February budget clashes could complicate IT modernization, trade group says

As Congress was busy negotiating an end to the budget standoff to end an almost-three-day government shutdown Monday, a trade group of leading government contractors was preparing for a month of uncertainty that could harm their ability to support agencies’ ongoing modernization efforts.

Congress did reach a deal, and President Trump signed yet another continuing resolution Monday night that funds the government until Feb. 8.

Nevertheless, “I do think one of the lessons that we got from this past weekend and today though is that this could happen again, and it could last a lot longer than a weekend and one day,” Professional Services Council President David Berteau said in a press call.

Congress still faces a pileup of budget questions converging on the calendar, including the anticipated unveiling of the fiscal 2019 budget, federal agency reorganization plans and ongoing fiscal 2018 budget negotiations.

The result, Berteau said, is that contractors and agency officials will likely prepare to make implementation timelines more shutdown-resistant with contingency planning — especially large contracts like Enterprise Infrastructure Solutions, which is scheduled to go online in 2020, and a $238 million mobility contract for the Census Bureau set to roll out in 2019, which both have narrow timelines.

At the General Services Administration, officials are keen to stay on schedule with the EIS contract to avoid the costly delays that plagued the contract’s predecessor, Networx.

On the other hand, the Census contract, which calls for 400,000 mobile devices — starting with 75,000 by August 2019 — for enumeration ahead of the 2020 Census, has already seen testing delays and a contract award protest, putting a squeeze on its delivery.

Berteau believe, though, that agencies and contractors will be prepared to navigate the timeline issues following the most recent shutdown.

“I think that the level of preparation on the part of the contractors, and presumably on the part of the government as well, in terms of being ready when Feb. 8 rolls around will go up quite a bit as a result of this past weekend,” he said. “I’m optimistic that will even further reduce the potential negative impact on those contracts the next time around unless that shutdown last longer than two or three days.”

But the CR could more profoundly affect agencies’ long-term budget planning. The president’s fiscal 2019 budget request is scheduled to debut early next month, despite the absence of a permanent deal to fund the rest of fiscal 2018. That could further complicate current negotiations, including whether there will be any funding for the central IT fund established by the Modernizing Government Technology Act in fiscal 2018.

The law calls for a $500 million fund to be established through appropriations split over fiscal 2018 and 2019, but without a budget deal, it’s unclear when money will be set aside.

Agencies also have to establish their own working capital funds under which they can reprogram unspent monies toward information technology projects. Even though the MGT Act doesn’t allow agencies to spend money from their working capital funds in fiscal 2019, Berteau added that agencies may be reluctant to even establish them if they don’t know what their budget will be.

“I think there is a non-zero possibility that we could just end up with a series of CRs that eventually gets us through this fiscal year because we can’t reach agreement on the numbers,” he said. “Under that circumstance, it becomes harder to set up the working capital funds because you are constrained in terms of your money.”

Another wrinkle is OMB’s still unreleased agency reorganization plan. Though it was initially expected to be released with the fiscal 2019 budget, Berteau said there hasn’t been any recent indication that it will, providing little insight into future workforce levels or how they will impact modernization plans from a talent level.

“The place that this could come into play is if the reorganization plans reduce the federal civilian personnel in those agencies to the point that it inhibits their ability to execute some of the missions aligned with MGT Act or anything else,” he said. “We don’t have any visibility into what the civilian-industry target numbers of those agency-level reorg plans will be when that budget is submitted.”