Interview transcript:

 

Terry Gerton You have had such a remarkable career. You led workforce and transformation efforts across nine agencies, if I counted that right. What first drew you into public service?

Elizabeth Kolmstetter Yes, I’ve really enjoyed my career and the ability to move around in different agencies. I think what drew me first was my first job, which was at the FBI. And being part of, probably because of the law enforcement-public safety angle, I really appreciated and learned how hard people work, but particularly the men and women who put their lives on the line every day for the American people. They’re unsung heroes; you don’t see that, you don’t understand that unless you are in the organization. And that, I think, was really what bit me into the whole public service and really thinking about, as an organizational psychologist, thinking about what motivates people and really trying to understand how to bring out their best every day. When you work with extraordinary people who are giving everything they have to the American people through the agency, that really struck me as incredibly interesting, but also important. So I really started at the FBI 32 years ago, and I never looked back.

Terry Gerton Well, across three decades, I can imagine you’ve seen a lot of change in how the federal government manages, recruits, retains its people. Your last job, though, I think is fascinating. You were the first and the only chief people officer in CISA. How did that mark sort of a culmination of all the transition that you’d seen in workforce management space?

Elizabeth Kolmstetter We traditionally think of human resources or human capital as the life cycle of hire to retire. And I have been in that my entire career, in that field. But this new model, the thinking was that if you separate and have a chief people officer who could dedicate the time and effort and initiatives to the engagement, the recruitment, retention and what keeps people here, what skills we need to develop, our leadership which is so important to culture. And instead of fighting the HR operations because, you know, if someone’s not getting paid or somebody, you’re trying to hire that person, that’s always going to take priority over what we say is more strategic, more culture, longer-term engagement efforts. So being able to separate that and have both a chief people officer and a CHCO allowed us to really focus on the entire human experience at work. Really for cybersecurity, having to recruit and retain and motivate and develop that workforce was a priority for national security. So, very exciting.

Terry Gerton Well, following up on the government shutdown, organizational culture’s really taken a hit. I think it would be fair to say that. What advice would you have for folks who will be coming back into the HR space and trying to bring people back to work, trying to rebuild that culture? What lessons have you learned that you’d want to share with them?

Elizabeth Kolmstetter I certainly cannot underscore enough the importance of culture and engagement. You have got to keep people motivated in order to achieve these just enormous and daunting missions. And so I hope that the pedal will go back down on the initiatives and the importance on engagement and starting with leadership. But really my advice to all leaders and especially those who are in human resources is just keep focusing on the people. Let them know and appreciate them for their work, their effort, their skills, their dedication. I think that you just have to remind people why they’re here. I would say, look at the people that are working without getting paid. I mean, who else would do that but public servants who are so committed to why they work and what they do for this country? Remind people that’s why we’re here. Our goal and our mission is more important than ourselves. So being part of that is so important. I do believe that the public is even more recognizing that now, probably because the shutdown has gone on so long that the appreciation is there and the importance is there. It’s never gone away. And don’t get caught up in the rhetoric, because what the American people need is really dedicated, smart, innovative public servants. And they have them, they’re there, and they’re going to continue to do the best that they possibly can.

Terry Gerton I’m speaking with Elizabeth Kolmstetter. She’s the retired Chief People Officer for CISA and a newly elected fellow of the National Academy of Public Administration. So Elizabeth, let’s pick up there. You’ve received lots of awards in your professional government career, but being elected a fellow of the National Academy is kind of a big deal. What does it mean to you personally?

Elizabeth Kolmstetter It is a very big deal, and I am incredibly humbled by this honor. I never thought that I would be named a fellow of NAPA. I have known NAPA, I’ve worked with NAPA, I have used NAPA to do studies at many of the agencies where I worked because they are so respected for their credibility, their research, their evidence base. It’s something I’ve always believed in because, of course I’m a psychologist, so I think science and data is really important. But being named a fellow, I think, is probably going to be one of the biggest hallmarks of my professional career, because it recognizes not just my background, but my contributions to public service. And my desire to keep giving now that I’m retired gives me a really important way to keep giving and keep seeking to improve public service, public institutions.

Terry Gerton The Academy really is a cross-sector community and your career has been sort of multisector. How do you plan to work with the Academy to advance good public administration?

Elizabeth Kolmstetter I am really going to be focused, I think, on the workforce part of things. Some of the grand challenges that NAPA has posted are about, obviously, reinvigorating public service but continuing to recruit and retain and motivate people into public service. Getting the story out — what is it like? What does it mean? Why is it important? And I also really believe in permeability. I don’t think you have to come and stay in one area anymore. There’s so much more mobility and opportunity. Come and be a public servant for a while, learn, understand, be part of that fabric, and then go do academia or private sector or nonprofit. But I think coming and going and crossing the different sectors is actually going to create more integration, more partnership across the sectors, which we need to advance our society, really. It’s not so much a great divide anymore like it used to be; it’s really an integrated partnership. So I would like to be part of that aspect and of course improving the public sector talent management program since that’s what I do. I think that we could modernize more and NAPA has had a long history of doing studies on modernizing talent programs again to bring out the best in the people that work in public sectors.

Terry Gerton Well, both of those recommendations, certainly the permeability and talent management, are aligned with exactly what the new OPM director says he wants to do. If you were advising him, where would you suggest that he watch out for landmines and maybe take advantage of opportunities?

Elizabeth Kolmstetter Well, I was very pleased to be able to hear the new director, Scott Kupor, speak at the NAPA conference last week and hear directly some of his ideas. I would say that he does need to keep listening, first of all learning where those landmines are, but also I love his bold move to do some more things that perhaps people say are more private sector, but they’re really cutting edge talent programs. Especially recognizing and rewarding top talent, which he is talking about, looking at how we compensate and reward excellence. I think he’s right on. We need to do that. I also think that we should look at more hybrid with employment at will. I don’t think that just coming in and staying and rewarding mediocrity is what the government needs anymore. Certainly I believe in job security — if you’re doing a great job and you’re continuing to develop your skills, we should recognize that. But I have seen over my career a number of people who kind of coast. I don’t think that’s a service to the American people. I do think we need to, again, reward and recognize continued growth and skills, especially in technology and AI and these new forms of getting work done, and I do not see that as much in the federal recognition program. So I’m on board with him trying to find a way forward that actually modernizes some of these traditional methods that we’ve used in the federal government.

Terry Gerton Elizabeth, what advice would you have for someone, a young person who’s thinking about joining public service, but maybe is disturbed at what they’ve seen in some of the later trends — what would you tell them?

Elizabeth Kolmstetter First of all, always keep an open mind when it comes to your career and opportunity, because you never know where that amazing opportunity is going to open. And I, myself, said I would never work for the federal government because I believed it was bureaucratic and slow. So I always tell people when I give career talks, I am an example of what not to do. First of all, never say never. But you asked if somebody was already open to it, and I would say, walk through that door, get some experience in the public sector. Because until you experience it, it’s hard to appreciate what it is and how it actually works. So I think rotations in the public sector — think AmeriCorps, which is the domestic Peace Corps — there are so many ways to do service to the society, whether it’s local, state or federal, and get that experience. Because being part of a team that is working for a mission that is bigger than profit or any of the different sectors: It’s a different feeling to be with men and women and people of all genders. What is that spark that makes us so dedicated every day to come and make a difference? And that is what you become, a fabric, part of the DNA. You become part of that. That becomes your value set, that we have to do better. We have to keep driving our society forward. And this is a great country with great people who deserve the best. So being part of that I think is very worthy, but don’t think of it as you have to go in and stay for your whole career — back to that permeability. Come in and have that experience and then go to the private sector, or go into nonprofit. But come and have experience, because then you know what it takes and you will always have those partnerships and network as you go forward.

The post From NASA to CISA, she’s shaped the federal workforce for three decades first appeared on Federal News Network.

Interview transcript:

 

Terry Gerton I want to start with a topic that some of our listeners are writing in about. September 30 was the end of the DRP and the day before the shutdown. Folks who retired effective that day maybe are in a bit of a limbo about what the status is on their retirement packages. What are you hearing from OPM around the processing backlog?

John Hatton So OPM seems to be trying to tackle this issue. And we’ve seen some reporting on statistics from OPM, but that may not show the full picture. They have recently started reporting at least interim pay status. So once a claim gets to them, they have to initiate an interim pay, which is going to be some lower percentage than your full annuity typically. And they’re reporting it’s six days until interim pay. That doesn’t necessarily show how long it’s taking to get from when you submit in your retirement date application and when that claim gets over to OPM. We’re concerned that there is maybe some delays on the agency side, particularly impacted by the shutdown. I don’t think we have good data yet on that to say exactly where it is, but here are some numbers. Kapoor in September said there was about 60,000 retirements in the online retirement system. So not yet at OPM, but they had visibility into them. And about 35,000 in September. In October, OPM received 20,000 claims. So if there’s 35,00 in the system and only 20,00 got to OPM, that tells me there may be delay of at least 15,000 getting over to OBM. Now that also started the shutdown. I can only imagine that caused some delays getting over through the process at the agency level. OPM itself was not impacted by the shutdown in terms of retirement services. They are exempt. They are funded through trust fund dollars, so it wasn’t like they were shut down in terms of processing. But at the agency level, many people may not have been there. The other thing is they’re reporting retirement claims processing, and we don’t have the November figures in yet from OPM, so that’ll tell us a little bit more about how they’re doing. Their current stat on time to process the full claim is 66 days. That’s down from 79, so that sounds like a good thing. But again, we don’t have necessarily all the numbers visible. I think they’re doing a little bit better showing some of those different stats on interim pay and even survivor benefit processing, but there’s still a lot we don’t really know.

Terry Gerton So folks who are in this limbo status, who may not know where their file is right now, what’s your advice for them?

John Hatton Well, one, if you’ve done it through the online retirement application, you may be able to see if there’s an issue where it’s stuck at payroll, stuck at agency level and not over at OPM. And so maybe there’s somebody you can talk to at agencies. Now we’ve heard from some members that there’s nobody to talk to at their own agency. And maybe that’s because there’s been these large-scale reductions in force. It could have been a shutdown-related issue as well. So that’s not great advice. You can always try to call OPM, we always try to help our members, try to elevate claims when it’s taken a longer time. I think for a September retirement date with the amount of retirement claims coming in and with some potential delays at the agency level, we may not expect this to be kind of a super long time at this point. Now it gets into January, February, you don’t have a full retirement processing claim and I think that’s a much longer delay. There’s also often cases that just take a lot longer. So there’s simple cases where you’ve worked for one agency your whole life, and it’s pretty easy for OPM to do. But there’s other cases where you bounce around different agencies, maybe you left service, you came back; maybe you’ve worked under the normal retirement system, but separately under a special category where you have a higher multiplier; maybe some of your files are over at the National Archives, you have to get them there — so those types of things really delay the process and how long you get through the system. You see a degree of variability between different types of cases in terms of getting through OPM.

Terry Gerton That’s great advice. I’m speaking with John Hatton, the Staff Vice President for Policy and Programs at the National Active and Retired Federal Employees Association. All right, John, let’s move into some other things that may be affecting federal civilians or the retired population. One of the things in the continuing resolution back in November included language blocking reductions in force. What are you seeing there in terms of compliance, notifications, people being brought back?

John Hatton Well, in terms of compliance, with those who were the shutdown RIFs, those for whom the administration took the opportunity to say, we are not required to do this function by Congress right now because we’re in a shutdown, there’s no appropriations law. They started the process of reductions in force for some people because of the shutdown. Those have been reversed; those people have been reinstated. Then there are other reductions in force that started before the shutdown. But the language in the continuing resolution was very clear. There’s no funds to be used to implement, initiate or even follow through on these RIFs. So the administration tried to go through with continuing to fire a group of State Department and Foreign Service employees. That was blocked by a court issuing a temporary restraining order against that, based on that continuing resolution language. So the good news is that language passed as part of the CR that was negotiated in by Sen. Kaine has been effective at stopping these reductions in force. Not just ones that were started in the shutdown, some of them were started before, and preventing any new ones from going on until at least January 30.

Terry Gerton With all of these changes in the delayed retirements and the high-rank freezes, what are you sensing is the mood among federal employees right now as we get to the end of this year and the start of a new one?

John Hatton Well, I don’t know that it’s good. I don’t think we’re at a point where it’s recovered from what has been a very tumultuous year, particularly coming off a shutdown where you had to work for a record amount of what I think was 43 days without pay. And other people were not working and coming back to large backlogs of work. Do you think, you know, there are some signs of hope for a return to a little bit more normalcy? And I think this blocking the administration’s reduction-in-force language, if we get full year appropriations bills done, I think that puts a little bit of a bit of a check on some of these executive actions. I think probably too late for many, but it may give a little bit more security for those currently in the federal workforce that have made it this far that maybe it won’t go further. So I think we’ll see. The Congress is still working through the appropriations process. They’ve only passed three full-year bills; I don’t expect they’ll pass all the bills, full-year, but in the Senate they’re trying to five bills passed, which would be the bulk of spending for the federal government.

Terry Gerton What are you tracking there in terms of federal pay raises for 2026?

John Hatton Well, the president in August issued an alternative pay plan that would provide a 1% across-the-board pay increase. I don’t expect that to change through the appropriations process. It doesn’t look like anything’s going to be passed this month. I mean, the Senate is trying to pass a five-bill package, but it looks like they’re having problems getting it through. So as long as Congress doesn’t say anything, I would expect that alternative pay plan to be implemented via an executive order. So at least a 1% pay increase next year for federal employees.

Terry Gerton That doesn’t seem like it’s keeping up with the cost of living adjustments.

John Hatton No, it is not. Certainly, the cost of living for everybody in America has continued to go up, as reflected by the consumer price index. Inflation is still at elevated levels, and this is coming on the heels of several years of very high inflation. So it’s not just the current increases in prices, but it’s catching up to the past increases. So that continues to be an issue, I think, for federal employees is that these pay raises, while it’s good to have something, it’s really not keeping up with these costs. I mean, just look at health premiums, which is not the entire basket of goods that you’re looking at, but health premiums went up 12.3% on average this year for enrollees. Clearly, 1% pay increase is not going to keep up with that. So more of your income is being pulled away into health care increases and all the other goods are going up at a higher rate as well. It makes federal jobs less competitive. And that comes on top of a year where the jobs just became a whole lot less secure than they used to be, when certainly the work that people have been putting in through their public service has been devalued, whether it be shutdowns or just rhetoric or the way people have been treated. So certainly been a tough year. I don’t think that 1% does nearly enough, but it is something. I think that’s likely what’s going to happen, even if it’s too little.

The post Some hopeful signs of stability for the federal workforce first appeared on Federal News Network.

Interview transcript:

 

Terry Gerton I thought we would just take advantage of the end of December, the end 2025 and ask you to take a look. There’s certainly been no shortage of acquisition news and reforms, but as you think about the whole of the last 12 months, what really sticks out for you is the most significant changes that the Trump administration has made in acquisition?

