CHPS Podcast Episode 5: The Future of Federal Procurement

Join host Chris White in the latest episode of CHPS of Insight as he speaks with Ron Sullivan, a Senior Counsel in Clark Hill's Government Contracts practice and a Senior Director of Clark Hill Public Strategies. Ron shares insights from his extensive background in federal government service and discusses the transition from working with the Army Futures Command to assisting clients on the other side of federal procurement. The discussion explores trends in rapid acquisition, the growing involvement of small and non-traditional businesses in government contracts, and expected changes under FAR 2.0. Chris and Ron examine how these developments are shaping federal procurement and what businesses, particularly non-traditional or small businesses, can do to stay competitive. 

This podcast is intended for general informational purposes only and does not constitute legal or financial advice or a solicitation to provide legal services. The information in this podcast is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Listeners should not act upon this information without seeking professional legal counsel. The views and opinions expressed in the podcast represent those of the individual speaker only and are not necessarily the views of Clark Hill PLC.

Transcript

   Hello everyone, and welcome to Chips of Insight, where we try to bring policy to practice by providing a current perspective on new policies that affect your business. With one of our professionals.  This podcast is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this podcast is not intended to create and receipt of it does not constitute a lawyer client relationship. Listeners should not act upon this information without seeking professional legal counsel.

The views and opinions expressed in the podcast represent those of the individual
speaker only and are not necessarily the views of Clark Hill PLC.    

Today, it's my pleasure to welcome Ron Sullivan. Ron, why don't you tell people a little bit about who you are and your background and what we're talking about today?

 Hey, good morning, Chris. It's great to be here with you. This is my second day at Clark Hill. My name's Ron Sullivan and I am a new senior counsel at Clark Hill in the government contracts and regulation business unit. I just left Army Futures Command. After 29 years of federal government service as a federal civilian over my career, I've worked on active duty with the Army where I've done a myriad of different areas of practice.

Left the Army active duty and joined the Army Reserve where I'm Brier general currently supporting the office or the chief of the Army Reserve the, career path I've been on after active duty was to the Department of Justice doing drug intelligence trial work. Then I went to the va office of General Counsel, where I did information technology, supply services, contracts, and various ip.

Emerging technology data, privacy issues. Did that for 12 years and in 2019 transitioned from the VA to be the chief of acquisition, personnel and ethics law for Army Futures Command as legal office. There I also had responsibility for fiscal law and other emerging technology issues as well as IPAI privacy.

So that's my background 24 years doing federal government contracts. And it's been a blast. And now it's a a, a leap for you going from being on the procuring side over to representing and assisting those people who are providing the products and services to the federal government.

So that'll be a, a fun little change for you, right? It will, it will. It's a really interesting changing hatch, right? You, you've sat at the table, you know the conversation. One of my mentors said ultimately, and this is a little show my age it, it's kind of like being like Ginger Rogers and Frederick there, you know, I've, I've had to, for all this time understand how to do the dances backwards and in high heels.

So I'm gonna see if I can, use those experiences now and bring 'em to the client side. But you know, one thing for sure, being on the government side is you understand on a daily basis what the contractor is going through. Whether it's a matter of what they filed, what they've requested how they're trying to negotiate and what, specifically the government may have done that may affect a contractor differently than what was intended. So I'm, I'm acutely aware of how government contractors engage with the government, and I'm very happy to bring that experience, whether it be in bid, protest contracts, claims and disputes, terminations the full gamut.

And I've done everything soup to nuts at this point and seen it evolve, even seen some new areas I. So I'm, I'm really looking forward to this. Fantastic. I know you've already been speaking with and involved with people at, you know, accelerators and incubators for small businesses trying to kick off.

And I, I think that aligns with a, a trend that I think is starting to emerge with federal procurement, which is via rapid acquisition and the goal for the government to be a little bit more agile through its ability to, to do things faster. What have you seen so far in that space of Chris?

I'll, I'll tell you in the last several months and many of the the White House broadcast from the Pentagon broadcast from other federal agency heads. It is absolutely amazing to hear that we're moving from large traditional government contractors who for years either would bid on a government contract to answer government speak, and then gather together the various other non-traditional and other large business contractors and then work with the small businesses to fill in those, those gaps or those various. Areas of expertise needed now to see that the VC-backed small business or the non-traditional VC-backed, non-traditional who's specifically answering a question that the government needs that's a major change.

