How takeovers impede national security

larry allen Tom, my concern is that today's acquisition system is focused on things like socio-economic benefits and trying to do everything through the acquisition system, whether it's Uber compliance or cybersecurity. All of these are important, but each has its own place. , Tom. And its location does not prevent efficient delivery of critical systems. And today, as we look around the world with regional conflicts in the Middle East and problems erupting in Asia, Russia is embroiled in Ukraine. I think it's time the US needs to wake up and say all these products that are being recognized through the acquisition system are actually secondary or should be focused on. . Our focus should be on becoming more efficient in dealing with the potential threats that state and non-state actors pose to us, and ensuring that our national security institutions have the tools they need to protect us. It is possible to have a comprehensive procurement system.

tom temin There are many requirements for these contractors, including their commitment to cybersecurity, labor practices and diversity employment, and their commitment to carbon emissions. If you have an omelet day for your employees and they use gas-powered hotplates, you're in trouble. I'm kidding, in a way. But does this mean the kind of thing that just stifles competitive bidding for the reality that governments need?

larry allen Yes, that's true. I think there's some influence of today's acquisition system and some kind of sideshow, but we have to do it. One is to reduce competition. Although the government wants to increase it, especially among small and medium-sized enterprises. Small businesses don't have the bandwidth to jump through so many hurdles. Even if you are a large company, you can still provide what the government demands. But because we have to look at all these side issues, the government takeover system itself is moving more slowly than it should. As I said, I'm not saying they aren't important. They have their own place. Unfortunately, I think that place is currently on the front lines, which it shouldn't be. Efficient acquisition is necessary on the front lines. Look at the commentators across America, Tom. Many of them say we haven't faced this many threats since the 1930s, and we need to make sure we don't become flatfooted. And having a better acquisition system is central to that.

tom temin If you'd like, could you comment on what seems to be two canaries in the procurement mine? One is that even though there has been slightly more money flowing to small businesses year over year, small business vendors The number of is decreasing. The roster is shrinking, even as the government tries to encourage more people to participate. What was the initial roster?

larry allen First of all, I think the government has a tendency to view small and medium-sized enterprises as a monolith, but small and medium-sized enterprises are not monolithic. There are various types of small and medium-sized enterprises. So if you look at the government sales data that goes to small businesses, you'll see a lot of successful small businesses that are getting the lion's share of that business, and a lot of emerging small businesses and other small businesses that aren't. Look, the number of small and medium-sized enterprises is gradually increasing. Yeah, that's great. But that money actually goes to the cast of The Usual Suspects, and then to other people who happen to be close enough to the cast of The Usual Suspects. They are supporting characters, so to speak. And that's what we got. There are professional small businesses dedicated to the government market and professional large businesses. They have the resources and have no choice but to invest in a never-ending stream of special and unique requirements for doing business. In this market.

tom temin I'm talking to Larry Allen. He is president of Allen Federal Business Partners. And the other canary I wanted to ask you about is the increasing use of other trading authorities, OTAs that are done outside of federal procurement regulations. [Defense Federal Acquisition Regulation Supplement (DFARS)] so far. Congress is OK with that. Everyone's okay. I wonder if there are scandals brewing in the world that we haven't seen yet, as we've been watching this market for a long time. But is that another indicator that some things are not as they should be on the regulated side, or the more regulated side?

larry allen Tom, I think that's spot on. If you look at what OTAs are using, this is a non-FAR-based acquisition method, and look at other things being used for niche acquisitions, such as small business innovation research acquisitions. And if you look at the National Defense Authorization Act, you'll see that Congress specifically directed the Department of Defense this fiscal year to look further into developing commercial solutions, acquisition methods like OTA. If you're looking for all these ways to get around the standard acquisition, you have to ask yourself, isn't the Maine Acquisition Highway just a complete bottleneck all the time? If so, what can you do to alleviate these bottlenecks so that you don't have to have all these workarounds to get where you need to go, to make the traffic you get on traditional roads move more smoothly? What should I do?

tom temin Speaking of government-industry relations, you also heard this week that CISA, the Cybersecurity and Infrastructure Security Agency, and the FBI will apparently be able to penetrate contractor systems and monitor what's inside them under upcoming rules. You're writing. There.

larry allen Tom, this is a proposed role. The comment period on this proposed rule has just ended. And even though the FAR Council has extended the comment period, it doesn't seem like many contractors are playing any role. As you said, this is a rule that allows CISA and the FBI to investigate a contractor's IT systems whenever a cyber breach occurs; almost unfettered access to IT systems. The concern is that once you give a government agency or someone unfettered access to your information systems, there's no real way to control who they get access to. They're going to go poking here, they're going to go looking there. Also, while you may have initially been looking for the culprit that led to the cyber breach, you may inadvertently cover something up. And there have been incidents where people's personal information has been compromised by the Office of Human Resources in both systems managed by the Office of Personnel Management. These systems contain important non-government contractor information for commercial customers. I think this is a proposed rule that contractors should really pay attention to. Although the comment period may technically be closed, please feel free to voice your concerns by submitting a comment. If you actually think it's a problem, make sure people understand that it can be a huge burden on you.

tom temin The rules come true. Despite extending the comment period, they don't propose a rule, and then all of a sudden at the end of the rulemaking comment period they say, “Hey, you're right, we don't need this” and throw it away. There will be something. So it might be a good idea to take a look at the comments that are still left.

larry allen Well, I think that's especially true in the field where you're talking about cybersecurity, Tom, where people are like, “We're going to need all we can get.” Well, cybersecurity is really important. that's right. But it's not just government contracts that are important. If you are a company that sells to both commercial and government, you have every right, and your commercial customers too, to ensure that the information you use and the operations of your non-governmental business remains secure. have every right. And then a government agency comes in with a camel nose under a tent to sniff somewhere else, and then, intentionally or quasi-intentionally, smells it on the road beyond the original intent of the regulations. It is fairly safe to smell.