Emily Murphy So I think there’s three things, or three groups of things I’ll say, that I think are very significant. The first one is just how involved the administration’s been in acquisition. They came in and the leadership on day one got very involved in government contracting. To this day we’re seeing reviews at the secretary level, administrator level, of procurement. But from day one you saw the leadership coming in at GSA and at other agencies making procurement and acquisition really a focus. They did those “defend the spend” reviews. So it’s been a much more intense focus on government contracting than we’ve seen in a long time. And then that was followed up with the three executive orders that I think of as going together that came out. Where the president looked at first — wanting the government to buy commercial when possible, saying that we are going to consolidate how procurement operated, we’re going to buy as one government, and that we were really empowering GSA on that level. And then announcing that we were going to rewrite the FAR. Then the third one has to be the actual FAR rewrite, which was an amazing amount of work that the OFPP, GSA, NASA, Department of War did in a matter of months. And we’ve got several agencies having adopted that deviation. So I think those would be the three things I’d point to as the biggest. There was so much that happened in 2025.

Terry Gerton When you think about those three together, what would you say the biggest impact has been, especially on the contracting community?

Emily Murphy The contracting community is still trying to figure out what the new normal is. Reviews, repricing OneGov initiative, the change in the workforce with the deferred resignation program and that fork in the road, there just aren’t as many people engaged in contracting anymore. And so everyone’s trying to figure out still how to execute. How do we get stuff done? And that’s probably the biggest thing I’ve seen affecting both industry and government alike on the government contracting side.

Terry Gerton Well, you mentioned the fewer number of contracting officials in the government. There’s been so many disruptions, the DRP, the shutdown, the continuing resolution. What is life like for the contracting workforce these days?

Emily Murphy Hectic. Again, contracting officers are very mission-oriented and rule-oriented people. So, they’ve got a conflict right now in that the rules are changing, which makes it hard for them to be as strict in adherence. And they’re trying to deliver on a mission that’s also really rapidly evolving with a lot less resources, but a lot of new tools also, like AI-empowered tools — GSA AI comes to mind. A very new approach to acquisition, in that they’re being told, “go out and look for commercial.” We’re going to get rid of a lot of the clauses that they’ve been trained to use from day one. Speed is important, but at the same time, knowing that there is a lot of oversight waiting for them. And when I say oversight, I don’t just mean the traditional oversight community, but you’ve also got a situation where the heads of agencies are reviewing individual procurements themselves, which is a very unusual situation to find ourselves in. So their bosses are looking very closely at the work they’re doing.

Terry Gerton Are you seeing any evidence of training or common guidance that’s going to help them pull all of those diverse stimuli together?

Emily Murphy I’ve got the say, the work when they did the FAR rewrite, the practitioner album, the companion guide, there are great resources there. It’s on-demand training, so you can go and look at it again and again and it’s short, to the point, you can get there. But there’s not the time for the traditional training that we’re used to, where someone would be going to DAU or FAI and taking a class. Very much it’s people need to be trained right instantly and be able to go in and put those in place, and a rewrite of the entire FAR is a pretty extensive thing to be training someone on. So, got to give credit to the folks who put that together. They put together as many resources as they could. But it’s going to take some time for that all to sink in and for us to see how it works. And remembering that most of it’s still being done via deviation and very few agencies have the same deviations right now. So the uniformity that we’ve come to expect with government contracting isn’t there right now. It’ll come back, but it’s not there right now.

Terry Gerton I’m speaking with Emily Murphy. She’s a senior fellow at the George Mason University Baroni Center for Government Contracting and former administrator of General Services Administration. All right, Emily, let’s turn to our crystal ball to looking ahead to 2026. With all of those changes that you just really quickly summarized for us, what trends do you expect to dominate acquisition in 2026?

Emily Murphy I think we’re going to have another year of reviews. I think that we’re going to continue to have scrutiny. I think there’s going to be a push to get the FAR rulemaking process done. I think that there’s going to be an increased push towards using CSOs, OTAs. Hopefully we’ll get SBIR reauthorized soon, because I think the nontraditional contracting is going to continue to be a key area of focus. And I think when you look at the PMA, we’re getting a very clear signal that there’s going to be more consolidation happening as well.

Terry Gerton Well, speaking of the PMA, there’s some things in it that you might expect to see, but some things that you might expect to see that aren’t in it. For example, customer experience and shared services that have been tent poles for several administrations.

Emily Murphy That’s true. I was surprised that shared services in particular isn’t called out explicitly. I think you can read it into a fair number of places, but it’s not called out as its own goal or as its own objective. When you think of the buying as one entity, smarter faster and cheaper, that seems to be pushing towards the idea of procurement as a shared service. The customer experience isn’t itself called out directly, but we do talk about leveraging technology to deliver faster and more secure services. We’re looking at trying to optimize the real estate portfolio so that people can have cost-effective locations for agency buildings. I don’t think that the customer’s written out, but they’re not called out explicitly in the same way they have been in the past.

Terry Gerton The language on “demand partners who deliver” seems to be sending a message to contractors and grantees.

Emily Murphy It is. They’re saying they want to contract with the best businesses. And that’s not surprising given that there’s been a lot of conversation about trying to redo past performance. And we’ve heard it both from Congress and from the administration that we need to be putting more focus on making sure we really are getting results out of our contracts. Holding contractors and grant recipients accountable is very much in keeping with the rhetoric we’ve heard over the last year, and those “defend the spend” conversations that have taken place between GSA and contractors and other agencies and their contractors since they’ve done those reviews. The OneGov deals very much are about demanding better pricing, demanding results. I was surprised to see that they were saying put political appointees in control of the grant process. GSA is not a grant agency; it wasn’t an area we spent a lot of time on. But I always thought that political appointees did best when we set the objectives, and then we let the career employees go in and implement them and hold them accountable for meeting those objectives, rather than actually running the process itself. But it will be interesting to see how that is implemented and what results are being prioritized.

Terry Gerton Exactly. And there’s one other piece here. The deliver results, but particularly by American. Do you feel like that’s getting more emphasis than it has in the past in this PMA?

Emily Murphy Absolutely. I think it’s, rebuild American industry through prioritizing and enhancing made-in-America execution. I’ll be curious to see what we actually mean by “made in America” versus — you’ve got buy America, you’ve gotten buy American, you’ve been made in America — and how they play out in the contracting process. There has been a lot more emphasis. When I was GSA Administrator, we launched the “Made in America bot” so that we could go through the schedules and quickly figure out where we had problems with incorrect labeling of Made in America. I want to make clear, it’s something that GSA and other agencies have always focused on in complying with the law, but to call that directly in the PMA suggests that there’s going to be an even greater focus on this.

The post Emily Murphy is here with her insights on how federal acquisition changed in 2025 and what’s coming in 2026 first appeared on Federal News Network.

Interview transcript

Terry Gerton Hottest topic I think is the NDAA on the Hill. It passed the House. What’s going on next?

Mitchell Miller Well, it’s going to the Senate and there are a few little tripwires in the overall, more than 3,000-page bill, but I think it is on its way to getting passed. This is something, as you well know, that is always passed every year for more than six decades, which is pretty rare in this sharply divided Congress. So there’s, you know, a lot of support for it broadly. I think obviously the 3.8 percent pay increase for military personnel. A lot of talk among the leadership related to acquisition and the reforms that are taking place related to that, that a lot of these weapon systems, basically there’s a concern among lawmakers that the Pentagon can’t obviously, you know — the metaphor is you can’t turn around an aircraft carrier very quickly. And similarly with acquisition, you can’t just adjust something super fast, but they have put in a lot of reforms that the lawmakers at least believe will allow the Pentagon to quickly react and create new weapon systems on a faster glide path than they currently are now.

Terry Gerton As people have been making their way through the 3,000 pages in the conference bill, there’s been some surprise about provisions that folks thought were home runs and got dropped as the bill went through conference.

Mitchell Miller Right, and one of them is the right to repair provision, which of course would allow people to basically, within units of the defense department, to fix their own equipment, which sounds pretty basic, but it would provide a lot of additional resources to do that. And everybody thought that was going to go through pretty easily, but for whatever reason it was pulled, and I think that has sent some shock waves through the contracting world as to why that is going to happen. I think that as we move into the next year we will probably see that looked at again. Certainly some things have been pulled or changed over the course of this whole NDAA process. And one of the side notes that came up this past week was the fact that they would basically allow for the Army to continue its helicopter flights near Reagan National Airport as they used to. They of course have been limited since that accident, terrible accident in January that killed 67 people in a midair collision involving an Army helicopter and a commercial jet liner. And there was a lot of furor last week among lawmakers related to — including this language that essentially says that the Army gets a buy on putting in the new communications systems that would allow for helicopters to be quickly identified, more quickly identified than on radar and that they could essentially potentially go back to the status quo. So I talked to Senator Mark Warner (D-Va.) and he says he’s going to reach out to the Pentagon to try to see if they can get that changed. But I don’t think these issues will jeopardize the overall NDAA. I think we can see that it will be passed this week.

Terry Gerton Well that will be progress at least to have one of those bills through, even with some of these outstanding issues. The other funding issue that’s certainly top of mind is whether or not we’re going to get a repeal on the ACA extensions. It failed in the Senate. Where does it go next?

Mitchell Miller Well, this is really interesting because, you know, during the whole debate over the government shutdown, they said, oh, we have plenty of time. We can deal with this later. It doesn’t happen until the end of the year, the subsidies going away from the ACA. Well, here we are. And we have not really gotten through any kind of progress. The Senate, as you mentioned, voted down two proposals, dueling proposals. One, the Democrats wanted to extend the ACA subsidies for three years. The Republicans came up with an alternative plan related to health savings accounts, which they say would provide more control for Americans over their own health care costs. And variations of those two themes are now being sorted out in the House. A lot of House moderates on the Republican side, frankly, are concerned that it’s going to look bad politically heading into the midterms if they don’t do anything related to this issue. So you have a really unique situation where this is such a big issue that you have people trying to essentially do an end run with discharge petitions in the House for the Republican leadership. Various proposals extending the ACA possibly two years with caps on how much people can make, various requirements related to cutting out fraud. So it’s going to be fascinating to see how all this unravels this week in the House. My personal thinking is that they are not going to get anything actually passed this week. And then we are going to, of course, head into the new year where you’re going to have more than 20 million people under those ACA provisions who will be seeing those soaring costs related to their health care premiums. So it’s pretty fascinating that Congress just was not able to do this, at least to this point.

Terry Gerton Mitchell Miller is Capitol Hill correspondent for WTOP. Mitchell, around that ACA issue, there was so much bad blood and mistrust throughout the shutdown. How is that impacting what’s got to happen next, which is appropriations bills?

Mitchell Miller You know, it’s really left a bad feeling on both sides, I think. And unfortunately that has impacted this whole appropriations process. You know, all year long we heard nothing but talk about, we want to get back to regular order. We’re going to pass all of these 12 bills. Well, here we are in December, and we only have three bills that have been passed in terms of those overall appropriations. So the thinking is, among several lawmakers including Senator Tim Kane (D-Va.), who I spoke to recently, is that maybe they can chip away, maybe they can find some more and put them in an omnibus. They were talking about possibly doing an omnibus before they take their break, but that is simply not going to happen. So now they’re looking at maybe January to potentially get another minibus, if you will, maybe get four or five of these major legislative packages through that way. But then we’re staring down the barrels once again of Jan. 30, the shutdown showdown. And I’ve talked to some lawmakers about that, and they said, yep, it’s going to be here before we know it. So they’re hoping at least to get some goodwill back in the appropriations process as they chip away, as I said, related to these other measures. On the other side, I will say that the House speaker, Mike Johnson (R-La.), was very happy to make the point recently that they will not have the overall huge omnibus that, as you know, they often have right before Christmas or right during the holidays where they have to get everything done. This has been something that the Republicans have been really pushing back on. They don’t want one of those big deals and they’re not going to get it because everything got pushed into 2026.

Terry Gerton Well, it sounds like some lawmakers might be getting coal in their Christmas stockings.

Mitchell Miller I think there will be a lot of coal in Christmas stockings this year.

Terry Gerton Mitchell, one of the other topics that comes to mind when you mention regular order is congressional oversight hearings. And there was a move towards oversight, especially regarding the boat strikes over the last week or so. What are you seeing there?

Mitchell Miller Well, I think it’s an interesting tale of two cities, if you will, or tale of two chambers. On the House side, you’ve got a lot of review that has been taking place within the House Armed Services Committee, but the chairman, Mike Rogers, essentially said he is satisfied with what he has seen related to the video of that so called ‘two tap’ strike. And then on the other side, on the Senate side, Roger Wicker (R-MS), the Republican chair of the Senate Armed Services Committee says, Well, I wanna see a little bit more. I wanna get all the lawmakers on the committee to actually see the whole video. So it’s interesting to see that little mini divide within the Republican Party. And then of course you have Democrats who are really calling for a lot more oversight, saying they have to look into this more, and of course that was exacerbated even more by the seizure of the tanker related to Venezuela. So there is a move, I think, among lawmakers to reassert some of the powers of the legislative branch, but we’ll have to see how much that moves forward.

Terry Gerton Well the judicial branch got involved last week as well. There was a Supreme Court hearing on Monday about whether or not Trump’s firing of an FTC commissioner was constitutional. And that has a lot of impact potentially for independent agencies. Any response there?

Mitchell Miller Yeah, there’s a lot of concern about it because it seems like, at least, particularly on the Democratic side, they feel that all of these independent panels are just slowly being taken away by various executive orders, and in this case in the Supreme Court order — decision. And there is a feeling that if this is allowed to continue, there really won’t be any more independent panels, that it will go back essentially to the spoil system that used to take place many years ago and they tried to wipe away all of this so that the politics didn’t get involved with all these panels and commissions and committees. And that’s why there is so much at stake to jump to the midterm elections, because right now there really isn’t going to be much oversight related to this on the Republican side. They feel like the president has the power, he is going to do what he wants. But if the House flips and goes to the Democrats, then I think you’re going to see a lot more oversight on issues just like this one, on issues like the one you spoke of related to the boat strikes. So that could really have a profound impact on what happens with Congress moving forward.

Terry Gerton Well, it doesn’t sound like we’ll get much of a break over the holiday season. There’s much to watch here as we go forward.

Mitchell Miller Lots of busy things happening here.

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Interview transcript

Terry Gerton You are involved with the National Electrical Manufacturers Association. We have heard a lot of talk about underemployment in the trades, the skilled trades, but NEMA makes the point that this kind of security, electrical security is like national security. Walk us through that argument and then we’ll talk about your specific programs.

Peter Ferrell NEMA — well, first let me introduce what NEMA is to your members. The Electrical Manufacturers Association represents about 300 or so companies, both large and small, that produce the equipment and components that go into many of other sectors throughout the economy, which include the energy sector, the defense industrial base, the water sector and others. Sectors that are really kind of, you know, on their own are important, but holistically really kind of make not just the economy function, but also our nation function holistically. And so our members from the grid side and the energy side make the components and the equipment that not only house — or excuse me — that power communities, that power warehouses, that power manufacturing facilities, but they also power defense applications from military bases and also provide the equipment for industrial military sector as well. So, you know, without those components, really there comes a gap for defense purposes and for energy purposes. And those two things of course are very interrelated. And so NEMA helps … Fill that gap with our manufacturers and the components and products they provide.

Terry Gerton What are the specific workforce challenges that you’re facing in the electrical manufacturing field?