So we're gonna really see things like instead of. A dashboard for a helicopter or a, a fixed wing aircraft overhaul. Instead of that being done by a traditional large business  we're standing at the place where we're gonna see a new technology group come through and say, Hey, we've solved that problem.

We don't usually operate in this space. We are VC backed and. We specifically know what's needed there because that's our business. That's what we've done for seven years. We used to work for x, y, Z corporation, but our expertise is in doing what you just asked for government. And I think that's really gonna be a major disruptor.

Also I think it's going to shorten the procurement time. So the rapid acquisition models are going to be met. The various pathways to get things here, whether it's software or actual hardware are going to be met. And some of the cost overruns are gonna be met. Having just left Army Futures Command, I can tell you one of the things that the Commanders of Futures command have directed as well as army leaders.

They've all directed doing things with the soldier involved. I'm a computer programmer by trade. So waterfall development ultimately means you develop something and you deliver it at the end, and then you test it. Here with Soldier Touchpoints, we have true agile development.

I think that's gonna be a really major change. It is been changing in the Army for sure for the last six years with many of the modernization, transformation, efforts. But here with rapid acquisition and soldier touchpoint, sailor, touchpoint airmen, touchpoint Coastie, and Marine touchpoints or, or even other executive agencies, to actually use the widget or the system throughout the development and get feedback the deliverable gets better instead of get to the end and have a response that this is not what we really procured, this is not what we were looking for. Well, that makes, that makes a lot of sense. And then, does this go as far as what people should expect if they're trying to be most competitive for these or these types of contracts? Well, I think they're very desperate groups that are. Looking specifically, so just going to the SBIR small Business Innovation Research grants or the OTAs, the other transaction authority vehicles.

They are well broadcast now in various different groups, whether it's D-I-U-D-I-U-X, army Applications Lab Rick to kessel run. There's so many different groups across each of the agencies that are putting their questions directly in front of you. So if you're in, austin and you get in contact with SR Advisors or one of the groups like that or if you're in the arm capital factory they're connected with the center for Defense innovation.

Those groups are bringing these questions directly to the contractor. So the non-traditional gets to walk right in. Also get some assistance and. Discuss what the problems are and whether you're coming from a group that is putting the question and the topic, and then you go back and nugget it out with your, contractor, teammates and come back and put your white paper in.

That's one way contractors can do it. Or the other way is you work with a group that is literally solving a problem and. The contractor group can actually give input to what the problem is or what they believe the problem is, or, or in some instances where we have industry days or request for information, RFIs, those are still very important.

Tools to help the government refine what its question is. And I think over years I've seen the government put out questions or put out what its intention is and industry says we would really love to have that. And be able to bid on that. But that piece of technology is not there. And what I can tell you from my background, and it's definitely my work over the last six years, there are places where we're actually procuring with that in mind.

A certain piece of technology doesn't exist yet, but that system is still being procured with a gap. And there are army leaders and DOD leaders. And other federal government leaders who recognize that a piece of technology hasn't been created yet, but we're still moving in that direction. So industry can say, oh, we're gonna build that thing.

We're gonna make that thing. So there's places where dual use commercial and government usage and that's where the SR and the OTA work really emerges to the front forefront. It makes a ton of sense. And so do you think then that to align with this, the usage or the availability for, unsolicited or submissions by contractors may increase, or do you think this is likely to go in a different direction where they're right now maybe they're, they're trying to speed things up, but the same time they're less unsolicited proposal submitted.

I believe contractors and nontraditionals should. Continue on their road of unsolicited proposals. Of course there's a a huge threat there. Submit your unsolicited proposal, you know, at, you know, at your own risk. There, there's some risks that go there, but I, I believe sometimes a white paper to a small business innovation research.

Topic. If you look at a broad agency announcement that has multiple topics on it, and you find your tool fits inside one of those topics or subjects, I think that's the perfect way to introduce your unsolicited proposal in one respect. But. I would say that would be down the traditional path.

And I, I think the downside is if you submit unsolicited proposals in a traditional procurement environment, you might have some risk, but in the open space of bring us your topics. Tell us things that we need to know. We thought we wanted to solve a problem in this fashion, and you contractor. You college students sitting in your dorm, you college students in the lab who saw something that might be useful for protecting the war fighter or bringing a medical breakthrough to market.

