By Alex Zank
Douglas Manya, vice president at Booz Allen Hamilton Inc., today predicted a less rosy landscape for government contractors.
"The last 10 years were rather flush for contractors, [but] those times aren’t going to come back very soon," he said in a panel discussion during The National Law Journal Regulatory Summit. Contractors, he said, "are going to have to be more thoughtful of what they sell. Manya added: "There will be a winnowing.”
Manya’s statements were very much in line with the rest of the panel discussing the future of U.S. government contracting. The panelists agreed that political uncertainty, along with fiscal restraint and regulatory pains, require contractors to innovate.
Contractors face a “trifecta of fiscal woes,” said Elizabeth Ferrell, partner at McKenna Long & Aldridge. Contractors are dealing with the sequestration, the recent debt ceiling debate and potential fiscal issues looming for 2014—potentially including another budget showdown.
“The full brunt of the sequestration won’t be felt until next year," she said. "Contractors have been preparing for it.”
Another headache is what Ferrell called an “attitudinal shift” for government officials and regulators. Often, she said, the people calling for increased oversight are new to government and unfamiliar with contracting regulations.
“Everything is black and white with them,” she said. “The government is looking into claims against contractors … as sort of a money-maker for them.”
The panelists voiced concern that new regulations keep piling up, while too few old or outdated rules are revisited.
The best thing contractors can do, Manya said, is to focus on what they themselves can control. “You can’t control the shutdown or sequestration; what you can control is quality of work and focus on the mission,” he said.
To stay successful in a climate of uncertainty, the panelists stressed that contractors should differentiate themselves, stay on the cutting edge of innovation and identify what the customers’ needs are.
Manik Roth, senior vice president at LMI, offered a silver lining when commenting on government spending patterns. “I hope reuniting [in government] will happen again,” he said. “History shows we’ve come back from being more divided than we are today.”
Contact Alex Zank at [email protected]
Photo by Diego M. Radzinschi/ The National Law Journal