Peter Ferrell So NEMA conducted a grid reliability study that was published at the start of this year. And it concluded that there were three main buckets of areas that were really driving energy demand. And this ties into your question, but for some context, with the growth of energy needs for remanufacturing purposes, for electrification purposes, for EV purposes, but also for AI and data center purposes, you know, there is this new demand for all of these products all of a sudden. And so, you know, to make those components, to make all of those things possible requires a very diverse and pretty skill-heavy workforce … And from a manufacturing perspective too, I want to just kind of emphasize it’s not just skills that involve, you know, folks’ hands in a factory — kind of that traditional old school way of looking at a manufacturing. A lot of manufacturing is automated, a lot of it’s connected systems … that require new age skills in terms of, you know, how do we scale manufacturing? And so the workforce needs in this area are very wide and very deep. And so we need folks that know how to wind coil, that can stack cores made out of electrical steel to make distribution transformers, a very kind of classic and traditional hands-on work, but we need folks that understand how to manage and operate industrial control systems, operational technologies, IT specialists, welders and other kind of more skilled, you would say, new age jobs. All of those things come together to form really what the modern manufacturing environment looks like. And so all of those jobs are very specialized and very unique, but really it’s kind of an all-of-the-above when it comes to the skill sets.

Terry Gerton And NEMA’s making the case that transitioning service members and veterans are an optimal target pool for you. Tell us about why you think that and what you’re doing to recruit them.

Peter Ferrell So right now NEMA is looking toward kind of implementing a program called, or pursuing a piece of legislation called, the Veterans Energy Transition Act or the Vets Act. And what it is is that it’s a piece of legislation, a bipartisan piece of legislation, that was introduced earlier this year by Representatives Jen Kiggins (R-Va.) And Chrissy Hoolihan (D-Pa.), both who are veterans themselves. And what it seeks to do is to really kind of bring the supply chain components of the energy supply chain to meet the workforce that veterans provide or that can provide. And so veterans have a lot of skills that they learn throughout their careers, especially lengthy careers, if they’ve been in for many decades. And so it’s a way of trying to, you know, seamlessly as possible, take the skill sets, whatever they may be, whether it’s in management, whether it’s in operations, whether it’s in logistics, just to name a few, and to bring those skills over to the energy sector to help meet the moment and fill the voids in those jobs and those many areas that I mentioned just a second ago. And so … We feel that veterans, of course, kind of play an important role and kind of have a really special element that they bring. They’re mission-driven, they’re team-driven. They look at things holistically ,but also, you know, in how they apply their skill sets. All of these things matter. And so for us, those kind of intangibles that kind of the military provides and, you know, develops and really instills — and not just workforce and values and things of that nature, but also in terms of how military service folks just view work, and kind of the meaning of work and why it’s important. We feel that that’s a very valuable intangible that, you know, when applied to the energy sector and to manufacturing, can really produce tremendous benefits, not just for the companies that hire them, but also for the communities that they’ll end up serving through the course of their work.

Terry Gerton I’m speaking with Peter Ferrell. He’s senior director of government relations at the National Electrical Manufacturers Association. We’ll come back to the legislation in a minute, but there are already a number of programs out there that have been put in place over the last couple of decades to support transitioning service members. There’s apprenticeships with unions in the industry you’re speaking of, right? Electrical apprenticeships and some of those. There’s Skillbridge, there’s transition programs from the veteran serving organizations and fellowships. Is NEMA engaged with those? And if you are, are they not working for you? Is that why you need legislation that proposes a new solution?

Peter Ferrell One of the organizations that NEMA is involved with is the Veterans Internship Providing Employment Readiness Program or the VIPER program. And … that program is focused mainly on trying to reduce suicides of folks that leave the military and then find themselves without the ability to kind of have any meaning in their life. And so really that program is meant to help marry up companies and folks who can employ veterans with those folks with those skill sets. So it’s a very complimentary kind of program to what the legislation is trying to do. But the legislation is proposed based on the folks at the Niskanen Center, which is a think tank here in Washington, D.C., identified not only that there was a workforce shortage to provide jobs in the energy sector, but that veterans provided really kind of this complimentary tool for it. But as you point out in your question, that there are many existing programs to help veterans prepare for the workforce. There’s the other side of that coin, which is how is it that we’re preparing companies to meet that workforce as they depart the service or, to help veterans who have already departed, or actually involve spouses in a way? So what this does is it’s an attempt to kind of incentivize and help companies meet veterans or transitioning folks where they are. Because it’s one thing to say, you know, a program has helped someone who’s transitioning out, learn how to build their resume, learn how to dress, learn how to conduct an interview, and then go to a job fair. But the question is, well, are the right jobs at that job fair? Where, you know, have there been incentives? Are they able to participate in those opportunities to meet those veterans? And so this bill would help kind of give the resources to especially small and medium-sized manufacturers that just make the right components and make the right pieces of equipment, but they just don’t have the budgets or the resources to really reach out to those members. This is really kind of, in a sense, helping, like I said, the other side of that coin — to help companies meet veterans where they are. And so, in a sense, [this] complements kind of the existing veterans transition programs like Skillbridge, like TAP, like Solid Start that are already on the books.

Terry Gerton In the interim then, while you’re working on the legislation with members of Congress, what do you want employers in this sector to know and what do you want transitioning service members and veterans to know? How can we bring them together while we’re waiting on the legislation?

Peter Ferrell Well again, there’s programs like the VIPER program, and to really kind of bang the drum around these issues and, you know, through great avenues through your program, for example, to let folks know that these things exist. I think … in some ways … there’s a lot of information out there and for a lot of folks it’s confusing. What do you listen to? You know, who are the best resources to rely on. And so really kind of emphasizing to not just employers, not just to manufacturers, but also to folks in this that do distribution and folks that are in the contracting world that, you know, there are a lot of companies that need this, that need this employment, that they’re good jobs, that they are, you know, in many ways, it’s the most American of things. It’s an American job that you’re getting, and they provide very well. And but there’s a need, and sometimes it’s a lack of just not knowing that these needs are out there. And so in the interim, getting the word out around the fact that the industry as a whole, from when a component is made, to how it gets delivered, to how it gets installed, all of those sectors need workers. But also that, you know, there’s 200,000 or so veterans that are leaving the service, retire for one reason or another about every single year. But, you know, according to statistics from VIPER, only about a quarter of those folks have jobs immediately after they leave the service. And so it’s, how do we ensure that folks are aware that there are willing participants that want to utilize the skills that have been developed over many years of service and to build upon those skills to, you know, help veterans or folks know that there is a place for a lot of those folks but making sure that they marry up and that one knows about the other and it’s making sure that that communication is out there.

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Terry Gerton You know, it turns out that not everything was shut down during the shutdown. The Department of Education issued a final regulation on Halloween that picked up on a March 7 executive order related to the public service loan forgiveness program. Tell us about what this new regulation does.

Randall Thomas That’s right, Terry. The regulations finalized proposed regulations that were issued in August and that implement that executive order. And that executive order directed Education to propose revisions to the PSLF regulations to ensure the definition of public service excludes organizations that engage in activities that have a substantial illegal purpose. That executive order stated that it was the policy of the administration that individuals employed by organizations whose activities have a substantial legal purpose shall not be eligible for the PSLF program. Education amended the regulations to provide that a qualifying employer for purposes of the program does not include organizations that engage in these specific enumerated activities in the regulation such that they have a substantial illegal purpose. Qualifying employers, for people who are familiar with the program or those who aren’t, generally include federal, state, local government agencies, Section 501(C)(3) organizations, and certain other entities. And these regulations were issued after … the PSLF statute was enacted in 2007 and first became effective in 2009. And those regulations have been amended seven times since they were first promulgated. The new regulations establish that to be considered a qualifying employer, an organization must not engage in an illegal activity such that it has substantial illegal purpose. And with that language and that standard, Education is effectively adopting the IRS’s illegality doctrine in these regulations. Education states that the IRS’ use of the doctrine is a basis for Education to issue the regulations. Education also listed several activities deemed to reflect a substantial illegal purpose, which we’ll probably cover in a few minutes, and the proposed regulations received nearly 14,000 comments [and] were generally finalized without substantive changes.

Terry Gerton I think most people would agree that agencies that are engaging in illegal behavior ought not to be subject to loan forgiveness. What is new about this regulation, especially when it comes to defining the illegal activities?

Randall Thomas Yeah, so historically, like we mentioned just a minute ago, Terry, this was a status test and not a conduct test by the Department of Education. You could look to a Section 501(C)(3) organization and see that the IRS had made a determination with respect to that exempt status. And the IRS separately employs an illegality doctrine, but now the Department of Education has said that it will also apply the illegality doctrine based on a preponderance of the evidence to determine whether an organization is operating for a substantial illegal purpose. And here they define certain illegal activities as indicative of having a substantial illegal purpose. Those activities were also all noted in the executive order from March of this year, and they include aiding or abetting violations of federal immigration laws, supporting terrorism, the use of puberty blockers or sex hormones for minors in violation of federal or state law, engaging in the trafficking of children to another state for purposes of emancipation from their lawful parents in a violation of federal or state law, engaging in a pattern of aiding and abetting illegal discrimination, and engaging in a pattern of violating state laws, which is defined as a final non-default judgment by a state court of trespassing, disorderly conduct, public nuisance, vandalism, or obstruction of highways.

Terry Gerton Well those are pretty specific. How will the Department of Education actually determine if an agency or an organization engages in those activities? What will they look at?

Randall Thomas So the employer disqualification process here requires Education to find that an employer has a substantial illegal purpose by a preponderance of the evidence after weighing the employer’s illegal conduct and narrowly focusing on only the illegal conduct enumerated in the regulation. The preamble to the regulation notes that a determination by Education regarding illegality only represents Education’s conclusion that the organization is not a qualifying employer and does not represent a determination by the IRS regarding tax exempt status. Education will determine that a qualifying employer violated the applicable standard when it receives an application in which the employer fails to certify that it did not participate in activities that have a substantial illegal purpose, or when it otherwise determines that a qualifying employer engaged in these activities unless Education approves a corrective plan signed by the employer. There’s an employer reconsideration process that gives employers the right to submit additional information and seek review and determinations. That process is aimed at providing due process to ensure that Education considers all relevant information prior to taking action to remove eligibility and to ensure that employers will be given an opportunity to respond, except in cases where there’s conclusive evidence that the employer engages in activities such that it has an illegal purpose, substantial legal purpose, rather. And Education presumes that the following evidence is conclusive. That includes a final judgment by a state or federal court whereby the employer is found to have engaged in illegal activities such that it has a substantial illegal purpose, a plea of guilty or no contest, whereby the employer admits to having engaged in illegal activities that have a substantial illegal purpose, or pleads no contest to allegations that it engaged in illegal activities with a substantial illegal purpose, or a settlement that includes admission by the employer that engaged in illegal activities that have a substantial illegal purpose. It provides that nothing in the determination process shall be construed to authorize Education to determine an employer has a substantial illegal purpose based upon the employer or its employees exercising their First Amendment rights or any other rights protected under the Constitution. And Education notes that even without such explicit references, the regulation could not be enforced in a manner that contravenes the First Amendment and that lawful activity will not disqualify an organization, no matter how controversial or unpopular it may be.

Terry Gerton I’m speaking with Randall Thomas. He’s a partner at Morgan, Lewis and Bockius. All right, that’s a lot of legal speak about the requirements. What if any new responsibilities or risks does this create for the public service organizations who might have borrowers participating in the program?

Randall Thomas Yeah, so two impacts here, the qualifying employers and also the borrowers, of course. The employers now bear the responsibility of affirmatively certifying that they are not engaged in activities with a substantial illegal purpose. They face disqualification now based on this new preponderance of the evidence standard, and certain things like judgments, no contest pleas, and settlements are treated as conclusive evidence that the employer engages in activities such that it has a substantial illegal purpose. Employers will want to engage counsel to think about how the PSLF regulations may apply and whether the employer’s activities expose it to any PSLF disqualification risk under the new regulations. And, you know, you probably want to do that with an eye toward these activities that the regulations say are indicative of a substantial legal purpose. There’s also the borrower impact, and thankfully these regulations don’t have an effective date until July 1, 2026. So you do have some headway — runway to figure out how they’re going to apply to your employer. For borrowers, the regulations will remove PSLF eligibility for individual borrowers during periods of employment by organizations that have been disqualified. Where an employer is deemed to have engaged in activities that breach federal or state law, affected borrowers won’t receive credit toward loan forgiveness for months worked after the determination date of ineligibility, but borrowers will receive full credit for work performed until the effective date of Education’s determination that the employer no longer qualifies. And under the regulations, Education is required to notify borrowers of a qualifying employer’s status. If the qualifying employer is at risk of becoming or becomes ineligible to participate in a PSLF program, the borrower cannot request reconsideration of a determination by Education that resulted in the employer losing status because the employer has a substantial illegal purpose.

Terry Gerton Are any of these new regulations being tested in legal cases?

Randall Thomas There are several cases that have been filed so far challenging the regulation.

Terry Gerton And what is the status of any of those? Can you derive any sense of where this might go in the future?

Randall Thomas I can’t opine right now. I don’t think that any — well, I think that it’s too premature. These regulations were just finalized a little bit over three weeks ago. And I don’t know that there’s been any action on these cases.

Terry Gerton What do you think this signals for the future then of the Public Service Loan Forgiveness Program? Do you think the authorities will continue to be tightened and the eligibility requirements strengthened?

Randall Thomas Yeah, Terry, I have no expectation about whether they will or won’t be tightened any further, but the new rule is clearly designed to tighten PSLF standards, and the administration through the executive order and Education in the preamble to the regulations, they say as much. The preamble to the regulation discusses at length the aim of the regulation in ensuring that taxpayer dollars are not misused and strengthening accountability and enhancing program integrity. The preamble states that the regulations will protect hardworking taxpayers from shouldering the cost of improper subsidies granted employees of organizations that undermine national security — and I’m quoting the regulation here — and American values through criminal activity. I can’t speak to the policy or the balance between accountability and access to forgiveness. I will note that Education notes in the preamble to the regulation that it disagrees with [the] assertion that the rule will have a significant macroeconomic effect on labor markets in education, health care, social services. They stated that they found no basis to conclude widespread effects would be likely and that they expected most organizations to voluntarily comply with the rule, such that Education anticipates that it will take action to remove eligibility for less than 10 organizations per year.

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Terry Gerton It has been a tough year for the federal workforce. I don’t think that’s an understatement, but here on the Federal Drive, we focused a lot on the impacts on individuals. And with you I want to take it up a level and really talk about leaders and managers. What have been the biggest challenges for federal managers throughout this year?

Laurin Parthemos I would say without a doubt, it’s the uncertainty that people are seeing within the day to day. As a leader, having to navigate a field where you don’t know what is going to come next is increasingly difficult, especially in times where you don’t have necessarily the number of resources that you truly need to get the job done. And we’re seeing that really play out in terms of both performance, in terms of how things are getting produced, how quickly they’re getting produced, but also just on the health from a psychological standpoint of the individual employees that are within the workforce and especially on the federal side. And how do we really make sure that we create, as leaders, a space where we can allow them to thrive as much as possible in this particular scenario? And how do we suppress that survive response to all the uncertainty and all of the nuance that is happening in the day to day that we’re seeing?

Terry Gerton We have talked a lot here about organizational health and how organizational health depends on individual worker health and how that health often depends on mental health. Seems like all of those connection points are under a lot of stress.

