Budget cuts are coming in 2013, no matter how Congress deals with the current budget situation. The problem is figuring out how they will affect your agency.
Rob Burton, a partner at Venable law firm and former deputy administrator of the Office of Federal Procurement policy, says the budget problem means different things for agencies and industry.
Rob Burton’s Top 3 for 2013
Budget cuts will lead to more bid protests and insourcing. As a result of reduced budgets and fewer contract opportunities, the number of bid protests filed with the Government Accountability Office will increase, continuing the trend of the past five years. Reduced budgets will also force agencies to insource more work although agencies will not be able to hire additional employees to perform the work. Reduced agency budgets will impact small and mid-size businesses the most.
Price will become a more important evaluation factor in the award of contracts. This trend will result in fewer incumbents winning contracts in re-competes and more solicitations issued as “low price, technically acceptable.” We will also see more “best value” solicitations place greater weight on price in the evaluation criteria and some “best value” procurements improperly treated as if they were “low price, technically acceptable.”
Terminations for convenience will rise and contract values will be decreased. We are already seeing agencies terminate contracts for convenience because of the budget crisis. This trend will be accompanied by more agencies refusing to exercise contract options and reducing the scope of contracts. This trend highlights the growing need for contractors to advocate for the retention of the agency projects and programs they support.