Life after CRs: contractors sorely needed

Monday - 3/21/2011, 10:08am EDT

Tom Davis, Director, Federal Government Affairs, Deloitte

Click below to hear his comments

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By Suzanne Kubota
Senior Internet Editor
FederalNewsRadio.com

The government might be pinched, but there will be plenty of opportunity for contractors.

That's the message former Virginia Congressman Tom Davis delivered to a gathering of federal contractors convened by Microsoft.

While agencies might launch fewer big projects, Davis told contractors there will be powerful motivation for government to improve efficiency and cut costs.

"They've got hiring freezes, they've got pay caps, they have all these other things. They're just not going to be able to attract the talent to come and try to do this stuff in-house. They'll make feints at it now and then trying to do this here or there. But at the end of the day, when they need solutions, they're going to look to the private sector because that's basically where the solutions are. So if you're in that spot, if that's the kind of work you do, I think there's going to be plenty of opportunity, particularly in cost-cutting because government's going to have to provide more with less."

Davis told the gathering to expect an effort to transform business.

"Budget challenges are going to drive them to new technologies, to new operations models, to more business process reviews. They've got to continue in that vein."

The starting point, said Davis, will be technology.

"I think at the end of the day as you look at the appropriations cycles, and I'm not looking toward this year's CR, I'm looking toward next year....not getting into the weeds as much as giving agencies just less and saying 'manage it.' That, in a sense, almost drives them to find savings, and that means going to IT."

Davis made it clear though that operating under continuing resolutions makes the process frustrating for everyone, federal agencies and contractors alike.

"CRs are the worst things for a government contractor," said Davis. "You know, you can talk about everything else going on, but these CRs are the worst because what happens...an agency head, the first thing they're going to do is protect their people, right? ...And now April 8th, half the year will be gone if they resolve it at that point."

After the budget is settled, Davis offered hope for contractors. "But the government is going to become more cost driven as they look to the outside (for) what to do. You can only beat up contractors for so long before you really find out you need them and you can't function without them. So they're going to be looking at ways that you can offer efficiencies and the like."

Tom Davis is now the Director of Federal Government Affairs for Deloitte.

For more from Davis and why he says the federal government will be moving away from ERPs, what's ahead for the FY 2010 budget, and why it might be time to consider cutting entitlement spending, listen to the rest of his comments at the Microsoft Government Contractor Summit at the top of this page.