Laurin Parthemos I, Yeah, unequivocally agree with that. Realistically speaking, at Kotter, our research validates that point that organizations that are anchored in adaptability and resilience are those ones that outperform. And as we see, especially in the federal space, it’s difficult to build that resiliency consistently because of the amount of uncertainty that we’re seeing. And so because there’s that pull dragging people down, the level of anxiety, the lack of ability to actually meet your day to day needs as we’re seeing shutdowns happen, there’s an end-level performance there that’s happening at the department and agency level that as leaders, it’s [about] trying to figure out how we can give as much stability as possible to our teams without necessarily knowing what we’re capable of promising. And how do we make sure that we’re communicating in a way that we’re not just waiting until we have a definitive answer, but we’re walking alongside our team saying, I also don’t know. But here’s what we’re going to do.

Terry Gerton You mentioned a term earlier, psychological safety. Can you break that out for us and tell us what it means both from the employee perspective and the leader-manager perspective?

Laurin Parthemos Absolutely. From that psychological safety perspective, we see the massive erosion in the sense that as people are showing up to work, what was once seen as an incredibly stable job and a mission-driven job working for the federal workforce. Some of those tenets about why people joined the service are no longer there because that stability is no longer there. Don’t know if layoffs are coming. We don’t know if we’ll be in another shutdown. And what that really boils down to is how do I feed my family? How do I make sure that I can pay my own bills? And without that level of safety, of knowing that I have stability in my job and I can think through how do I perform and I can think through creative, innovative ways to get things done. Without that, you won’t see any level of performance. And it’s really been a sticking point for many people that I’ve been speaking to within the agencies.

Terry Gerton  Are you seeing that agencies have groups of employees maybe pitted against each other? We had furloughed and accepted folks. So many people worked but without pay and others didn’t work and, you know, are there internal issues that leaders and managers are going to need to deal with?

Laurin Parthemos None that anyone has openly admitted to me. I will leave it at that. But it is a natural feeling to say, if we’re working on a skeleton crew, so to speak, and some of our team is furloughed while others are not, what does that look like when we all rejoin together? There’s going to be those who are frustrated because they’ve had to work so hard during that furlough time without pay. There’s those that are — that were not furloughed that had to depend on each other that maybe their teammates weren’t showing up in a way that they necessarily resonated with because they might not have been giving their full selves because of the frustration of what they were dealing with. So I wouldn’t say it’s necessarily that people are pitted against each other, but more so that there’s an understandable level of frustration given the ecosystem that they were subjected to. And how do you work through that as a leader saying, for this time, we are all together. There is a potential that we will be in another shutdown. And what does that look like? And how can you really work with your team to make sure that you’re front-running any of those issues and thinking through the scenario planning to make sure that you have what you need and your team members understand the purpose and what we’re really trying to accomplish at its core so you can prevent any of those frustrations as they bubble up.

Terry Gerton I’m speaking with Laurin Parthemos. She’s a principal and public sector lead at Kotter. Laurin, the shutdown has come up a couple of times in our conversation. We’re deep into the holiday season that comes with its own kind of stress. And when everybody’s sort of fully back in January, they’ll be staring potentially at another shutdown across several agencies. So if you’re a leader in this scenario, maybe what’s on your New Year’s resolution list to think about how do you reset for the work beginning in January?

Laurin Parthemos I think that’s a great question because as I’ve talked to many leaders throughout this time, a lot of people are talking through what does Q1 look like or what does it immediately look like for what I need to accomplish? But we really need to be thinking longer term than that. And we really need to be thinking through what are our priorities and what are we deprioritizing? Because as we think about the impact that the shutdown had, I believe it was the Professional Services Council that has a statistic that it takes three to five days, not business days, but days to reset for each day of shutdown in terms of an agency’s performance, considering that it was 43 days. That’s up to seven months in order to get back to a stable state. So we’re going to be working in an environment that is over capacity and behind with significant backlog. So making sure that if you’re anchoring on a, why are we doing what we do, what is our goal as a team and anchoring each task underneath that to that why, it will help prioritize what needs to be accomplished while simultaneously actively advocating for what no longer needs to be done during this time of prioritization. And that act of advocating needs to happen within your own team. Across teams and also going up the chain as well to make sure that there’s a consistent understanding of what are we trying to accomplish? Because if you only focus on one small group, there’s going to be a lack of understanding more broadly. And that will help teams as they go into January with the potential of another shutdown. So knowing what are we trying to accomplish, what happens if we do, what happens if we do not shut down? And how can we come together to make sure that despite the headwinds, we are going to accomplish whatever we can. And I will say a key for this is it’s not just the priorities that we need to accomplish, but it’s also how do we, as leaders, implant short-term wins, as we like to call them at Kotter. So what are some small things to show that we’ve accomplished something? We’ve been successful. No matter how big or small, it does not matter, but it’s something that you can celebrate around and rally around to get people energized. So it’s not just a heavy weight of a continual backlog, but saying we did something and we’re making progress.

Terry Gerton  What might be one or two things that a team leader or a mid-level manager could actually do to get their team refocused on the why, on the priorities, on the outcomes? Should they have a potluck? Should they like have a team day? What are some things that you recommend, actual steps?

Laurin Parthemos What I would say is it’s very team dependent, to be quite honest with you, because you could say, let’s do a pizza party. And that will resonate so well with some groups, and others will see it as tone-deaf in a way, saying, that’s great that there’s food here, but do you not see what’s happening around us? And so I would say, first and foremost, as you’re thinking about the state that individuals are in, it’s that heavy survive of freeze, likely. And it’s making sure that as you think through what state these individuals are in, you’re going on a listening tour, so to speak, to figure out what they actually need and want and then respond in kind to the culture of that particular group. So it very much could be a potluck. It could be that part of your planning as you’re thinking about going into January, you know your team will have heavy amounts of furloughs. And realistically speaking, the median federal employee only has about a week of pay in their bank account. So is it that we know this team is going to be furloughed? So let’s think about meal trains. Let’s think about how we can support each other in ways that are not just from a work perspective, but from a human element, because we are here for a mission. You’re not joining the federal service to become the most rich and famous. You’re doing it because you believe in the cause. So come together around that cause and find ways to truly support your people in the ways that you’ve find that they need to be supported as a leader.

Terry Gerton  I’ve been speaking with Laurin Parthemos. She’s a principal and public sector lead at Kotter. Laurin, thanks so much for grounding us back in what’s really important. Absolutely. Thank you for having me. We’ll post this interview at federal newsnetwork.com slash Federal Drive. Listen to the Federal Drive on your schedule and on your device. Subscribe wherever you get your podcast.

 

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Interview transcript

Terry Gerton We’re going to talk about the National Defense Authorization Act. It’s in its final stages. It’s not a short read, 3100 pages. But there’s a lot of particular detail in there, especially around changes to cost and pricing rules. Start kind of at the headline level. What’s the big news that you want people to know?

Zach Prince Sure. So we’re still digesting this. So, you know, I wanna caveat that, you know, it is 3,100 pages and there’s a lot here, and it might not become final. But I think Congress has been listening while industry over the past many years has been saying that they’re reluctant to invest too heavily in defense when Congress makes programs subject to annual appropriations that might, for seemingly no apparent reason, go away after major investments have been made, when huge regulatory burdens can get imposed, like the cost accounting standards, which deviate substantially from generally accepted accounting principles or GAP, and things like certified cost of pricing data are required and just a slew of regulatory requirements that come with doing business with the government. These are real burdens to industry and real burdens to investors thinking about getting involved in the space. So listening to all of that, Congress took quite a bit of action in this NDAA.

Terry Gerton Let’s talk about some of those. You mentioned cost accounting standards. One of the biggest shifts is bumping that threshold from $50 million to $100 million. Who does that help? And what kind of burden does it remove?

Zach Prince So just as a bit of background, the cost accounting standards are accounting rules that apply to certain contractors, contractors that have contracts over size thresholds when otherwise exemptions don’t apply. They were imposed starting in the late ’60s, an effort spearheaded by the late Admiral Rickover and this I think mistaken belief that contractors were using accounting practices to get something over on the taxpayer. And so all these rules mostly came into effect in the ’70s and have stayed essentially the exact same since then, with some slight tweaks around the edges. But they deviate substantially from the accounting practices that most companies would otherwise have implemented. So they require really sweeping shifts in the way that you do a lot of your basic accounting as a company, and they apply on a contract by contract basis. So you might only have one or two contracts that are subject to CAS as opposed to your general gap rules. But because it’s very challenging to have two different sets of books and records, you might just have to implement these very annoying onerous rules across your entire organization, at least across your segment. I don’t want to go too far into the weeds. There’s a lot of complication here. It’s a burden and It doesn’t apply to small businesses, but it does apply to quite a lot of companies that would have large government contracts. And companies don’t want to trigger the threshold that gets them into CAS-covered contract performance because of the burden.

Terry Gerton And so by raising it to a $100 million, more folks will not have to worry about that conversion, right?

Zach Prince Yeah, that’s right. But the — I’d say the bigger item here that’s kind of buried, and if you look at the congressional report that they issued from the conference, it kind of ignores this, even though I think it’s a much bigger deal. It raises the exemption floor. So there are two different types of CAS coverage. There’s modified CAS coverage and there’s full CAS coverage. The full is the much more onerous one, but a contract is entirely exempt from CAS, full and modified if it’s below certain dollar threshold. So the $100 million, formerly $50 million, that’s for full CAS. But a contract is totally exempt from CAS no matter what under the previous rules, if it was below $2 million or $2.5 Million, with the threshold changed. Now they’re raising that to $35 million. So huge, huge difference. And it makes a difference not just for modified CAS, but also for full CAS, because full CAS coverage is triggered by either a single contract of $100 million or greater, or net $100 million in the prior cost accounting period. So if you had $200 million in contracts in the prior year, none of which exceeded $35 million under this new regime, you still are not going to have a contract subject to full CAS. So I don’t know what the numbers exactly are in terms of impacted contractors, but I have to imagine that this is gonna exempt. A whole slew of contracts that previously would have been subject to CAS.

Terry Gerton I’m speaking with Zach Prince. He’s a partner at Haynes Boone. So some people may be wiping their brow and thinking they’re gonna get a reprieve here. But Congress has asked for a report on how many of these changes are gonna play out. What would success look like? What do you think they’re hoping the impact of some of these changes will be?

Zach Prince So I think that they’re hoping this is going to spur greater investment, particularly by successful commercial technology companies and by successful investors in the defense space and particularly cutting edge defense tech. If you look at the multi-year appropriation provisions that are part of this NDAA, I mean they touch on some of the really interesting and important areas for advancement, like material composition issues, hypersonics, things along those lines, autonomous programs of various sorts, that we really are concerned that we could lose an edge to competitors overseas and that there needs to be substantial private sector money to go into because there needs to be huge scientific breakthroughs and that stuff’s costly.

Terry Gerton Tell us a little bit more about the multi year provision because you mentioned up front that companies are reluctant to invest if they’re gonna be on an annual appropriation cycle.

Zach Prince Yeah, and we’ll see how some of this plays out. But I think we all are familiar with major defense programs over the years that have been abruptly cut back for various reasons. But if you look at the Zumwalt class destroyer, for example, where there was a huge buy that was initially authorized and that was then cut back, which of course means that suddenly the R and D costs that were distributed over, say 20 ships, are now bunched into three or four. And now the program looks like it costs way more than initially was planned on a ship by ship basis, which technically is true, but is not really true overall and it results in scrutiny and program cancelation. So yeah, I think from my experience talking to folks in the private sector, they hear about programs like that where there’ve been huge investments that things are then abruptly cut, and they don’t want to get involved in the ecosystem that has those problems. And they know that, especially recently, when we’ve got CR after CR, you can’t rely on Congress necessarily to provide funding in a timely fashion, even for pretty important programs.

Terry Gerton There’s another newsy bit in here. You and I talk quite a bit about contract protests. There’s a provision that allows DoD to withhold payments during protests. Spin that out for us a bit.

Zach Prince Yeah, this is one that I’ve been watching pretty closely for a while, and we’ll see how it plays out, but there’s been a concern I continue to maintain that this concern is not supported by the data, but concern that incumbent contractors will protest at GAO, which has a mandatory stay that kicks in, in order to take advantage of a bridge contract that might be issued. Then the government says, Okay, well, you’ve lost the contract, but you’re still doing the work, we need the work to continue. We can’t go ahead and override the stay without some scrutiny. So we’ll just give you a 100-day bridge contract while this plays out. You’ll get whatever revenues you’re gonna get from that period, and continue. You know, I do think that this is a non-issue. it ignores the fact that protests are very expensive. The revenues you might get over a 100-day period are really not particularly significant in the grand scheme of things, especially when you’re irritating your customer. The data don’t show that this is abused very much, other than the idea that incumbents do protest more, but they also win more, which suggests that they’re in a better position to know when their problems in a procurement. But set all that aside, DOD in prior years has said, Well, Congress, we can’t require disgorgement of profits for these bridge contracts, which is what Congress had considered before as something that might remedy the situation because we don’t track the data. How do you calculate what a profit is for this period of time? So in response, Congress has come back and said, okay, so we’re just going to authorize contracting officers to withhold payments, period, under these bridge contracts up to 5 percent of total amounts that would be owed, and that those amounts up to that 5 percent threshold, which I think they established because it’s a rough order of magnitude of what profits might be, that could be deemed forfeit if there’s a decision ultimately that the protest lacked any legal or factual basis. So there are a lot of terms here that are gonna need careful definition and a lot of uncertainty of who’s implementing this, how you’ll challenge it, where you’ll challenge it. I mean, I think that this is a can of worms to address a problem that’s not real, but nonetheless, this is this is what Congress ended up doing.

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Interview transcript

Terry Gerton Deloitte’s got a new report out that suggests that inefficiencies and mission support functions are diverting resources from war fighting. Can you start by walking us through the central argument there? How do you connect those dots?

Tom Muir Sure, it’s a great topic, and certainly one that’s timely, not just for the Department of War, but other federal agencies. We think we’re at a unique point in time for government agencies, particularly with artificial intelligence, machine learning, an empowered and upskilled workforce to deliver on the promise of back office services. We won’t call them back office services in this report. We call them mission support services. Because at least when they’re the Department of War, Department of Defense, it is absolutely critical that they make the most of their budget and their priorities to focus on the mission of the department and the priorities to meet the national defense strategy and to enable our national security. We think we have a unique period of time for the department to deliver at speed and scale. They’re doing this in their mission. Secretary Hegseth talked about this about a week ago about acquisition transformation. And they can do that, take that same approach to mission support services that enable the mission of war fighters, improves readiness, enables the department to do their mission, and from an employee perspective, improves the ability of employees to leverage new technologies to deliver on their tasks in support of the mission.

Terry Gerton So you and I both spent some time wandering the halls of the Pentagon on the OSD stack. Many enterprise reform efforts have failed or come up short when it comes to being deployed in DOD. Talk us through some of the cultural difficulties and the organizational difficulties in doing this kind of reform.

