Important Changes for Contractors to Consider When Selling to the Government in 2022

The contracting industry experienced a year of unprecedented events, new reforms, and exciting innovations in CY21, leading companies to adapt how they provide services for the Federal government. Many of these industry changes will have an impact for this next fiscal year, and whether you are working to secure your first contract, or you are an established Federal contractor working with multiple agencies, AlphaBrook has compiled a list of important changes in regulation and opportunities for contractors to consider when looking to sell into the government in 2022. 

1. POSITION FOR MAJOR CONTRACT VEHICLE SOLICITATIONS 

There are many highly anticipated vehicle solicitations and awards scheduled to occur in FY22, including HHS NIH Chief Information Officer – Solutions and Partners 4 (CIO-SP4), GSA FAS Next Generation Services Multi-Agency IDIQ Contract (Services MAC), and GSA FAS Polaris. Our AlphaBrook team has continued to monitor the progression of these contracts. Contractors pursuing these or other high-value vehicles should ensure their team has a thorough understanding of the detailed solution preferences of the government customers, adhere to the specifications of the solicitation (font matters), and form teams with partners bringing complementary capabilities and relevant past performance. If this type of knowledge seems difficult to capture with your existing resources, you could benefit from utilizing our Voice-of-Government® solution. 

2. TARGET AGENCIES WITH INCREASING BUDGETS FOR STRATEGIC GROWTH OPPORTUNITIES 

Total spending by the Federal government has continually increased over the past few years, and despite the CV-19 impact on operations, it seems that FY2021 maintained this trend. According to USAspending, the Federal government has spent $3.46 trillion towards COVID-19 response efforts alone (as of December 28, 2021), underscoring the increased spending and funding from the government last year. Following suit, the FY2022 budget requests for many agencies are significantly higher than budgets approved for the past year, such as NASA (6.6%+), VA (10%+), DHS (2.7%+), DoD (1.6%+), and Treasury (10%+). Companies seeking to increase revenue from Federal work can strategically target these agencies with growing budgets and maximize opportunities to secure contracts. Also, pay special attention to upcoming emerging technology opportunities from the DoD, particularly to those Internet of Things (IoT) and Artificial Intelligence (AI), as cybersecurity will continue to be one of the highest federal priorities. 

3. ENSURE ADHERENCE TO DOD’S CYBERSECURITY MATURITY MODEL CERTIFICATION (CMMC 2.0) 

In September 2020, the DoD published an interim rule to the DFARS in the Federal Register (DFARS Case 2019-D041), which implemented the DoD’s initial vision for the CMMC program (“CMMC 1.0”) and outlined the basic features of the framework (tiered model, required assessments, and implementation through contracts). The interim rule became effective on November 30, 2020, establishing a five-year phase-in period. 

In March 2021, the Department initiated an internal review of CMMC’s implementation, informed by more than 850 public comments in response to the interim DFARS rule. This comprehensive, programmatic assessment engaged cybersecurity and acquisition leaders within DoD to refine policy and program implementation. 

In November 2021, the Department announced “CMMC 2.0,” an updated program structure and requirements designed to achieve the primary goals of the internal review: 

  • Safeguard sensitive information to enable and protect the warfighter 

  • Dynamically enhance DIB cybersecurity to meet evolving threats 

  • Ensure accountability while minimizing barriers to compliance with DoD requirements 

  • Contribute towards instilling a collaborative culture of cybersecurity and cyber resilience 

  • Maintain public trust through high professional and ethical standards 

The changes reflected in CMMC 2.0 will be implemented through the rulemaking process, and companies will be required to comply once the forthcoming rules go into effect. The Department intends to pursue rulemaking both in Part 32 of the Code of Federal Regulations (C.F.R.) as well as in the Defense Federal Acquisition Regulation Supplement (DFARS) in Part 48 of the C.F.R. Both rules will have a public comment period, as stakeholder input is critical to meeting the objectives of the CMMC program, and the Department will actively seek opportunities to engage stakeholders as it drives towards full implementation.   

Webmaster, OUSD A&S. “Securing the Defense Industrial Base.” OUSD A&S - Cybersecurity Maturity Model Certification (CMMC), https://www.acq.osd.mil/cmmc/index.html. 


4.     WHAT CONTRACTORS SHOULD KNOW ABOUT THE NATIONAL DEFENSE AUTHORIZATION ACT (NDAA) 

Congress passed the National Defense Authorization Act (NDAA or Act) on December 15th, 2021 for FY2022. The NDAA contains numerous notable provisions that will impact government contractors. Here are the highlights of what made it into the final version of the NNDA. 

 Supply chain readiness remains a focus (Sections 802, 841-848, 851). The systemic shock of COVID-19 on international supply chains is reflected in the NDAA, with several provisions that are designed to strengthen the supply chain for critical defense items.  