There are places for those topics and definitely in the small business innovation research grant area, with the three phases . And same with the OTA, you know, there's a research area and then there's a prototype area and a production area.

So I believe the current areas of requesting topics, requesting answers and the. Government showing its intention. For instance, the army uses a thing called a characteristic of needs statement. And that's literally, well to the left of RFIs. That's simply saying, this is where we're going.

And I believe if the contracting community in its entire breadth and depth of. Size ideas. Traditional, non-traditional background configurations, joint ventures all of its different viewpoints. They can bring their ideas now and think, oh, the army is going here, or government is going in this direction.

Let's start developing something. That will meet one of those needs. And this is a general idea in the direction in Asmuth. I believe more people will find synergies out there and we'll be able to win better. That's awesome. That makes a lot of sense. So I guess with that, what would you, what, what are you seeing, what are your thoughts on engaging with venture capital or private equity as a way to.

Provide funding from some of these small businesses or to get their technology moving. Pros, cons, concerns what have you seen? Well I think there's a lot of areas for growth in the VC space. I, I think there's also as with anyone, some risks for

not answering the question well. And that non-traditional or that small business believing that they're answering the question right. And not hitting the mark. But I, I believe with the VC input of C-Suite advisors as well as with the revolving door of government there are folks who have been in the government and who are leaving the government.

And as they join those entities, corporate boards or that advisory group, I believe they're able to close the gaps. So I, I think, private equity money, VC money, angel money, that helps get a small idea to where it needs to go. Small businesses don't have money.

College students sitting in a dorm room with a great idea don't have the money to bring their small prototype or their small research idea to market. And this is something that you didn't see in 1990. Right? So I, I, I imagine Michael Dell would've had a bigger company moving faster had he had.

VC angel money instead of working out of his garage in the nineties. So I, I believe there's a huge opportunity for a win for, for the business side, the small businessmen the small ior moving intellectual property from simply an idea to to real life and, and helping the government win.

And, and of course there is the area where. We have to be concerned where outside money outside US money or dark money is there. So even the, the, the business ventures have to be careful where they're getting their money because some of the government entities might not be able to use that particular technology.

So as we move forward, I believe the, handshake just has to be a little bit more solid, a little bit more firm, and everyone knows where they're going. That makes sense. No, that's, I mean, that's truly a tremendous way to get off the ground. The number of clients you talk to and the number of small business you talk to, where they, they have a great idea.

They're not sure how to get it to market because these ideas require a large investment. And as, as you know, getting to the GovCon space takes a fair amount of time and quite a bit of money to, to have it ready to go. And so identifying these other sources of funding and recognizing and having the advice on how to use those funding sources without disqualifying yourself or, you know, practicing yourself is it's important to walk that route carefully.

Well, and, and one additional part going from product side to services side, those differences are huge. You can, you can provide a service as a, as a subcontractor get your past performance and grow and then bid on something larger. But that's well different in the product side, right. Solving.

A problem with a product. That's, that's absolutely where the, the major problems are. Even the mentor Protege Pro process and the various eight A programs definitely help, but not the same with a product. And you're absolutely right. The vc fact companies that are moving a product because it's also that, it's that research, test and evaluation.

Validation, does this thing work and do what we said it and is intended to do? And, and just to loop back, that's exactly where the s and the OTA areas are, are, are good. And they're good because their expertise is, let's validate this research. Let's see if this research makes that prototype. We agree with that prototype.

Okay. Let's put it to production. And, or let's take this from phase one to two to three, or someone who likes that result in phase one or phase two goes direct to two or, or to phase three. Sure. No, that's it's, I think that's something that many people do learn is. Just all the steps required and you know that it's not as simple as unsolicited proposal.

Yeah, it looks great, we'll buy it right now. But versus, you know, proof of concept and, and showing that it does meet all the testing and other requirements of the government to wanna proceed with it. And it doesn't mean that getting to step one's not important, where maybe the government then starts providing some of that funding as well.

But it's, it's, you know, getting your foot through that door that matters most, right. Absolutely. Absolutely. And there's so many doors. That's, that's what's so good about things. Now. There are so many different doors whether someone thinks that their tool helps the Air Force and you get it into the right stream and you find out it really helps the Coast Guard better right now.