Tom Muir Well, as you and your listeners know well, the department is budgeted and funded through appropriations under Title X, right? Military departments are funded to drive the performance of their military departments aligned with Department of War, Department of Defense priorities and national defense strategy. So part of the budget process would argue against this, but in order for them to achieve the efficiencies and effectiveness that the department needs to drive its mission capabilities, there’s a consolidation that’s critical for them to achieve that speed and skill we talked about earlier. We think that this is a unique opportunity because for the first time in, at least in my experience working in the Pentagon and agency supporting the Pentagon, they have a number of private sector leaders that are present in key leadership positions across the Department of War and Department of Defense that this be this is second nature to them. Improving performance, delivering on customer experience, reducing costs, recapitalization and empowering and upskilling the workforce is what they have done in private sector. And they’re bringing that same experience and insights to their government positions now inside the Pentagon. So we think because of technology, leadership and the current environment of cost savings and delivery on mission, this is the right time to have this conversation.

Terry Gerton People have said for years that Fortune 100 global companies can do this and are incentivized to do this, but the military operates under different constraints. So all of those private sector folks sometimes run up against some real obstacles in the military. What are some of the lessons that you think from the corporate world get that can realistically be applied inside DoD?

Tom Muir That’s a great point. You know, we cannot expect to apply all the lessons from private sector to the Department of Defense or Department of War. It’s just, it — particularly not carte blanche. It is a unique mission. It is critical to our national security. It is critical to our economic security globally. And so the Deloitte team has significant experience throughout the years working with Fortune 100 companies to stand up technology-driven multifunctional back offices. So this brings together HR, IT, finance, and acquisition of the four that we’ve specifically focused on in terms of our mission support services in this paper. And our work in private sector, we enable that consolidation, centralization, and mission focus of these cross-functional teams. Many agencies in private sector or companies in private sector call this a global business service. We tend to refer to it in Deloitte as sort of a center office concept, not a back office, because these offices and functions are critical to the mission of the performance of government agencies. For the private sector, we call them business units. Critical in the performance of business units, lowering cost, driving efficiencies, delivering on profit and loss statements to enable shareholder interest. In government, we think it’s more critical. It’s delivering on mission. This is not just about cost effectiveness and performance and efficiencies, it’s delivering on mission.

Terry Gerton I’m speaking with Tom Muir, he’s a specialist executive with Deloitte. So Tom, one of the big recommendations in your report is that all of this can be AI enabled, taking an AI-first approach. Talk us through how that would work. Is that sort of a way to bridge what kind of have been long running cultural differences between the services and the DOD staff? And what safeguards need to be in place if you’re going to deploy AI in a defense sector?

Tom Muir That’s a great question. You know, the Department of Defense is accelerating the adoption of advanced AI right now and machine learning in support of military capabilities to address their national security challenges. That same approach applies for these functional areas of HR, IT, finance, and contracting. Many of us employ AI routinely in our daily lives, and the workforce ought to be able to employ AI in their workforce lives to deliver on mission. We think AI can immediately apply to a wide range of DoD missions. But when we think about AI to improve audit readiness, right? The Department of Defense is under a statutory requirement to get a clean audit by December of 2028. And the Department truthfully has struggled with that remediation projects over the previous years. There’s a unique ability right now with the technologies available in AI and machine learning to drive that audit readiness, audit remediation, enterprise data management, acquisition of common goods and services at a lower cost point, at greater efficiency and greater performance. There’s an ability for them to gain significant momentum in some of these projects that they’ve already undertaken and pilots that they have advanced for the use of AI and ML technologies and deliver those tools to their workforce and upskill this workforce to use those tools to deliver better performance. We think we’re at a unique point, rather, for our agencies to do this within the Department of Defense, within the Pentagon.

Terry Gerton So Tom, I looked at the back of the report and there’s a ‘what DOD can do today’ page and I thought we could have pulled this from 1990 or 2000 or 2010 or 2020. What makes today’s environment different where Deloitte thinks that this is actually achievable?

Tom Muir The delight team has taken this approach, particularly with the Department of War, Department of Defense, because we think it’s based on three things. The first is, it is a tech forward approach to solving some of these pervasive problems that you and I just talked about, Terry, that have been very difficult for government agencies to move forward over decades. Right? We’ve done a bunch of shared services initiatives that have not gotten the department very far, not just the Department of War, Department of Defense, but other agencies as well across the federal government. We think there’s a second piece to this, and that is it’s a show not tell. We think there’s an ability for AI and ML to deliver to workers and workforce to not study the problem, but to demonstrate very rapidly in matters of weeks and months, not six months to a year, and implement technologies and, as you mentioned earlier, safeguard those technologies, right? There’s a cybersecurity discussion and an ethical use of AI discussion to this to this challenge. And we think the department is putting together policies that do just that. And the third piece is focus on outcomes, not processes, not business processes, but transforming business processes to deliver outcomes for the war fighter in the Department of Defense, Department of War’s discussions. But for other agencies, it’s deliver outcomes for their departments, agencies and bureaus. In business, it’d be deliver, you know, outcomes for the business units and profit and loss statements. That same discussion applies just to the bureaus and the agencies across the federal government.

Terry Gerton So let’s assume that DoD takes Deloitte’s recommendations and moves out on them and implements them. Five or 10 years down the road, what would look different and how would you measure or demonstrate that the efficiencies have actually improved readiness?

Tom Muir The great question. You know, in our minds, at least as we discuss this amongst our teams and as we share this with our clients in the Pentagon and in other federal agencies, we think looking back, right, 10 years from now, what does success look like? We think success is a consolidated mission support focused organization that delivers and manages standardized processes at speed and scale, leveraging technology to upskill the workforce, to allow them to live, to focus on cost and performance. We think when you look at the memorandums and the guidance that has come out recently from the Pentagon about recapitalization of the workforce, about acquisition transformation, it’s about delivery of the skill necessary to defend our nation, to deter threats and defeat them if necessary. We think that that’s critical when you look back, you know, from where we are today to that journey that they’re gonna undertake. And they’ve already taken many actions that’ve already begun. As you and I, who both worked in the Pentagon together, many of these actions are already in place. It’s just a matter of bringing that capacity and a consolidated, multifunctional mission support organization that allows them to deliver on the mission of supporting war fighters more effectively, more efficiently, at higher performance and lower cost. And then those cost savings can be put into critical capabilities necessary for war fighters at the front lines.

Terry Gerton How much of this can DoD do on its own without asking permission from Congress and how much does Congress officially need to support?

Tom Muir I believe that the Department has had an ongoing conversation with Congress, you know, particularly the oversight committees, both the HASC and the SASC in particular, and the appropriations committees on their outcomes that they’re looking to achieve by their transformation plans. We saw the first one just brought forward by the secretary of war last week. Secretary Hegseth discussed where he thought the department needed to move with acquisition transformation. I think we’re starting to see more of those in terms of direct report program portfolio management offices and how the department is tackling some of these large national security challenges. That dialog is ongoing. I think the department can do all of this within its budget and take that budget and put it back towards war fighting missions, right? The cost savings that come from this multifunctional shared service delivery services in support of their mission can be put towards that frontline war fighting mission. So I think that this is savings to the department that they can then put against mission and delivery for war fighters.

The post Can fixing the Pentagon’s back office make the front lines stronger? first appeared on Federal News Network.

Interview transcript

Terry Gerton We’re gonna talk about military supply chain and logistics. A lot of defense leaders are still warning that supply chains are fragile despite some modernization, despite post pandemic recovery. From your perspective, how can AI play a role in building the resilience of those defense supply chains?

Jon Garrity I think AI plays a critical role. And the reason is that supply chains are intrinsically very complex. There’s a lot of information. It’s hard to grapple with all of it. You have end users who have some visibility into what they might have at a Ford supply point. And you’ve got the manufacturers who are receiving signals from higher level commands and from headquarters. And there’s a lot of latency between those different points of signal. And so AI presents an opportunity to effectively coordinate and orchestrate across that supply network, optimize decisions on everything from purchasing to stocking to mobilization, transportation, all different elements of supply chain logistics operations. So it really is a new paradigm the way that supply chain logistics can be orchestrated.

Terry Gerton The Defense Logistics Agency tells us that they’re now rounding dozens of AI models to monitor supplier risk and to forecast disruptions. When you think about the options out there, what do you think the most promising AI-driven approaches are to identifying vulnerabilities early and fixing them before they become problems?

Jon Garrity So a lot of the traditional approaches to using machine learning and supply chain applications come into things like demand forecasting or identifying patterns in the data. And obviously the zeitgeist now is all around large language models and how those can be applied. But the challenge is when you look at the initial attempts, you know, you’re focused on a very small set or subset of the logistics enterprise, which again could be demand forecasting, but that’s just a piece of the puzzle. And on the flip side, you have these very general models like a large language model that can answer very general questions in incredible ways. But they aren’t grounded in the realities of supply chain. They don’t have ways to reason over or optimize over such a large-scale system. So the the new opportunity and one we’re focused at with Tagup is building a world model, it’s called. So basically providing structure such that you can reason effectively over these large scale systems, right? What is the relationship between the receipt of materials and the the use of those materials, of transportation from a manufacturer and expiration of material downrange, right? Hard questions to reason about at scale for humans and even for legacy approaches. But now with these world models, you can effectively reason at that scale.

Terry Gerton We’re talking about supply chain here, but we’re also hearing from the Air Force and the Army who are investing heavily in AI-enabled predictive maintenance to cut down on downtime and improve readiness. How do predictive analytics, sort of like what you were just talking about, your world model and supply chain, how can that apply to traditional maintenance models?

Jon Garrity Yeah, very directly. So predicting a specific component failure on a specific asset is is very difficult, right? Even if you have it very well instrumented, it’s a hard problem. But it’s a useful demand signal. And certainly when you aggregate it over a fleet, you can get very high levels of accuracy and understanding, okay, in aggregate, how many replacement transmissions will we need for this program, right? As an example. And the reason is it’s it’s similar to you know picking stocks. It’s hard to pick the one stock that’s going to get you 100x returns. So you buy a portfolio and you’re going to have one that’s going to give you that high return. Similarly, if you have a fleet of vehicles or or a fleet of aircraft, you don’t know which one is going to have that catastrophic engine failure, but you know across the fleet that prediction that of that event will occur with some level of certainty, and that can inform upstream in the world model what decisions are being made. So, in short, it’s a very useful input to the overall optimization, but it’s just a piece of the puzzle.

Terry Gerton When you think about the array of military equipment, I mean everything from water filtration units to F-35s and aircraft carriers, how complicated is it to scale an AI model to cover that scope of inventory?

Jon Garrity Yeah, great question. The answer is that there are, regardless of what asset or platform you’re looking at, there’s a lot of commonality, right? They all have parts that are installed on them, the replacement parts, they have distribution around the world, they have certain patterns of utilization, maintenance requirements. So the world model can encode these basic rules that relate these elements and then can take the data that exists today. And I think that’s a big, big opportunity, right? When you look even at predictive maintenance, there’s so much data that exists in existing IT systems related to service requests, parts required, requisition, all kinds of things. And there’s a lot of signal in it. But to employ that signal effectively, you need to be able to provide that structure. And so in short, in spite of the scale, it actually is the strength for these AI models, because if you can apply that structure, the models can get better much faster because of the scale of the enterprise. So that’s that’s the opportunity with that scale.

Terry Gerton I’m speaking with John Garrity. He’s the founder of Tagup Inc. One more maintenance question just because maintenance is near and dear to my heart. Congress and DOD are pushing right to repair provisions to let service members fix their own equipment using digital manuals and 3-D printing. How do you see AI intersecting with that approach?

Jon Garrity In a couple of important ways, right? One we’re we’re looking at now is changing the way that you — so take 3-D printers as an example. Where do you put 3-D printers? Right. There are now platforms where they have 3-D printers and containers, that can be moved around the world. But where should you put those sources of supply, right? And so if you have data from maintainers as to what parts are required, you can ensure that, via an optimization, you locate the sources of supply, the advanced manufacturing, other capabilities close to the point of use. And so I think that’s one way that AI will improve the maintainer experience is making sure they have the tools and the parts that are necessary closer to the point of use and and basically ultimately reduce non-mission capable rates due to supply and and and maintenance.

Terry Gerton Okay, let’s take one step back from the military units themselves and talk about manufacturing capacity. Companies are using AI and advanced manufacturing to compress production timelines and reduce parts counts. How do you see these technologies then changing surge capacity, industrial base opportunities? Sort of, what’s next on the front there?

Jon Garrity And actually I think it is intimately tied in with military as the ultimate customer, right? What’s what’s critical is avoiding whiplash effect and having visibility upstream so that manufacturers have access to what demands are they and how can they be satisfied. And I think the opportunity is and it’s coming to play now where if you can track use of equipment, of parts at the tip of the spear, you know, downrange and provide visibility back to the manufacturers across the enterprise. Now the OEMs, the manufacturers, can understand how their equipment that they manufacture is being used, where it’s being used, where there are issues, and that can inform their investments. if you could — right now the purchasing for these programs is done in the current fiscal year, right? There’s not visibility over many years into the future. That’s a huge lost opportunity, both for negotiating better prices with the manufacturing base, but also ensuring that the capacity exists into the future. So I think that’s one of the most exciting opportunities for these sorts of systems at scale is giving visibility to the manufacturers as to what are the demands in out years.

Terry Gerton And that seems to take us right back to where we started, which was with supply chains and making sure that not only the military supply chain, but the commercial supply chain stays safe, secure, predictable.

Jon Garrity [The] most interesting applications in my view of these new AI systems is the ability to identify systematically what links in the supply chain provide the most risk against readiness or other operational requirements. And so you can be very systematic in identifying, okay, how can we store up capacity or ensure that we have redundancy and supply to avoid getting just hammered on our readiness rates. And I think that’s one of the, again, the ultimate aim, in my view, from these sorts of systems is to be able to tie tactical use of the end users, aggregated at its scale, and provide that visibility and signal back to the industrial base all the way back to the supply chain. And by doing that, we can strip out a lot of the inefficiency in the system and drive higher quality service to the end customer.

Terry Gerton Real time decision making inside the system that you just described has always been sort of the holy grail of military logistics. As you think about the future of integrating AI into each of those pieces and parts, are there any concerns that you have about the cultural obstacles or individual training obstacles that might make it difficult to optimize the value?

Jon Garrity I think there’s been — it’s certainly a paradigm shift in sort of the user experience, right? So yeah, I’m sure you’ve long, history and experience, Terry, in military logistics and and in the private sector too. You know, ERP systems have been with us for many years, right? Enterprise resource planning systems, they track what we have and where we have them. And you know, you have to know a lot of different codes and keyboard shortcuts to be able to efficiently navigate these systems and then ultimately, you know, you put those into reports that you can summarize up to your commanding officers. And what’s changing now is that, as you’ve maybe seen with ChatGPT related technologies, now you can you can just ask questions directly and get answers. The challenge of course, operationalizing those for defense applications and supply chain is grounding it in the reality of the situation, making sure you you’re not hallucinating, right? You can’t just ask chat GPT for docking policies. So there there is risk that needs to be mitigated to make sure, and that’s something we provide explicitly by providing that structure in the world model that you can make sure that the answers you’re getting, the COAs that are recommended are grounded in reality. But I do think there’s going to be a bit of a learning curve that I think will be tempered by the fact that a lot of people are using large language models now. There’s a familiarity in private use with these sorts of technologies. I think in many ways it will be a more intuitive user experience, but it will be a transition from the historical way of interacting with IT systems and log IT systems specifically.

