DHS HQ Consolidation - construction, site security, IT infrastructure, fixtures, and related costs  Checked baggage explosives detection systems and checkpoint explosives detection equipment Non-intrusive detection systems ($100M) Tactical communications equipment/radios ($60M)Border Security fencing, infrastructure and technology ($100M) Construction of land border ports of entry ($420M)

  18. Social Security Administration Social Security Administration $500M $500M $40M Processing disability and retirement workloads Includes IT acquisitions and research support Health IT for the adoption of electronic medical records in disability claims Replacement of the National Computer Center and the associated IT costs

  19. Facilities Modernization at DoD Department of Defense Army $4.2B Defense-wide $1.9B Air Force $1.4B Navy $1.1B Marine Corp $154M ($1.1B) ($3.9B) ($712M) ($154M) ($400M – medical facilities) Facilities modernization and energy efficiency investments ($1.1B) ($3.9B) ($75M) ($712M) ($154M) Research, Development, Testing and Evaluation (RDT&E) ($230M) ($230M) ($280M) ($400M) Included w/Navy Child development centers and warrior transition complexes Hospital construction N/A ($39.6M) ($96.6M) N/A Family Housing (including O&M)

  20. Energy & State Departments Department of Energy Department of State Energy Efficiency and Renewable Energy $4.2B Electricity Delivery and Energy Reliability $1.4B Diplomatic and Consular Affairs $380M Consolidated security training facility Expand passport agencies IT security upgrades Establish back-up information management facilities Increase the efficiency of information and communications technology and improve standards Modernize the electric grid Enhance security and reliability Energy storage

  21. Health & Human Services Department of Health and Human Services ONC $2B Health Resources and Services Administration $1.5B NIH $1.5B Indian Health Services $500M Modernization of non-Federal research facilities and NIH facilities on Bethesda, MD campus Health IT Construction, renovation and equipment for health centers Health IT systems for health centers Health IT – tele-health services development and related infrastructure requirements($85M) Facilities construction, maintenance, improvements, equipment($415M)

  22. GSA & Veterans Affairs General Services Administration Department of Veterans Affairs Federal Property $4.8B Veterans Benefits Administration Veterans Health Administration $1.0B $50M Energy efficiency projects for federal buildings Construction of border stations and land ports of entry Maintenance and energy efficiency projects at medical facilities IT systems

  23. Agriculture & NTIA Department of Agriculture National Telecommunications Information Agency Farm Service Agency Broadband Technology Opportunities Program $4.4B $50M Modernization of IT systems Broadband deployment in underserved areas Broadband inventory map ($300M)

  24. Contracting & Other Provisions

  25. Increasing Reliance on Task Order Vehicles Source: FPDS, INPUT

  26. Squeeze on Small & Mid-Sized Firms Continues Source: FPDS, INPUT

  27. Contracting Stipulations • Requires use of the FAR • To “maximum extent possible”, federal agencies must use • Competitive procedures • Fixed-price contracts • If other approach is used, it must be posted with explanation to Recovery.gov • Agencies can use existing contracts to execute plans • Priority given to programs that: • Can be obligated/executed quickly • Will result in high, immediate employment; • Have little schedule risk • Will be executed by contract or direct hire of temporary labor • Will complete a project phase or project

  28. Oversight & Transparency • Establishes Recovery Accountability & Transparency Board • Establishes Recovery.gov as transparency site • Recipients (including contractors) must provide quarterly reports • Total amounts received and amounts obligated/expended • List of all projects/activities on which funds have been obligated/expended • Project name, description, completion status, • Estimate of number of jobs created, and • Detailed info on subcontracts • Extensive funds provided to IGs to support oversight • GAO has authority to examine the records or interview employees of contractor/subcontractors who receive funds

  29. Conclusions

  30. INPUT’s Take • More opportunities will be embedded within larger mandates • Requirement to act quickly could take resources away from existing work • Look for utilization of existing task order vehicles to expedite awards

  31. Recommendations • Be prepared to act quickly – many of the program require plans and/or project start within 30-120 days • Revisit your portfolio to identify complete solutions that simplify acquisitions • Energy audits and energy monitoring technologies • Electronic health records and IT security • Infrastructure providers - Look for construction projects which create new “centers” or establish new offices • Consider partnerships with state and local contractors • Many opportunities funded through S&L grants

  32. Recommendations • Vendors should focus on funding sources which already exist • Much of the funding (other than construction) targets existing programs and augments previous legislation • Keep your nose clean – extensive oversight and reporting requirements • Don’t let exuberance and desire for growth overcome common sense

  33. INPUTThe Authority on Government Businesswww.input.com

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