Continued emphasis on “Made in America” laws (Section 809, 842). This requires DOD to submit a report to Congress on violations of domestic preference laws, including the identity of the contractor and the action taken by DOD in response to the violation—a clear incentive for DOD to refer the matter to suspension and debarment officials. 

Streamlining procurement for innovative technologies (Sections 803, 806, 807, 834). The NDAA introduces a few provisions that will change how the government conducts business, although the ultimate impact may not be felt immediately. 

Increased focus on small businesses (Sections 861-867). The NDAA authorizes more funding for the use of Small Business Innovation Research programs. 

Revisions to other transaction authority (Sections 821-836). The NDAA introduces several modifications to DOD’s authority to enter into Other Transaction Agreements (OTAs).  

Bringing structure to termination decisions (Section 811). The Government’s right to terminate contracts for its convenience is one of the defining characteristics of government contracts, but exercising that right obligates the Government to pay the reasonable costs associated with the termination. 

Cybersecurity emphasized but mandatory reporting left out (Sections 866, 1501-1552). Cybersecurity remains a priority for Congress, as evidenced by the NDAA’s significant investment in cybersecurity, including an assessment of the Cyber Maturity Model Certification program and its impacts on small businesses. The final NNDA did not include mandatory reporting that was originally included under the House Bill however, its expected Congress will continue its consideration. 

Additional National Security Matters (Sections 855, 1243, 1251, 1509). The NDAA imposes a variety of additional measures directed at national security concerns relating to China and other U.S. adversaries. 

For more information on these provisions, read the full article. 

5. DEVELOP A THOROUGH UNDERSTANDING OF YOUR TARGET GOVERNMENT CUSTOMERS AND THEIR DESIRED SOLUTIONS 

While Business Development and Proposal teams should allocate time towards maintaining strong relationships with your company’s existing government relationships, it is always important to diversify your contract portfolio and pursue new agency opportunities to minimize business risk. In our conversations with industry prospects, we have heard unfortunate stories of small businesses relying on only one or two prime contracts for their revenue stream, who are then blindsided by losing their recompete bid or having their incumbent contract consolidated into another program. It can seem like an uphill battle to garner sufficient and accurate intel to break into new government offices or contracts, but it is essential to winning new contracts for business security. To win contracts with new offices, your team will need a thorough and intimate understanding of the solution preferences of your target government agencies, the evaluation panel members, incumbent contractors and their performance, technology stack, desired innovations, and more. If this type of knowledge seems difficult to capture with your existing resources, you may benefit from learning more about our VoicedIQ™ platform. 

6. CAPITALIZE ON INCREASING INFORMATION TECHNOLOGY SPENDING 

According to ITDashboard.gov, Federal spending on Information Technology has steadily increased over the last few years, with “major” investment* spending following the same upward trend. This same source projects that spending on IT expenditures will continue to increase in FY2022. With the increased demand for IT vendors, especially those in the emerging technology spaces working in AI, Big Data, Cybersecurity, etc., companies should invest in strengthening their IT capabilities to capture revenue from this increased funding for Federal IT programs. If your company provides IT services, and you have not yet done work in the Federal market, there is ample opportunity for your team to break into this space. If you are unsure of how to enter this industry, AlphaBrook specializes in helping tech companies enter and grow within the Federal government market. 

7. THE GOVERNMENT IS STEPPING UP TO BETTER UTILIZE AND SUPPORT SMALL BUSINESSES 

The Biden administration recently raised the federal contracting goal among small disadvantaged businesses from 5% to 11% for 2022. Federal agencies will work with the SBA in order to set their own goals to achieve this new milestone. A major reason for this has been due to the government's diminishing engagement with smaller firms. Although the SBA works with other agencies toward the goal of awarding 23% of government contracts to small businesses, the number of small businesses continues to decrease, according to a recent Congressional memo. 

In addition, SBA Administrator Guzman announced earlier this month that the agency will raise the profile of its Office of Women's Business Ownership (OWBO) by having that department report directly to the Office of the Administrator. Currently the OWBO is embedded within the Office of Entrepreneurial Development. Though the agency is in the early stages and isn't expected to finalize anything until the end of the next fiscal year (September 30, 2022), OWBO Assistant Administrator Natalie Madeira Cofield will immediately report to Administrator Guzman. 

8. TOP CONTRACTING EVENTS IN 2022 TO MAKE NOTE OF

There are upcoming events for federal government contracting in 2022 to make note of depending on your business. There are several forums and summits set throughout the beginning of the year you won’t want to miss.

 See an overview and venue details for these events and gatherings here. 

To learn more about how AlphaBrook can help you position for these upcoming developments in CY2022, or to understand how our bid intelligence can help your team capitalize on contracts or opportunities in the new year, request a pressure-free conversation.



Monica Cardona