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What happens in Washington D.C. is sometimes ignored, misunderstood or derided. However, if you’re in federal business, you need to consistently understand what’s happening in the federal capital. Always keep in mind that Washington can do things for you and to you. Here are three things happening in DC right now that contractors need to know:

1. The government may run out of money: No, this isn’t an old column you’re reading. Much of the government shuts down at midnight on December 11th if Congress fails to pass a spending bill or another Continuing Resolution. While December 11th may seem like a ways off, remember that Congress leaves town for over a week at Thanksgiving. It will be December when they return. Although discussions are being held, any number of outside issues –immigration is the current front-runner in the wake of the Paris attacks– could become major hurdles. The closer we get to the December 11th date, the more distracted your federal customer becomes. Federal agencies are already cancelling training and travel for the week of December 7th because they don’t want to risk federal workers being stranded. Don’t expect a resolution to arise more than 3-4 days in advance.

2. Don’t expect terror attacks in Paris to increase defense spending – yet: While Congressional Republicans may want to add new money now to defense and security spending in the wake of the Paris terror attack, the Administration has been insistent on protecting non-defense spending. Unless something gives, Congress will either have to approve new money that will add to the debt, or find some way to offset any increase with cuts or new revenue. This Congress is unlikely to impose any significant revenue deal, so cuts would have to be hashed out against the December 11th deadline. A more likely scenario is that Congress, with the Administration’s approval, will pass a supplemental spending measure in calendar 2016. Contractors should keep an eye on that as it could lead to increased cyber and defense-related opportunities.

3. Your federal customer is unhappy and is about to go on leave: Depending on which of 2 recent reports you believe, federal workers are either overpaid or underpaid – by precisely 35% in each case. What’s undeniable, though, is that they’ve had their personal information stolen, had their benefits largely frozen and are worried about their retirement accounts. Remember that selling to the feds, just like selling to anyone else, is a person-to-person transaction. Right now, many of the feds you want to sell to are unhappy. What are they going to do about it? Well, a lot of them will take off much of December. The “use it or lose it” leave policy results in many federal workers taking off the last month of the year because they haven’t used much, if any, of their accrued leave so far. This is especially true this year when the specter of a shutdown and subsequent furlough kept many on the job so that if the worst happened they could claim leave status and still get paid. So, whether the government shuts down because Congress fails to pass a spending bill or federal workers take leave, December may be a slow month.

There are opportunities here in all three of these scenarios, but you can’t take advantage of them if you don’t know what’s happening. Now that you do, make the most of it.



Larry Allen

About Larry Allen

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Larry Allen has over 20 years’ experience in government acquisition. He has provided critical information and advice to most of the top 10 federal contractors doing business with the government today. His relationships in, and knowledge of, the federal contracting arena are second to none. He is routinely sought-out by contractors, investment firms and other consultants to provide expert insight into various aspects of the federal market. This includes spending trends, market leaders, acquisition policy, and the opportunities to shape federal acquisition via coordinated government affairs campaigns. He served as a member of the Multiple Award Schedule Advisory Panel and the “Federal Contracts Report” Board of Advisors. He has testified often before committees of the US Senate, House of Representatives, and several state legislatures. He hosts his own radio show on government procurement, “Off the Shelf” on Federal News Radio in Washington, DC.

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