The post AI is stepping into the fight for supply chain resilience and battlefield readiness first appeared on Federal News Network.

Terry Gerton You’ve got some new guidance out that says procurement is where AI’s potential becomes reality. Talk to us about what you mean there and why the buying process is so critical to make sure that we have successful AI adoption in government.

Kathrin Frauscher Absolutely, and what a great question. Thank you so much. We really think that flexible and responsible procurement will make AI work for the public. So if you care that artificial intelligence delivers for your government workforce or for the residents that you serve, it really matters that you pay attention how you purchase AI and how you implement AI.

Terry Gerton Tell me more about flexible procurement practices. What are you suggesting?

Kathrin Frauscher What I’m suggesting is using a non-technical term to mean that you can adjust your procurement processes to what you’re buying, that you can make them short and quick, so that they work for your specific purpose. Experts sometimes call that agile, but I think we in the normal world just would call it flexible.

Terry Gerton And why is the speed piece of that so important?

Kathrin Frauscher Speed matters because procurement has the reputation, but also indeed often is rather slow and bureaucratic. But technology moves fast. So if you want something, you know, quickly or something that can remain adaptable to your environment, you need to make sure that your purchasing methods and vehicles are equally fast and flexible.

Terry Gerton Well, speed comes into play in another aspect of this because there’s a lot of hype maybe and a lot of attention around building custom AI solutions, but that is not fast. And your research shows that most agencies want to buy off the shelf tools. So talk to us about what that might mean then for the procurement teams and the processes.

Kathrin Frauscher Yeah, I would love to. That was actually one of the big surprises. We did this research project for about a year. And when we went into it, we also expected that we would find out that there are a lot of custom products out there, a lot of what they call requests for proposals, where you really take time to buy the technology that you need for a specific purpose. What we found out is that most people buy technology through existing platforms, vehicles at the central level. So that changes the game of how both I get my AI technology, but also what I need to pay attention to along the way.

Terry Gerton One of the reasons that a traditional procurement process is so slow is because it’s pretty risk averse. And there are a lot of risks associated with AI, we hear about them all the time, bias, hallucination, all kinds of things. So how can leaders, especially procurement leaders, then, balance caution and risk aversion with the need to move quickly to make sure that they’re getting current AI technology?

Kathrin Frauscher Absolutely, you said it there yourself. I think the key word is balance. You have to balance caution and urgency. I like to say you … can’t move too slow so that you’re missing out on things, but you can’t move too fast so that you’re not ready. So it’s all about the balance of being fast enough so that you get what you need, but slow enough so that you’re ready.

Terry Gerton Is there a governance role involved in that and what would you suggest?

Kathrin Frauscher Absolutely. One of the things that our research found is that being AI ready and having the needed governance frameworks is one of the most important things that governments can do. And a good governance framework is clear, you know, it’s written in plain language. It balances this level of risk of being fast but also being prepared. And then I would say the key thing is to train your people on those frameworks. So don’t just have it on a piece of paper, but make sure that people know how to use it.

Terry Gerton We’re talking specifically about buying AI tools, but what about using AI tools in the process of buying AI tools?

Kathrin Frauscher Absolutely. We see an equal hype about that than we see about everything around AI. We also see a similar trend that honestly for now a lot of the use cases are still pretty boring, I would say, you know, in terms of, help me write an RFP, help me work faster but don’t make the decisions. But as I like to tell my kids, you know, boring things are very important too. So we are paying attention to how that is unfolding and how governments again can get the best use of AI while making sure it delivers the best outcomes for their residents.

Terry Gerton I’m speaking with Kathrin Frauscher. She’s deputy executive director at the Open Contracting Partnership. Kathrin, one of the things that you also talk about is that the procurement, the IT, and the project teams often struggle to work together, especially when it comes to AI procurement. What recommendations do you have to improve that relationship?

Kathrin Frauscher Yeah, great question. We really think procurement is a team sport and you need an extra strong team when you’re purchasing AI technology. So the biggest advice is to come together early throughout the process and make sure that all of you are AI ready.

Terry Gerton What does AI ready mean to you in that sense?

Kathrin Frauscher Yes, one of the biggest requests that we actually got from our procurement partners was, we want to learn more about AI. We don’t think we know enough yet to make good purchasing decisions. And I think that is true for many government officials.

Terry Gerton The general services administration is trying to centralize some of this. Do you feel like they’re doing a good job in defining AI and what the tools might be for the procurement and IT teams to be able to use?

Kathrin Frauscher Yeah, they are following a trend. centralized purchasing of AI is definitely something that we see around the world. It has the advantage of giving you speed and standards. What you need to pay attention to is that the implementation and the use is still effective and adapted to each agency and that each agency has the capacity to use AI well.

Terry Gerton Well, speaking about not knowing enough about AI, one of the other issues that has come to light is vendors sometimes exaggerate a little bit about what their AI products can do. So if you were coaching procurement teams around this, what sort of questions should they be asking to kind of cut through the hype there and make sure they’re getting real value that they understand what they’re buying?

Kathrin Frauscher Absolutely. We have some great questions for that in our guide. And I think one — the main thing I would ask my vendor counterpart to do is show me where you have done it successfully. Let me try first. So we are big believers in prototypes, demonstrations. Sometimes they have fun names like “bake offs” because if you see it work, then you know that it might help you better.

Terry Gerton Tell us more about the specifics in your guide.

Kathrin Frauscher The guide. Yeah. The guide is really driven by many, many questions we got from governments around the world, especially procurement teams, that said we have this need to buy AI, you know, sometimes because we are curious, because we need it, or because we’re being told to buy it. But how do we do it well? How do we do it in such a way that it serves our government workforce and maybe most importantly our residents and our citizens? So that’s really what the guide is about. It starts with telling procurement officers, procurement directors, the foundations about AI, because like I said before, they really wanted to learn more about that. And then how you can be a good team player, what we already also talked about. How can procurement have this role of bringing everyone together so that they can align around the goals and the use cases, the terms, the payments and what you’re getting.

Terry Gerton It’s got some really interesting scenarios I think in there that walk people through the process. Tell us maybe about one of those.

Kathrin Frauscher Yeah, absolutely. So we have these pathways because it does depend on what you’re trying to achieve with your technology, but also what purchasing vehicles are available to you, right? We sometimes like to think, if you think about it like a car, right? Oh today, I need, you know, the minivan or my small car or the bus, but in reality procurement teams are often being told you have to use the bus. So we also have in the guide some hacks that if you use the bus but you actually wanted to use a Jeep, what you can still do to get there?

Terry Gerton It sounds like folks will find something in there that relates in some way to every situation that they’re facing.

Kathrin Frauscher We hope so. We really wanted to make it practical and not, you know, a theoretical piece of work.

Terry Gerton So Kathrin, we’re really just at the dawn of folks buying AI for government application. If you transport yourself five years down the road, what do you think will be different and what do you think the lessons learned at that point will be?

Kathrin Frauscher Yes, great question. Honestly, I think we don’t know what it will be like in five years from now. I think AI is changing and evolving at a speed that we haven’t seen that often before. But I think that also means that your procurement process needs to be ready to evolve and like we said in the very beginning, it needs to be flexible so that if AI evolves, you can still get what you need and you’re not stuck with something from two or three years ago.

The post Procurement could decide whether AI succeeds or fails in government first appeared on Federal News Network.

Interview transcript:

Terry Gerton We’re going to talk about a recent GAO report that’s certainly timely. The use of the Department of Homeland Security and Custom and Border Protection’s use of soft-sided facilities for joint processing centers. Tell us a little bit more about the situation and what motivated GAO’s assessment of how this process is going.

Travis Masters Well, Terry, as you probably are aware, most of our reviews are initiated at the request of Congress. And so in this case that was the case. The Homeland Security Committees in both the House and the Senate requested that we take a look at DHS’s contracting and use of soft-sided facilities at the southwest border for holding apprehended individuals and processing them. In the 2019 to 2024 time frame, the number of individuals at the border that were apprehended increased over that time frame from about 850,000 individuals in 2019 to a peak in 2022 of about 2 million individuals. That’s a lot of people. CBP’s facilities were dealing with overcrowding issues, and so they put these temporary, tent-like structures known as soft-sided facilities up to help alleviate that. There was a lot of money associated with that as well. The cost for the facilities went from $170 million in 2019 to $1.4 billion dollars in 2024. So given the numbers of individuals and the size of the cost, Congress was interested in having us take a look at how those contracts were being were being managed and the facilities were being run.

Terry Gerton In the course of this assessment, your team visited multiple sites. You went onsite to see what was happening. What were the most significant findings about how CBP planned for and provided oversight of these facilities?

Travis Masters We visited four facilities. At the time of our review, CBP had seven total soft-sided facilities along the southwest border. We visited four of those. And we looked at eight contracts out of the 69 they had for those. The primary takeaway for us in all of that was that there were areas where CBP could have done a little bit better with regard to analysis and planning for requirements for those facilities, with regard to numbers of personnel needed for certain functions. For instance — porters, who are folks that move individuals’ possessions around within the facility and other items within those facilities. As part of our review, we pointed out that they had, in some cases, too many individuals in a facility and in other cases, too few. And they didn’t really have a staffing model methodology for helping with those fluctuations. And in fact, during our review, our questions about that actually prompted CBP to go back and revisit that, which resulted in a real-time savings: $2.7 million per month between August 2024 to March of 2025, for about a savings of $18 million. So, you know, things of that nature. It was about doing better planning and having better analysis that was really kind of the broad takeaway for us.

Terry Gerton Simultaneous to your report, DHS received millions of dollars to construct additional hard-sided or permanent facilities. What did you find about the cost effectiveness of the temporary structures compared to permanent joint processing centers?

Travis Masters The permanent facilities don’t exist yet. DHS is in the process of building the first one in Laredo. They received just over $300 million from the Congress in 2022 to build this permanent facility. What we found was similar in that sense, that the analysis and planning up front for choosing where that facility might go, how big that facility might be, lacked in some areas regarding requirements and cost estimating. They made a decision to put the facility in Laredo; they didn’t really document clearly the rationale or the criteria for why that was the location selected versus other locations. And they didn’t have a comprehensive cost estimate in place before that. And so again, it really boils down for us to just doing good upfront homework to make sure that you understand that the investment you’re making is well-informed and that it’s the most efficient investment and effective one possible, which again requires you to understand the requirements and things of that nature. So in that sense they were similar. They both JPC and the soft-sided facilities needed some additional study up front.

Terry Gerton I’m speaking with Travis Masters, he’s a director for contracting and national security acquisitions at GAO. In the course of this assessment, GAO made six recommendations documenting lessons learned, focusing on those lifecycle cost estimates. Which of these do you see as the most important for DHS to act on right away?

Travis Masters I think the lessons learned aspect, conducting the analysis necessary to kind of inform future decisions, is probably the biggest. We made some other recommendations as well, regarding oversight of the contract and training of contract oversight officials, which are also important. But the lessons learned piece and the study and analysis piece regarding the joint processing center, I think are the keys. In March of 2025, CBP closed the soft-sided facilities that it had. The number of apprehensions went down, the soft-sided facility contracts were not extended. And so CBP kind of has an opportunity right now — now that there’s sort of a lull in the in the number of individuals being apprehended — to take some time to think forward about, how would they plan for and react when numbers increase again? Because history shows us that the numbers do increase and decrease over time, and it’s likely that the numbers will increase again at some point in the future. So we see that as really a target of opportunity for CBP to take some time to retrospectively look and document lessons learned so they can prepare for the future.

Terry Gerton That’s a great point. DHS did concur with all of the recommendations, but you bring up an important point about capacity. Do they have the capacity and the skill sets to do this cost analysis, to do this planning? What would it take for DHS and CBP to really fully implement your recommendations?

Travis Masters Well, just simply assigning the people to do the work, having an organization within DHS to take a look at the numbers historically, the contracts that were in place at the time, the data, very similar to the information that we collected and analyzed for our report. And then taking some time to sit down and look at — there are a number of best-practice documents. GAO has best practices, for instance, for analysis of alternatives that we cite in the report that could help DHS as it plans for its joint processing center investments, figuring out what’s the best alternative, cost-effective wise or requirements-wise. And so just taking some time to sit down and actually do the analysis, and then we’d like them to document that. I think it’s important to document those lessons, not just simply have them in some individual’s head or maybe in a collective group of heads, but have it on paper for you know, for the future individuals that will have to make those decisions as well, so that it’s memorialized.

Terry Gerton DHS has other detention functions across other portions of its organization. Do you see a cross-fertilization of this skill set and making sure that they’re considering the same factors as they’re planning for other detention facilities?

Travis Masters Absolutely. I mean I think these are just general, basic, good analysis, good informed decision-making kinds of things that would apply regardless of the organization. Our report was focused on CBP specifically, but as you know and others know, ICE also has detention facilities that it manages and contracts for, and I think that these same principles, these same ideas are applicable to them as well.

The post With billions spent on temporary border facilities, GAO says DHS needs better plans first appeared on Federal News Network.

Interview transcript: 

Terry Gerton You’ve reported on an incident that happened just before Thanksgiving, when the Justice Department demanded a massive collection of data from U.S. attorneys. Tell us what they were asking for and why they got such a short deadline to provide it.

Ben Penn Yes, so the Deputy Attorney General’s office on the Monday before Thanksgiving asked all 93 U.S. attorneys’ offices for a collection of basically data points, samples of all the cases that they’re working on that show progress on a variety of White House directives and memos from the political leadership of the Department of Justice. And this was basically, it’s not all that abnormal to do something like this, which is called a data call, for the DOJ headquarters in Washington to seek statistics and basically hold the U.S. attorney’s offices feed to the fire and show them and give them specific data points that demonstrate progress on some of the prior year’s policy priorities. But this one did come across as a little bit grueling given the timing with such short turnaround. They were all told they had only two days before to turn around the data and respond by the Wednesday night before Thanksgiving, and just the sheer volume of all the data and stats that was being asked for. I did hear from folks that that was a little bit noteworthy, but overall, I think what’s interesting here is the request serves as a snapshot, it’s sort of a window into, what are the policy buckets that enforcement, in particular, that this administration is most keen to provide examples of to show the White House that it’s fulfilling its objectives.

Terry Gerton So you sound like there’s two conflicting thoughts there. One is, this is a normal end-of-year data call to get a comprehensive perspective of all the work that DOJ has done over the past year and yet they really had about a 72-hour timeline to do it. Did somebody forget to send the email three weeks earlier, or what’s going on there?

Ben Penn I don’t have any insight there. I will say that it could simply be, we could speculate as to whether the White House, given all that’s been going on this year, with the White House moving DOJ’s agenda closer to its own, if it came from the White House asking to, maybe expressing frustration about, why aren’t there more cases, for instance, on lawsuits against sanctuary city jurisdictions, or, where are political violence cases pursuant to an EO, or executive order that Trump put out after Charlie Kirk was murdered? But we don’t know for sure, and it is possible that this is just, that to be a U.S. attorney is not an easy job and having a tight deadline may just be part of the process.

Terry Gerton You mentioned a couple of specific situations there that they were looking for data on. Tell us more about the investigation of organized political violence after Charlie Kirk’s murder.

