Subcontracting Challenges: An Executive Q&A with Barbara Doherty

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Doing business with the federal government requires a unique skillset. It not only necessitates a thorough understanding of complex regulations and demonstrable program performance, but also pure grit to navigate the crowded landscape of companies vying for the billions of dollars of addressable opportunity. Subcontracting under a prime contractor is one way that small businesses can grow in the market, building experience and positioning themselves with less financial risk.

In this Expert Q&A, Barbara Doherty, a former government contracting officer and current vice president of contracts and procurement at Akima, shares her insights on how subs and primes can build successful, long-term relationships to deliver increased value to their government customers.

Read the Executive Q&A

Let’s start by looking at what’s going on in the industry. What are some of the key issues or trends you see today that are impacting both prime and subcontractors working with the federal government?

The two biggest trends I see impacting government contractors today–no matter their size–are 1) The Buy American Act; and 2) Changes that are coming as it relates to our nation’s supply chain.

In late January 2021, President Biden signed an executive order strengthening the rules outlined by the Buy American Act. Passed by Congress in 1933, the Buy American Act created a national preference for the government to procure only domestic materials used for public construction unless a waiver had been granted. Goods or products were qualified as being domestic when they were 100% manufactured in the United States with at least 50% domestic content. However, the act had several ambiguities depending on the material, the amount of the purchase, and what qualifies as “American made.” Biden’s executive order makes things much clearer. It updates how domestic content is defined and measured, as well as increases the required threshold. The order also creates a new senior position at the Office of Management and Budget (OMB) responsible for overseeing the waiver process with a goal of reducing the overall number of future waivers that are granted.

The second key trend impacting contractors is the government’s desire to increase the efficiency, integrity, and security of our nation’s supply chain. By definition, a supply chain is “the sequence of processes involved in the production and distribution of a commodity.” However, it is a little more complex than simply getting materials from point A to point B. Commercial businesses operating supply chains select their distribution facilities based on several key demographic factors, often leveraging just-in-time delivery to drive down costs and increase productivity. However, the way in which the government procures goods is quite different and affects all tiers of the supply chain. Agencies typically
outline the how, what, and where of the buying for their contractor partners—but things don’t always go as planned. Take the global pandemic for instance: When the pandemic hit, manufacturers were temporarily forced to shut down their operations and the impacts to the supply chain were far reaching.
Government buyers and contractors alike were left scrambling, not only to obtain products, but also to
maintain government compliance in pursuit of those products. And it’s not just pandemics we need to
prepare for. There are increasing biological threats, cyber attacks, geopolitical competition, and extreme
weather events that can severely impact the availability and integrity of goods and services if steps aren’t taken to improve resiliency in the near- and long-term. The government is taking a serious look at this, and President Biden signed an executive order in February 2021 establishing a 100-day review of America’s supply chain. The review will take an in depth look at our supply chain’s risks, vulnerabilities, preparedness, and more. The result of that report, I’m sure, will bring about sweeping
changes that contractors must be prepared for—both in terms of investments they will be required to make, as well as the overall way in which they do business. Two other notable items related to the supply chain that primes and subs should read up on sooner rather than later, are the new cybersecurity requirements known as the Cyber Maturity Model Certification (CMMC) and restrictions on the use of products made by Huawei and others as required by Section 889(a)(1)(B) of the 2019 National Defense Authorization Act (NDAA). In the very near future, companies will be required to demonstrate continuous cyber and supply chain security as a core component of their operations. Akima is already taking steps to prepare for these significant changes—and I recommend subcontractors do the same if they want to remain competitive.

How does Akima approach subcontracting?

As an Alaska Native Corporation, Akima is comprised of more than three dozen companies that compete as small disadvantaged businesses. We also have the advantage that, regardless of our size in the NAICS code, we qualify as a small disadvantaged business when a subcontractor to a large business. That, coupled with our very diverse portfolio, makes us quite attractive as a partner. We deliver everything from facilities, maintenance, and repair services, to high end information technology and advanced systems engineering. But no matter whether we are teaming with a prime or looking for a sub to help
us win new work, the number one thing to focus on is delivering increased value to the end customer and the mission.

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