Five Impacts of the OMB Reform and Reorganization Plan

Posted by Nick Schiffler on July 12, 2018

Acquisition Guidance in OMBs Revised Circular A 130

The Trump Administration recently released a plan containing recommendations to reform and reorganize the executive branch, titled “Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization Recommendations.”

This plan was released in order to create a cornerstone to “build productive, bipartisan dialogue” while outlining a vision for government reorganization. Among the goals of the plan are refocusing structures around customers; enhancing management accountability; prioritizing limited resources while eliminating unnecessary activities; and improving overall communications and coordination.

Our Federal Market Analysis team has analyzed the plan and highlighted several areas in which this may have an effect on government contracting. Here are five key areas in which the OMB reorganization plan may impact those who do business with the government.

Digitization and Customer Service

Principal Research Analyst Christine Fritsch noted that two themes repeated throughout the plan were the digitization of government and the need to improve customer service. The plan requires that agency business procedures and records must be fully electronic by the start of 2023, and calls out several programs that particularly need customer service improvements, including Federal Student Aid, Airport Security Screening, National Parks, Veterans Health Care, Passport Services, Emergency and Disaster Relief, and Medicare.

“The bottom line between digitization and customer service is this: the more agencies provide electronic processes, the easier it is for the public to connect and trust in federal government services.” 

Changes to Acquisition Processes

There are potentially significant contracting implications related to acquisition processes in the reorganization plan, writes Senior Principal Research Analyst Alexander Rossino. The process for allowing small businesses to participate in government contracting programs may be simplified and made more efficient. And the proposed movement to more electronic-based records management systems could provide a big boost for cloud and/or blockchain vendors.

“Specific plan recommendations concerning contracting are few, but the two measures that are mentioned are potentially consequential if implemented.”

Department of Transportation Business Opportunity Impacts

Rossino also mentioned that the plan is a mixed bag for Department of Transportation (DOT) vendors. The plan proposes the oft-discussed idea of privatizing the air traffic control aspects of the Federal Aviation Administration (FAA) – a proposal that members of both the House and Senate have previously publically shot down. The plan also highlights other potential areas for consolidation and divestment.

“The OMB plan does not necessarily call for the wholesale divestment and reorganization of the DOT… the shifting of certain grant and oversight programs to DOT control could grow the need for additional non-IT professional services support, something that small businesses in particular could capitalize on.”

Organizational Changes

Senior Principal Research Analyst Angie Petty broke down the numerous proposals contained within the reform plan that would affect the current federal organizational structure, many of which would dissolve an existing organization or office. This could lead to contracting opportunities, as agencies would potentially require assistance in areas like change management, physical office moving and managing and combining information technology infrastructure systems.

“Federal contractors should keep close tabs on reform and reorganization efforts. Elimination and consolidation of offices and programs will likely lead to the potential termination of contracts and/or the consolidation of contracts.”

Impact on Cybersecurity

The reform plan is aiming at providing an enterprise approach to building and staffing federal cybersecurity, writes Federal Advisory Research Analyst John Slye. It would make filling gaps in agency cybersecurity staffing a priority. Some of the key provisions in the plan to meet this staffing challenge include analysis of the cyber workforce gap, streamlining hiring of cyber workforce, standardizing training, introducing workforce flexibilities, evaluating a potential federal cybersecurity reservist program, reskilling staff to fill cybersecurity gaps and supporting federal cyber education.

“The Trump Administration is looking to take an enterprise approach to the challenge, a considerable goal that will require the collaboration of multiple agencies and foresight into the cybersecurity challenges of the future.”

Looking for more in-depth market insights from our Federal and SLED Market Analysis teams? Find everything you need to understand federal, state, local and education contracting at the link below:

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