Ben Penn Yeah, so in September and shortly after Kirk was assassinated, there was a, it was, I called it an EO earlier, it was actually technically a presidential memorandum that came out and instructed the Attorney General Pam Bondi to basically ensure that there were cases that were being brought that specifically looked at organized political violence and domestic terrorism issues that have been priorities of the department in the past, but specifically in this case it seemed to direct request for information about left-leaning groups and funding sources like the George Soros’ Open Society Foundation, and to look at Antifa and to try to investigate all the possible sources of organized political violence. So that was one of them. There was also a request for information on open cases that had a nexus to cartels or transnational criminal organizations, which stemmed from an Attorney General Pam Bondi memo back in February. There’s also requests for all cases that are all examples of dismissals or cases that were closed in the aftermath of Deputy Attorney General Todd Blanche’s memo earlier this year that called for basically scaleback enforcement of the cryptocurrency industry. Those are just some examples.

Terry Gerton I’m speaking with Ben Penn. He’s a senior reporter at Bloomberg Law. So what are the kinds of documents that DOJ should be expecting to get back from this data call?

Ben Penn Yeah, well presumably, assuming all 93 U.S. attorneys’ offices were in compliance with the deadline, they have basically, I would say it’s both numerical and there are probably narrative examples of the types of cases that the department is in the midst of pursuing into cartels or into foreign terrorist organizations. So, but you would also see counts of say, all the U.S. attorneys’ offices combined have brought, say, the X number of lawsuits against sanctuary jurisdictions, or have brought X number of cases under, there was a specific request, for instance, to show the number of cases, criminal prosecutions of adults who sponsored unaccompanied migrant children. That was another recent policy from the Deputy Attorney General asking U.S. attorney’s offices to take a harder stance on looking for any crimes that an adult sponsor of an unaccompanied migrant child may have committed. So they’re looking to tally up all the examples that show how the extent to which the U.S. attorneys’ offices are implementing what the administration wants them to be doing.

Terry Gerton Given now that the data call itself is public knowledge, what would you expect to happen with the data as it’s collected? Will that also be public, do you think? Or will lawmakers want access to it, and what conclusions will people draw?

Ben Penn I would love to provide some transparency into this, Terry. Unfortunately, I would not expect it unless anybody would like to disclose the results to me or to any other member of Congress or reporter. But the existence of this request was an internal email that I obtained. And I believe, it is, at the same time, I could see if the Attorney General, Deputy Attorney General are pleased with the results, you could see them highlighting it in an end-of-year summary of success that we’ve had in enforcing the president’s priorities. That’s something that you would see, but there is no obligation for them to show their work, if you will.

Terry Gerton And might Congress be interested in it as a matter of oversight?

Ben Penn Yeah, I could certainly see that, whether both supporters or critics of this administration would have an interest in knowing the extent of enforcement into political violence, into sanctuary jurisdictions, into cryptocurrency industry. That’s all information that you could expect in an oversight request. Or, subject to the next time one of the senior DOJ officials is testifying on the Hill, we could see questions along those lines. So I’m all about transparency. I would love to see as much robust data that shows what came of this request as possible.

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Interview transcript: 

Terry Gerton I want to talk with you about the Equal Employment Opportunity Commission. They were pretty quiet during the shutdown, but they’ve got a full quorum now. They haven’t had that in a while. And they’ve got funding. You work with them quite a bit. What do you think is going to change in the near term?

Debra Leder I think we’re going to see a lot of changes, at least over the next several weeks, until there might be another issue with funding down the road. But I think that we can expect the EEOC to come out of the gate running to accomplish some of these tasks that they have been anxious about doing since the current administration took hold in January of 2025. And so although there’s now a new member who makes the quorum for the EEOC Commission, the now chair who was acting chair and previously commissioner, I think has made the priorities well known. And now that there is a quorum, the agency will actually be able to take official action and vote. Things of those nature will make a big difference.

Terry Gerton So talk us through the priorities of the EEOC under this administration and maybe where there are major differences from the prior administration.

Debra Leder So, we are going to see a lot of realignment and adjustment of where the EEOC focuses its attention and its resources. Some of the big ticket items for the new EEOC commission is to align the agency’s policies with the executive orders that were issued, several of the executive orders which were issued in January of 2025 and forward. Those issues including the ferreting out DEI that may be counter to the law in the EEOC’s view, as well as the pregnant workers’ protection regulations in the EEOC’s view, maybe going too far from what Congress passed as the protection act for that, and also to maybe roll back certain protections for certain previously thought to be protected categories, including those of the LGBTQ+ community in terms of sexual orientation and transgender status, gender identity type thing.

Terry Gerton  So those shifting priorities can come into play in a variety of ways. Do you anticipate more aggressive litigation on the part of the EEOC? Maybe just more policy memorandums? How do you think those priorities will actually be put into practice?

Debra Leder  I think in terms of priorities for the regulations, the rules that had been put out during the past administration, including the harassment guidance that was, I think, officially published in April of 2024, and the pregnant workers’ guidance, I think as a first measure or order of business, the EEOC is going to either do a wholesale retraction or an overhaul revision of both of those guidances, for sure. And in terms of litigation resources, we’ll be seeing more priority pattern in practice and systemic litigation, targeted perhaps in ways that it hasn’t been over the past few years, including to what the commission may view as illegal DEI initiatives that employers may have, and then also helping to clarify its view of what employers are obligated to do, especially in the area of religious accommodations and whether or not, and how, to balance religious accommodations versus other interests that are sometimes competing in the workplace.

Terry Gerton So would you anticipate the order of those activities being first publication and education and communication about these new priorities, or new angles on the rules and then moving to enforcement?

Debra Leder  I think the publication angle has already been well disseminated, even though the EEOC didn’t have a quorum. Now, Chair Andrea Lucas has been very vocal about what she sees as the driving priorities of the agency and in her speaking, as well as in the budget that was submitted in May of 2025 in terms of where they’re going to allocate the dollars to that. So I think the agency is already kind of gassed up and ready to go out of the station in terms of that. It’s just how long will it take to undo some of these regulations, given that there is a commenting period and they’re also subject to court challenge, as we’ve seen in the past several years. So knowing that that might not be as fast a process as the EEOC might hope, we’ll at least see a displacement of the disclaimer language and archived language we now currently see on the banner page for the EEOC, and it’s either work under construction or, stay tuned for new upcoming guidelines. But in the interim, I think we’ll see it in the way that the agency works on a day-to-day basis, how they accept charges, which charges they investigate fully, and which they may serve to litigate, and so that, as well as continuing to do the education and outreach to let the community know what their priorities are, what the EEOC is expecting to spend its resources and efforts on.

Terry Gerton  I’m speaking with Debra Leder. She’s a partner in labor and employment law at Akerman. Following on with that assessment of what the priorities are going to be and where you expect to see action, for the employers who deal with EEOC issues, what should they be doing in the near term to prepare for this change in focus from the EEOC?

Debra Leder Hopefully, employers have already been staying aware of, on top of the changing priorities, the realignment from the current administration. And so being insightful, those employers most likely have already started to review their policies, to review their websites, to review their hiring criteria, as well as how they handle compensation issues and to just make sure that the policies are going to be step-in-step alignment with what the EEOC and what the executive orders have asked for. But in terms of really getting up to speed, aside from continuing to monitor what regulations may be updated and not just formal guidance, but we may see more enforcement guidance or Q and A type format from the EEOC to help employers get up to speed on doing that. Employers need to make sure all of their documentation has been reviewed and is ready in the event of what might be a very broad, all encompassing request through the investigation stage of some of the EEOC’s priority issues. So to just buckle up and be ready for that ride.

Terry Gerton And so what will you be watching for as the EEOC really gets its feet under it and and moves out? Are there particular cases or activities that you think are going to be significant here in the short run?

Debra Leder Well, the significant cases are waiting to see how the EEOC is going to interpret, we kind of already know, but from the Bostock versus Clayton County case in terms of transgender, gender identity and sexual orientation protections and whether or not the EEOC is going to — we know the EEOC in their updated guidance on harassment is going to remove those types of protections. We already know that the EEOC, I believe, has not taken any additional charges or is not investigating charges that assert claims on those grounds, although there’s still private cause of action to get a right to sue to bring those issues to the forefront. But bringing it back to what employers can do, they need to continue to be mindful of what might be the federal policies that they’re seeing and how that might compete with state and local laws that are also a moving target on a day-to-day basis, or at least a week-to-week basis. So employers definitely have a challenging thing, but as a lawyer and as the co-editor of my HR Defense blog, which I have to put a pitch in for, we try to stay on top of all these issues and push out information that employers need to know.

The post The EEOC powers up for swift action with full funding, a quorum and new priorities first appeared on Federal News Network.

Interview transcript:

 

Terry Gerton Congratulations on being a newly elected fellow of the National Academy of Public Administration. What does that honor mean to you?

Jamie Morin Well gosh, the number of folks that I have admired over the years who are fellows of the Academy is pretty impressive. And so it was it was humbling, but really a wonderful recognition. I was I was deeply honored.

Terry Gerton Well, it reflects a lifetime of service. Tell us about what motivated you to begin public service in the first place.

Jamie Morin  I take it back to family influence, for one. I was raised with a really strong tradition of making the community stronger. My mother’s a school teacher, has worked with autistic children for most of her career, still working in that field. And both my parents just had a really strong commitment to the community. So it starts with that, right? And then for me I grew up in the late Cold War, and that built in me a really strong interest in national security. And so I was struck that a meaningful way to serve and to strengthen the nation was to work in a career in national security. And it’s been just enormously rewarding and fulfilling.

Terry Gerton As you think back across that career — you served in the Air Force, you served at DoD level. What stands out as one of your most meaningful accomplishments in the public administration space?

Jamie Morin Well, you said accomplishments, but let me start with a moment. You know, I guess this will sound hopelessly naive in these cynical days, but the first chance I had to take the oath to uphold the Constitution — when as a graduate student, I guess I was 22 or 23 years old, I was offered the chance to work in the Pentagon on requirements and plans — to be pulled into something much bigger than yourself, to be pulled into incredibly consequential matters, and to do it with a devotion to those principles in the Constitution. Just being in that moment as a young person was a tremendously shaping experience for me. So that that’s where I would have to start. I’ve probably taken that oath personally six or seven times since. I’ve administered it dozens of times. I had the privilege of presiding at a graduation ceremony from basic military training with hundreds of young people starting a career in military service. But you keep coming back to: We are offered an opportunity in this nation to uphold a constitution that’s bigger than any of us, bigger than the politics of the moment. And that that’s a great starting point. You know, to the accomplishments, I’ve worked mostly in resource management, in making smart decisions with the taxpayers’ money. Chief Financial Officer for the Air Force, Cost Assessment and Program Evaluation for the Department of Defense as a whole. So the biggest opportunities for impact in roles like that are when you can get something started on the right foot. And the things we do in national security, particularly in developing technology — it takes time. We’re trying to do really hard things. But I had the opportunity with both the Air Force and working for the Secretary of Defense to get a few really consequential and major programs started, thinking about the B-21 bomber for the Air Force, for example. It’d been a long time since the U.S. Air Force had been able to buy a bomber on something approaching planned cost and planned schedule. And it looks like we’re on a path to be pretty darn close to that on that program. And so that’s a tremendous thing to be able to look back and say, “hey, we’ve been working on this, it’s a big deal, billions of taxpayer dollars, critical to the success of the joint force. And I was able to have my fingers all over that at the outset.” So that’s a significant one. Moments of crisis. We’ve recently gone through a government shutdown. I had the challenge of operating through a few of those as Air Force CFO and working in OSD, and some close calls as well as actual shutdowns. Those are searing moments where leaders have to make tough decisions — again, with the Constitution first and foremost in our mind. Our system isn’t always perfect, but it is ours and it’s our responsibility to operate within it and to make it better. And then finally, I guess I would highlight people, in that the public service is an important calling. It demands things of people that are different than what we ask of people in the private sector. And because it’s sometimes hard for people to get their feet under them in the complexity of an organization like the Department of Defense or many of the other federal agencies, we have to make long-term investments in our people. So being able to be involved in hiring and developing talent and giving people an opportunity to really accomplish their potential and then to also send them forth to go do bigger and better things, whether in government or outside, those have been just tremendously rewarding for me.

Terry Gerton I’m speaking with Jamie Morin. He’s Vice President of Defense Strategic Space at the Aerospace Corporation and a newly elected fellow of the National Academy of Public Administration. Jamie, you told some great stories there, but early in that last response, you mentioned the oath of office and allegiance to the Constitution. You’ve seen in your service firsthand how trust in government can be tested in times of fiscal uncertainty and strategic transition, and we’re certainly in that right now. How do you view the current state of public administration and what can it do to help increase public trust in government?

Jamie Morin I think approaching public administration as an exercise in continuous improvement is really important. We have to always be willing to question the “how” of how we get things done. Take advantage of new technology, take advantage of new concepts and approaches. We have to do that, still, with an eye to the core principles, right? Public service is a public trust. We have to conduct ourselves in public administration in such a way that there is no question about the integrity with which people work and that they are doing things with the right ends in mind. We’re talking about a nation approaching its 250th birthday. So the timelines and the time horizon that the public administration has to think about is different than what we as individual humans have to think about, or what even, you know, long-lived companies have to think about. We have to take that long-term perspective for the betterment of the nation. But again, you’ve got to balance that with responsiveness to changing needs. The needs that the public administration meets in a time are shaped by the time. They’re shaped by the technology, they’re shaped by the psychology of the citizens, they’re shaped by the external environment that we operate in. So continuous improvement, willingness to adapt, but founded on those core principles of what government is about and the constitution we uphold. I think that’s the bottom line for me.

Terry Gerton Well, and you also mentioned the importance of people. If you were speaking to someone just starting out in public service, perhaps in defense analysis or budgeting, what advice would you give them about building a career that really makes a difference?

Jamie Morin I would start with coming in for the right reasons. Every once in a while I run into people who are entering public service with a plan to sort of hop, skip and jump their way through it. I’m not sure that’s the right approach. I think that there are certainly great opportunities for people to come and depart from government service and have careers that cross those boundaries. I think that’s very useful. But, you know, it really should be about the mission of the agency and the national interest, not so much the personal interest. So I find that people that come in with that perspective generally do better. If you’re thinking about, how can I accomplish things for the citizens, how can I deliver on the promises of government? Those people are more likely to both enjoy themselves and have a positive impact than those who are, you know, kind of climbing their way up a ladder. But the other piece I would suggest is that reputation matters. People’s ability to get things done in complex environments, whether big bureaucracies or just very difficult missions with lots of factors that have to come together. It depends on credibility. It depends on creativity. It depends on being seen as a team player. Someone who’s willing to make sacrifices to get the right things done. And that’s a hard-earned reputation — and it’s one that’s also easy to lose if you make bad choices. As someone who is an adjunct professor at Georgetown now and teaches students who are really interested in public service, these are conversations I have all the time. I encourage people to look at the career and I encourage them to look at it from a mission accomplishment perspective, because that’s how it’s going to be most rewarding for them and for the mission that they’re trying to actually support.

The post Jamie Morin helped shape defense strategy from inside the Pentagon. Now he’s being honored for his contributions to public service first appeared on Federal News Network.

