Miscellaneous

On March 1, the much feared fiscal cliff sequestration took place. A doomsday machine thought to be so terrible it could never become law is now in gear. What can we expect to happen? Will hundreds of thousands of federal employees be facing forced furloughs after the 30-day waiting period prescribed by law? Will thousands of federal contractor companies have to continue making layoffs, see reduced business opportunities, or maybe even go out of business?

The drama of the fiscal cliff continues to roil the market for proposal services like nothing else in living memory. Whereas spending for the first fiscal quarter (October through December), was up compared to 2011, spending in January of 2013 is down by 2/3 compared to 2011. This is mostly because of indecision in the political process – the agencies don't know what to do, because the direction for procurement in 2013 has not been set by the President and Congress.

Federal agencies in January 2013 will officially require contractors that win services contracts to first hire employees from the company that had previously performed the work, implementing a 2009 executive order.

This has long been in the works. The Labor Department published a final rule Aug. 29, 2011 to implement the 2009 executive order that supposedly "reduces disruption to the delivery of services during the period of transition between contractors."

The proposal profession was essentially left in limbo as a result of the 13th hour "deal" Congress made on the fiscal cliff issue. The 2-month delay in the 10 percent reduction in spending that funds procurement means that the winter will be much like the fall – slow proposal activity. Without a more definitive resolution of the problem, the government procurement personnel will do exactly as expected, which is very little. If they don't do anything, they can't get blamed for doing the wrong thing.

Now that the election is over, congress is starting down the rocky road in search of a plan that will mitigate the devastating effects of Sequestration. With both the Senate and House majority leaders pledging to find a solution, the atmosphere seemed to be warming to a political deal that would avert the "fiscal cliff" on the day after the election. Since then, the news in the press seems to be good and bad on alternate days.

Unfortunately, the time is coming when some companies will have to lay off proposal personnel due to the sequestration. This is a difficult situation where economics just doesn't provide another option. So companies do what they have to do to get through problem.

In this short article, we try to provide some guidance that may be helpful to proposal departments faced with the need to downsize their operations. The solution generally has these components:

Over the next couple of months we will focus on the effects sequestration will have on our customers, consultants and competitors.

Proposal consultants and employees everywhere are apprehensive about sequestration. We are entering uncharted territory. Last week on CNBC we heard Erskine Bowles, co-chairman of President Barack Obama's National Commission on Fiscal Responsibility and Reform comment on the market and the upcoming challenges we will be facing.

After a recent telephone conversation with a long-time colleague I remembered a description of a DCAA operations audit (for economy and efficiency) presented by the CFO of a major Aerospace contractor almost 25 years ago. His presentation is shown below:

OCI recently helped Chreso Ministries in Lusaka, Zambia win a $2M grant from the U.S. Centers for Disease Control (CDC). Chreso is a non government organization (NGO) that provides public health care in some of Zambia's poorest communities. Chreso's able doctors are easily recognized by their Boy Scout like uniforms.

OCI provided a Red Team review of the Chreso proposal as well as completing Gold Team fixes. The proposal enabled Chreso to become fully funded as an indigenous partner directly by the CDC in Zambia.

OCI shareholders held their annual board meeting on Thursday, January 19, in Reston, Virginia. OCI is an employee-owned company. Following below are highlights from the meeting.

During 2011, OCI had a strong and profitable financial year. OCI greatly strengthened its customer service capability. The company’s ability to serve customers in the southeastern United States was enhanced with the opening of a regional office in Orlando, Florida. Under the leadership of Sales VP Mike Summers, OCI has been able to focus their expansion in the states of Florida, Georgia, Alabama and the Carolinas.