Column: Feeling Whiplash?
What are small business contractors to do?

      Thank goodness some of the confusion is over with the presidential transition process underway.

      But there is still the prospect of unsettling developments--possibly a government shutdown or a veto by President Trump of the national defense authorization bill--in the next few weeks before Inauguration Day on Jan. 20.

      The post-election political divisions and the upcoming two U.S. Senate races in Georgia in early January also are factors that could cloud the federal market for small business federal contractors in the coming weeks and months.

      Other factors include:

• Are Paycheck Protection Program loans taxable if they are forgiven, or not? If not forgiven, how does a business report expenses?
• Since 1998, Congress can’t pass a budget on time, or even by the beginning of the fiscal year, despite the requirement they do so.
• Agencies don’t post acquisition forecasts, despite an October 1 deadline.
• The annual small business scorecards are not posted by the Small Business Administration until nine months after the end of the year.

      Meanwhile, small business federal contractors are providing cost-efficient and effective products and services to our government and the public.

      If we are late or fail to deliver, we face debarment. If we deliver early or more than expected, we are not rewarded. If we agree to work beyond the scope of the statement of work, but the program manager and contracting officer don’t document it in a modification, we end up eating the cost.

      It is time for small business contractors, as citizens, to become advocates. We must let our senators and representatives know that just as we as federal contractors have serious responsibilities to fulfill for the government, so do elected officials and federal agencies have serious responsibilities to fulfill for us. If the government does not carry out its end of the bargain, it impacts our ability to do business and serve the public.

      Let’s start with the recent election and the stunning allegations over its integrity that followed. According to experts in government and independent outside observers, the American system of voting and vote-counting is sound. For the first time ever, I worked the polls myself, and came away with a firm belief in the transparency, credibility and auditability of citizen voting in the United States. And yet the integrity of the election has been repeatedly questioned in recent weeks with very little evidence. Strong allegations require strong evidence. That has not been the case.

      Another looming problem is the turmoil that generally accompanies presidential transitions. There currently are many vacancies in leadership positions in federal agencies, including in acquisition, and in the coming weeks more can be expected. Maintaining smooth and consistent operations in contracting and other duties will be a challenge that federal agency managers and employees must strive to meet.

      The executive ranks face a huge amount of turmoil as well, as the number of unconfirmed Cabinet officials and agency program and policy positions is the highest I’ve ever seen in 40 years of monitoring Federal agencies. Government cannot function for the people if the leadership positions are vacant or filled by “acting” appointees.

      Adding to those normal needs, in the coming year we have COVID-19 vaccine distribution needs, economic dislocation and many other policies and processes so urgent for these economic times. New appointees need time to study and prepare for their responsibilities. And by the way, this period is needed by Trump’s appointees too. Many positions need to be backfilled where the incumbents have resigned or been fired, or which have been filled only on an interim (“acting”) basis for months or years.

      Regarding the IRS and the PPP loan forgiveness matter, on Nov. 18, Treasury put out Revenue Ruling 2020-27, providing (confusing) guidance on the deductibility of PPP loan expenses, and on the same day Revenue Procedure 2020-51, providing “safe harbor” for certain recipients that forego forgiveness or have their forgiveness requests denied. On Nov. 19, Sens. Chuck Grassley, R-IA, and Ron Wyden, D-OR, took issue with the Revenue documents, saying they miss “the mark.” Their joint statement said “We explicitly included language in the CARES Act to ensure that PPP loan recipients whose loans are forgiven are not required to treat the loan proceeds as taxable income.”

      Senate Majority Leader Mitch McConnell, R-KY, has refused to bring to the floor important legislation for discussion and compromise. The Treasury Secretary is in an open fight with the head of the Federal Reserve. The Defense and Homeland Security Depts. both have “acting” secretaries.

      It’s time to get our national act together and focus on serving the American people as a whole.

Tom Johnson is president of Business Research Services and publisher of Set-Aside Alert. He can be reached by email at  tjohnson@setasidealert.com.

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Column: Column: Feeling Whiplash?
What are small business contractors to do?

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