Goodbye Tom Davis, the IT Community Will Miss You

Friday morning I attended an Association for Corporate Growth (ACG) National Capitol breakfast. Congressman Tom Davis was the speaker, a Republican representing northern Virginia. Davis announced last year he would not be standing for re-election. He’s widely credited with being the most informed member of Congress on government IT and procurement issues. Here’s an interview he gave to Federal Computer Week after he made his decision:

http://www.fcw.com/print/22_10/features/152280-1.html

Davis’s decision to retire could be seen as a byproduct of a changing northern Virginia. His second wife Jeannemarie Devolites Davis lost her state senate seat last year, despite great efforts by Davis to assist in her race. These included having NYC Mayor Michael Bloomberg speak at a campaign event on her behalf, which had to be a Virginia state campaign first. Davis had been rumored to be interested in running for John Warner’s senate seat, but Jim Gilmore secured the Republican party nomination. Here’s a Washington Post article that speculated about the couple’s plans last November: http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110902515.html

Davis sounded wistful and disillusioned with the political status quo as he addressed a packed house at the Ritz Carlton in Tysons Corner. He made no bones about the fact he would like to make some real money, after 14 years of public service. He mentioned he hadn’t had a free weekend with his wife in three and a half years, and would like to disprove the saying that the “only cure for Potomac fever is embalming fluid.” That got a big laugh.

He was frank about the general lack of understanding in Congress about government procurement issues. In fact he said that Congress tends to “regulate by anecdote.” Some exceptions he mentioned were Republican Darrell Issa of California and Democrat Jim Moran of Virginia, who understand the issues and try to see both sides. An example of misunderstanding he gave was the brouhaha over the number of contractors in Iraq. Davis asked how many federal employees would be willing to go — probably none.

He said the lack of bipartisanship was very frustrating, and now was the time to get out with the House Republicans looking to be the minority party for some time. Mixed in with some amusing anecdotes, he gave an interesting analysis of where Capitol Hill politics stand right now.

• Nothing but the Omnibus Appropriations Bill will pass and be enacted during the current session
• The crisis of how to handle the upcoming retirement of the Baby Boomers is not being addressed, and it has the potential to wreck our country’s competitiveness
• If McCain is elected, he will be able to veto but not enact legislation, due to Democratic House and Senate majorities
• It’s distressing how the public doesn’t reward politicians who tell them unpleasant truths. As an example, Davis pointed out the Republican primary in Michigan, where Romney beat McCain when McCain tried to say that manufacturing jobs are not coming back and re-training is needed
• To a greater extent than any recent contest, the contest between McCain and Obama is a generational one — seniors will support McCain, and Obama’s success may depend on how many young people vote
• As ranking member of the House Committee on Oversight and Government Reform Davis played a big role in the steroids hearings. He said it’s painful to watch lives be changes and reputations ruined as in the cases of Clemens and McGwire. But he also said he’s in regular contact with the father of Taylor Hooton, a teenager who committed suicide after using steroids, and Davis is proud of the attention the Committee has brought to the issue

It’s too bad politicians can only address issues like this on their way out. Davis is my representative, and I’m sorry he’s leaving public service. The general consensus of the room was that he will have his pick of corporate boards to serve on, and will remain a force in the local tech community.

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Trends in Government Contracting — Some Turbulence Ahead

Friday morning I attended an interesting event put on by the Association for Corporate Growth, National Chapter. ACG National is a who’s who of the DC business community and puts on quality events. I’ve been a member for two years and volunteer on their marketing committee: http://www.acgcapital.org/

On Friday Stan Soloway was addressing trends in government contracting. Stan is President of the Professional Services Council and expert in the areas of government outsourcing, acquisition and procurement. To paraphrase Dickens, right now it’s the best of times, and the worst of times to be providing professional services to the federal government.

It’s the best of times because the market continues to grow. The government services industry is now a $270 billion market, and it will continue to grow because the government simply doesn’t have the program and project managers inhouse to handle ever more complex procurements and implementations. It’s the worst of times because there is a lack of consistency to the market, and in Stan’s view government contracting is becoming a proxy for congressional frustration over the Iraq war.

The lack of consistency has a lot to do with the use of continuing resolutions since Congress and the President can’t agree on budgets. 2009 may be the third straight year, which makes forecasting when contracts happen very difficult. Soloway described three main issues moving forward.

• In January 2009 the new President might have different priorities, but most military dollars are fixed, not discretionary. Iraq is ongoing, BRAC (Base Realignment and Closure) costs have been woefully underestimated, and military healthcare costs are escalating faster than the private sector. In this environment more money will be spent outsourcing, even though the government is growing their internal program managers 15% per year. This just can’t keep up with demand, or backfill federal retirements.
• Policy — there will be a lot more shouting, but the argument against contracting is over. The government can’t do without it. But there is plenty of debate about how to construct the business relationship. Unfortunately, it’s complicated and Congress doesn’t have many members who really understand all the nuances. One recent loss is VA Congressman Tom Davis, who really did understand. According to Soloway every spending bill now has specific procurement language that must be deciphered, and there is a lot of fuzzy language. He predicts there will be a lot of contractor bashing during “show trials” on the Hill to occur in the May timeframe. A lot of the frustration directed at contractors is really caused by the lack of a quick fix for Iraq.
• Competitiveness — perception vs. reality. Soloway cited a lot of coverage that portrayed a big increase in sole sourced contracts. But look beneath the surface, and you see that only “full and open” competes are considered in those percentages. Well, the majority of awards today are either SBA set-asides or task order level contracts, neither of which are open. In fact, task orders are up over 300%. He does think there is a competitiveness problem, however. Because the SBA size limits are too low, contractors have to be either very large, to have a chance at prime contracts, or very small, to get set-asides. This leads to a “balkanization” of the contracting community — there is no support for the mid-size contractor, no seeding of the market with growing companies like in the private sector. The SBA is looking to revise the size definitions, but are very late in doing so.

I’ve seen some of these issues first-hand working for b2g clients at Strategic. We’ll see if the next Administration and Congress can change the dynamic at all.

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