Or you, you get your tool into, one of the DOD agencies and you, you find out it, it assists at Veterans Affairs or interior or noa. And that's what's so great about the different pathways. There actually is crosstalk. So the different groups can see what's been developed, what's been prototyped, what's been researched.

 With these, with these changes, rapid acquisition, et cetera what are you seeing as far as this effects you know, large, large contractors that tend to be aggregators of contracts? And, and then how they go forward and like, what do you see of the road going for these large contractors versus maybe small contractors?

I think there's still a, an area where large contractors are going to be able to use their expertise. I just think that in the past we, we talk about bundling and we, we talk about other ways that the government has put subjects together that made them really ripe for that, that large traditional contractor.

I think now. There is an appetite, a true appetite to break the need down into smaller pieces, break the need down into what was actually needed. And engaging the government directly in the various industry days is a way that the contractor community can actually communicate to the government, Hey.

We have this piece. And then what that does is allows the government to procure just that piece or just this particular product or this, this particular type of service. And the positive of that is

it releases the government from the idea that we're going to procure this large elephant. Maybe it procures a head, an elephant body in various legs and it tail differently than it did in the past. And, and I think everyone who has been in the system here for a while understands that.

The large business contractor just lost a lot of influence where, who they work with and how they subcontract and how they joint venture has now been disrupted. Because if the government buys those things in separate pieces the different large aggregators are no longer directing.

Contractors in one way or the other. Now, I say that if, if your company provides hubs and networks switches in the past, what you'd find is of course each of the bidders will need a company to provide hub and network switches. Now maybe the government buys. Network solutions in one way, and it does not need to do that in that major aggregator contract.

And now the various large businesses don't jockey for various, you know, the gold standard hub and switch network company versus. Its competitors. It lets them do that competition separately for that network solutions. And now it doesn't, it doesn't change how whatever solution that the government was trying to procure will go.

I, I think it just moves some of the power or some of the decision making from those aggregator contractors back to the individual solution makers. It makes a lot of sense that you know, through Rapid acquisition and through working directly with some of these small businesses to more quickly get their product, approved and on, on various lists for, for purchase.

That, that certainly from, from my understanding what you're saying, carves into. The space of these large aggregators because they, they're doing contracts on repeat. They're known factor. They know the people they've been being purchased from in large quantities for a long period of time.

So it's very easy for them each time to, you know, resubmit their, their very similar proposals because the new contracts asking for the same thing. But if a, a new player is able to get their product approved and on a proof list for purchase, now a contracting officer can. From a, a competitor much more readily and much more easily as.

Target, target metrics pop up for small businesses and trying to get to some of these small businesses that gives a contracting officer more options, whether it's you know, moving away from a sole source or, you know, only one source available type contract or, you know, starting to be able to say, yeah.

We'll do a multi-award vehicle because now there are multiple people doing this and we can get some of the product over to small businesses and they, they now don't need to trust that the small business will be a subcontractor to the aggregator, but rather can go directly to that small business as a prime contractor, as a primary supplier for some of these goods.

Because that's what I understood from from what you were saying. And so I think that's that's a good move as we try to get more small businesses off the ground. Right? Absolutely. And, and when we go back to those justifications, right, saying there's only one responsible source is different from saying there's only one source, right?

So that's what's been happening, I believe in the past that you have those repeat offender. We provided the government's happy with it, defining responsible source and. Challenges to some of those justifications have, have been difficult in the past just because of the way the law is written.

But yeah, you're absolutely correct. Absolutely. Fantastic. I guess final thoughts on what they're trying to do theoretically to, to make this a little bit smoother or streamlined, or at least that's the what's in the news uh, far 2.0. I'm sure you started to get, you know, some, some words about it before your transition and your, and your, your move over.

But what do you, what are you thinking? What are you seeing? What are, what are you on high alert for? Far 2.0 is well overdue, right? Every practitioner has wanted a, a better, far more streamlined, some of those decisions that are found only in contrary of general decisions or court of federal claims decisions and have never yet been incorporated into the far so to the extent that that happens, that will be amazing and great.

At the same time, I, I believe that the rewrite of the far I, as I understand many of the different departments and agencies, are undergoing their rewrites separately or in-house. And then my hope is that they then roll those up and Office of Federal Procurement Policy takes those inputs and, and sees where the information is similar and see where it hits center of gravities that, that make the far better.

One thing that I'd say here is. As the internal government continues to look at the far and update it and make it better, I believe that the federal contracting, community, contractors, practitioners, academics, all have a duty and responsibility right now to not wait until notice and comment period. Hey, here's the new shiny far 2.0.

Proposed. Give us your notice, you know, give us your comments. I believe this is the time for contractors who work with various agencies on a regular basis or inside particular agencies. Those agencies that you work with. I believe those con, you know, contractors as well as lawyers academics should be sending very streamlined here's our company's suggestion for how that could be rewritten. There's two, two places there. One, we're trying to help government and then two, Hey, we've been the recipient. Some downside because of how that particular far part is written, how that particular clause is written.

We believe rewriting it in this way would help both the government and the contract community meet the intent of the law, or we believe it was written this way. We've had several protests in this area, and the result of that protest or the result of that dispute, we've had disputes in this area.

The result is X or Y. This is why we have proposed this. Rewrite. I, I think there's a way for a crowdsourcing of everything that we know right now that we can do it. I don't believe it needs to be done in a way that overwhelms the government, but senior procurement executives chief counsel of various entities, I believe they would welcome.

The contractor community side or the practitioner side of suggested or proposed for clause rewrites. So I, I think 2.0 is well overdue. This is a huge undertaking and instead of just having it a government side input only, I believe the space for us to all get involved and send, information in.

Now there are a few contractors out there who have run into the buzz saw several times and come out of that engagement, scratching their heads saying What? You know, that clause is just written terribly and this is the opportunity. I believe that, with the intention to help send in what they believe there.

Proposed rewrite would be. So I hope that meets the answer to the question far 2.0. I, I, I think it's gonna take a little while. It's not something that can be rushed and the government's a pretty large place. And we haven't even gotten to the place to answer the questions on, the various supplements, right?

Each agency, each entity has its own far supplement and how that's gonna go. So step one is getting the far right and then step two ensuring the supplements are updated as well. Absolutely. It sounds like from what you're saying now's not the time to wait for the traditional notice and comment period, but to start engaging now so that before new clauses and new supplements are even drafted there, there's a chance to hear from the people that'll be affecting, the ones who actually have to operate underneath it.

And so. A good time to reach out and, and help navigate that system and start providing the information to the administration, which presumably, you know, the best way to do that, right? Absolutely, absolutely not. Give us a call. We can help get that information to the right place. That's fantastic.

That's all I had for today. I always like to give a chance for any stage rounds of anything that popped into your head while we were chatting, so no pressure if there's not, because we covered a lot of good information and a lot of materials so far today. Well, Chris, I one, just wanna let you know, I really appreciate you.

You're welcome to Clark Hill has been very warm and, and appreciative. And to kick off like this and say hello to the entire contract and community on behalf of Clark Hill has been great. One Saved round would simply be large business or small business. The far applies to you the exact same way.

And in-house counsel many have expertise in areas and those of us out here in the out outside counsel worker here just to supplement and assist. And I think that we're able to, to do that with some of the things that we've seen. And some of the, the. Difficulties in some of the roads that we've gone over, and I hope that we're able to give our expertise to help the help clients get to where they're trying to go.

So thank you. Of course. No, it's been my pleasure, Ron. And obviously I was, I was pumped for you to start and so I was thrilled to get a chance to to get you on day two for, for this podcast. And I mean, you said it perfectly. I, I describe it as a, as a, a field. Filled with minds under the guise of trying to get more small businesses involved in government contracting.

And fortunately there are a lot of experienced navigators to help people to circumvent and to avoid any of those pitfalls, to, to get 'em to the right place. And having you on board as a tremendous asset. And so I think everyone should stay tuned to, to learn more from you as we do future client alerts and, and talk about future policy changes in the go world of government contracting.

Looking forward to it, Chris, of course. Thanks again.   This podcast is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this podcast is not intended to create and receipt of it does not constitute a lawyer client relationship. Listeners should not act upon this information without seeking professional legal counsel.

The views and opinions expressed in the podcast represent those of the individual.

speaker only and are not necessarily the views of Clark Hill PLC.