Interview transcript:

 

Terry Gerton OASIS+ enters Phase II with five new service domains and draft scorecards expected December 16, ahead of a January 12 solicitation date. The expansion could reshape competition and compliance for federal contractors, especially small businesses. Stephanie Kostro, president of the Professional Services Council, is here to share her insights. We’re going to focus a little bit more than we usually do today on things that are happening in the small business world. So let’s start with December 4th. GSA announced the launch of the OASIS+ Phase II expansion. First of all, tell us what’s noteworthy there.

Stephanie Kostro This is long anticipated, Terry, and I will say thank you very much for focusing on small business today. It has been an area where a lot of our contracting friends have looked for guidance and information from the executive branch and from the legislative branch, to be honest, about where small business policy is going. And so thanks so much for raising this important issue area. OASIS+ has been in the works for so many years now, and there are hundreds, if not thousands, of vendors very interested in this expansion. And what I’ll tell you very quickly is Oasis+ had been eight domains or eight categories of services. It is now 13. And the five that they’ve added in this new tranche are very interesting. It is things like business administration, financial services, human capital, marketing and public relations, and social services. So this is a dramatic increase in the scope of Oasis+. It expands from eight domains, service domains to 13. And we have a lot of interest here in the contracting community about how they can support the executive branch through these new domains.

Terry Gerton Those new domains seem tailor made for small businesses. What are you hearing about how small business might be able to participate now?

Stephanie Kostro Again, it’s very exciting. It looks like the solicitations will be open here in January, mid-January of 2026. We’ll have to see what the actual words on the paper, if I can be that mundane about it, say about small business participation. But this is exactly the kinds of domains that small businesses excel. The marketing and PR, the human capital, financial services, etc., where they can partner with large companies in either in a joint venture or as a mentor-protege. So we’ll have to see what GSA decides will be the allowable partnering arrangements going forward. I would also note that this is a reflection of an executive order that the president signed out early on, and it was back in March, it was called Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement. So really this is the migration of some of the domains from other vehicles over to Oasis+, which really makes Oasis+ a must-have vehicle for contractors.

Terry Gerton What should small-business owners and leaders be looking at between now and January to help them prepare?

Stephanie Kostro They really should check out Oasis+ Phase I and see what came out in the solicitation documents for that. They should monitor the GSA websites very, very closely to see if any blog posts there will give them insight into what will be allowable. You know, a lot of times PSC has voiced concern about final requests for proposals not hewing very closely to the draft that they had released as an RFP. And so sometimes you have to scramble as a small business to figure out who can you partner with? Because the final RFP does not really look like the draft RFP. I’m hoping that GSA decides to move forward with a final RFP that looks very similar to a draft RFP so that our small businesses can plan accordingly. It has been a rough year in 2025 for small businesses. Some of them have seen contract terminations or de-scoping or rescoping. Some of them have been asked to offer up discounts that really cut into the muscle, not just the fat, if there was fat for a small business. But we need the innovation that comes from small businesses. And I think this is a great opportunity for them to provide an offer that is really beneficial to the government and to the small business community.

Terry Gerton I’m speaking with Stephanie Kostro. She’s the president of the Professional Services Council. Stephanie, speaking of small businesses, there was a bill that passed the House last week, the SBA IT Modernization Reporting Act. What are you watching here?

Stephanie Kostro Oh, now we can really dork out, Terry, on all of this stuff. So I as I mentioned in our previous conversation here, we’re talking about HR and financial services, or rather human capital and financial services, etc. The IT Modernization Reporting Act is a really interesting piece of legislation that looks at recommendations offered by the Government Accountability Office back in 2024 about reporting on agencies’ IT systems. And so they really want the Small Business Administration to help address risks tied to the Small Business certification platform that can help reduce the project risk, so that it can actually improve project risk management, establish a risk mitigation plan and resolve cybersecurity vulnerabilities. Now, Terry, as you know, we are seeing a host of cybersecurity requirements come out from the Department of War and their Cybersecurity Maturity Model Certification program, but also elsewhere. And it hits small businesses hard. You know, some of this is basic cyber hygiene, but some of it is really, really burdensome on small businesses that don’t have the resources and can’t spread resources out between, say, a commercial side and a government side. And so as we look at the implementation of this legislation, it’ll be interesting to see how small businesses can reduce the risk and reduce their vulnerabilities across and what SBA can do to support them in that.

Terry Gerton This is obviously the beginning of its legislative process. It still has to pass the Senate. It still has to get signed. But are there things that you would want small businesses to be looking at now with the expectation that this bill will eventually be passed?

Stephanie Kostro That is a great question, Terry, and it actually leads me to something that your listeners probably just learned about recently, which was the House and Senate released their National Defense Authorization Act for fiscal year 2026, where that act, and it’s in its final stages, this is the conference bill, right? And so now it just has to pass House and Senate and get signed by the President. I say “just,” but it takes a few days for that to happen. That bill was released on December 7. And I would note that in it actually establishes more firmly Project Spectrum, which is a Department of War effort to help small businesses with their cybersecurity. I encourage small businesses to look at Project Spectrum if they are a Department of War contractor. But even if you’re not, take a look at what those offerings are. See what you can get the government to support you and to help pay for in terms of cyber hygiene and cybersecurity. I’m encouraging the companies to do that even in advance of any of this SBA IT Mod act. As we move forward, it’s going to be a huge cost for companies and anything the executive branch puts in place to mitigate those costs or help minimize those costs is going to be a good thing.

Terry Gerton Stephanie, you’ve already alluded to a couple of big changes that small businesses are facing as a result of so many of the new policies and programs coming out of the Trump administration this year; 2026 is going to look very different for small businesses than 2025. Give us a feel for the change in the business market, the government contracting market for small business, and what do you think the year ahead brings?

Stephanie Kostro Small businesses have, again, seen a lot of changes here in 2025, not least of which has been calling into question the socioeconomic set-asides that we have in place. There’s the 8(a) program, which is for disadvantaged businesses, but there are also women-owned small business, veteran-owned small business, service-disabled veteran-owned small business, hub zone, etc. So we have ratcheted back, as a nation, back to the statutory requirements. The Biden administration and others had grown the set-aside amounts and thresholds for these kinds of small businesses. Those are back down to the statutory requirements. In addition, we have heard about this audit of the 8(a) program, which was launched months ago, but more recently, contractors have been receiving documentation requests from their customers to help justify 8(a) program awards, etc. So they’ve seen that as well. As we go into 2026, I imagine we will see more of this audit-like activity to make sure the companies that certify themselves as small are in fact small and qualify for these set-asides. I would also say under the revolutionary FAR overhaul, which is this FAR rewrite we’ve been undergoing for a few months, all of the class deviations, part by part of the FAR, are out there. The agency supplements are being changed. We are awaiting formal rulemaking for some of these things. But it does appear that the “rule of two” upon which a lot of small businesses base their business strategies is also changing. I’ll just succinctly summarize it by saying right now, if the revolutionary FAR overhaul goes through the rulemaking process and nothing else is changed, that “rule of two” applies only to the contract level, not to the task-order level, which is a significant change. It also allows the contracting officers to have a little bit of flexibility in terms of what can be deemed for a set aside, and then also not necessarily requiring companies to recertify their status. And so a lot of these changes are going come to be executed in 2026, and it is again going to be a year a little of some upheaval for small businesses.

Terry Gerton So if you’re a small business owner or leader and you’re thinking about your strategy or your business plan for 2026, what are the key things that should be at the top of your consideration list?

Stephanie Kostro The first one is obviously to monitor everything that the government, the executive branch is saying in terms of what the requirements are for a small business. I would also make sure that if you have an opportunity to get on a vehicle yourself as an organic small business or as a joint venture, go ahead and get on, because I’m not sure what on-ramping opportunities are going to look like in the future for some of these larger vehicles. And also make sure that you have all of your documentation in a row, all your ducks in a row for documentation. And that includes not just, “hey, you’ve got an 8(a) contract award and you may be getting required to submit some documentation,” but to certify yourself to make sure that the platforms are in place where you can certify yourself quickly with the SBA and making sure that you have all of that documentation in line. This is also an interesting dynamic for any new entrants to the market who have not experienced what existing small businesses experienced here in 2025. They may look at this and go, the juice is not worth the squeeze. It’s too hard to do work with the federal government. I think it is a business decision that if folks want to come and talk to those of us at the Professional Services Council and we can give them a little bit of a taste of what the dynamics are, we’re happy to talk to them about, is this a good market for you to explore? I think it is. Particularly, for example, we talked about at the top of this discussion, the Oasis+ expansion. The new five domains are for services, are great for small businesses. How do you compete for that? Come talk to us and we can help you out.

The post GSA’s next-generation contract vehicle is expanding and small businesses need to pay attention first appeared on Federal News Network.

Interview transcript:

Terry Gerton You have been in public service and in safety net programs for over 33 years. As we come out of this shutdown, it really exposed both the importance and the fragility of these programs. Give me a sense from your experience what you saw, and maybe, what did we learn about these programs in the last 43 days?

Clarence Carter Well, I hope what we learned is the essential nature of the these programs. The first couple of weeks of the shutdown were pretty lukewarm. But as it got to the place where we saw the potential challenges to the Supplemental Nutrition Assistance Program, things got serious. And quite frankly, I never thought it would get to the moment where we were not in a position to provide the most basic of the safety net services to the 42 million consumers that are desperately in need of those. I am glad that we were able to ultimately clean that up. But having that, if you would, anvil over the head of individuals that desperately need that most basic support I think showcased the importance of the safety net and of some of the programs we administer.

Terry Gerton You’ve just written a book called “Our Net Has Holes in It.” When you look at these programs, I know you’ve worked in housing assistance, now you’re supporting all kinds of human assistance programs there in Tennessee, what are the most enduring lessons that you want to bring forward about making sure these critical programs work for people?

Clarence Carter Terry, the most I would think enduring message that I have is that we clearly in this nation, we have a desire to help our neighbors that are living in the margins. We spend annually, and this is federal government alone, $1.49 trillion annually in service to vulnerable Americans. My argument, and “Our Net” lays out this argument, that what we have to do is shift our intention, shift our design, and shift our execution. It’s not about us not caring enough. It’s not about us not spending enough. It is about flawed intention, design and execution.

Terry Gerton As you think about those three principles, let’s take design first because that’s the structure that we’re working with.

Clarence Carter That’s right.

Terry Gerton What are the core features that need to be reformed?

Clarence Carter  The first core feature is that all of the 114 means-tested programs are, they were designed singularly to address one aspect of the human condition. And they weren’t designed to work in conjunction with anything else. But many of the consumers that the system serves has multiple challenges that need to be remediated. And the system wasn’t designed to take that kind of comprehensive approach. And so one of the first things that has to happen is the system has got to be reformed so that all of the programs can be enabled to operate as tools in a toolkit, but that can be connected to allow us to take a more comprehensive approach to the issue of human well being, not simply the administration of programs.

Terry Gerton I’m speaking with Clarence Carter. He’s currently the commissioner of human services for the State of Tennessee. Clarence, that’s a huge design issue. I want to talk also about execution because human services programs and assistance are state-federal partnerships. You’ve worked on both sides of that. What are the execution issues there and how can we overcome them?

Clarence Carter Okay, and so Terry, you lay that out perfectly. And the challenge is the states and localities administer the programs and utilize the funding with some state add-on. And the states administer the programs. And so what ends up at the state level is you end up executing the flaws of design of the federal system. And so the state doesn’t have an opportunity to do it differently. They have to administer the rules of the programs as they have been given. And so my life’s work has been a journey to call out the dysfunction of design that begins at the federal level and then works its way all the way down the food chain until it gets to the consumer, who then is quite frankly in a place where they are being served by a system with great intention, but really poor execution and design.

Terry Gerton Alright, so the third portion that you mentioned was intention and you’ve worked across party lines, you’ve worked with leaders of both parties across the partisan lines. One would think that vulnerable assistance would be an important bipartisan issue, but it gets tangled up in politics. How do we separate the value of the programs and the intent of the programs from the politics around the programs?

Clarence Carter Terry, I think that we have to do that by shifting our focus from the politics to the programs. And I feel like, and we lay this out in “Our Net,” it begins with intention. Our intention has to be that we meet our neighbor in their vulnerability with the intention to grow them beyond the vulnerability, not simply provide benefits, goods and services as long as they meet the criterion to be served. And I believe that if we begin with that intention, we can check our partisan weapons at the door and focus on, okay, if it’s our intention to grow people beyond, then how do we architect the system to achieve that objective? We have to begin with this shared vision of understanding that we will always have, every society known to humankind has, that we will always have neighbors amongst us that suffer from some manner of economic, social, developmental vulnerability. And so we have to design an efficient, effective system that understands vulnerability with the intention to grow our citizenry beyond that vulnerability, and success has to be in a system like that. Not that I delivered a benefit, good or service, but that the consumer got healthier for it. We measure right now, we measure outputs. I can tell you, as a administrator of the SNAP program, what I get held accountable for is, did I deliver the SNAP benefit to who was entitled to receive it? Did I deliver it in the right amount? And did I deliver it in the right time frame? Nobody asks me, did that family get to a place where we grew their capacity so that they don’t need it? I get judged on efficiency measures. I think that we need to add to efficiency measures, we need to add human wellbeing metrics, and that that needs to be the true determinant of success.

Terry Gerton Clarence, you’ve laid out a powerful vision there. What would be the top one or two or even three policy priorities that you would put on the table for Congress to help strengthen the safety net and achieve that vision of wellbeing?

Clarence Carter The first would be connectivity. And what I mean by that is that the 114 means-tested programs of the safety net need to be able to be connected so that they become tools in a toolkit to achieve the objective of growing people beyond. So connectivity is important. But before we get to connectivity, we have to begin with a shared vision. And that shared vision, our argument in “Net” is that that shared vision has to be helping individuals achieve the highest degree of freedom possible. And so if we set out with that intention to help individuals achieve the highest degree of freedom possible, and we connect the tools so that those tools can work together, then we can have a system and we measure what counts. We measure human capacity. Those things coming together can create a profoundly different system of public supports.

The post Can our safety net programs survive stress and deliver more than short-term relief? first appeared on Federal News Network.

Terry Gerton Well, as we speak, the shutdown is at least temporarily over, but it left some major disruptions in its wake and one of those programs that we want to talk about today is the National Flood Insurance Program. Can I ask you first to tell us what that program is, but then also talk about how the shutdown and the extension of the shutdown affected that program?

Nicole Upano Sure. The National Flood Insurance Program is an important program for single-family home buyers as well as multifamily owners and operators. It is a backstop to ensure that borrowers have flood insurance even in areas where there is elevated risk, and private insurance companies may be less likely to offer coverage in that area without having some sort of elevated cost because of their risk. So it’s a very important program for many Americans.

Terry Gerton  And it really provides a a stability in markets that are flood prone, right?

Nicole Upano That’s exactly right, Terry. It is an important program for many Americans. It provides stability in the market if there is a national disaster to ensure that money flows back into that community for rehabilitation and repair.

Terry Gerton And during the shutdown, NFIP’s borrowing authority dropped dramatically. What does that mean in terms of practical terms?

Nicole Upano That means that, as I had mentioned previously, this program is an important — or, flood insurance is an important part of home sales and multifamily sales. And without that borrowing authority, those purchases could not move forward since it is a contingency to home buying. And there also is that greater risk that if a natural disaster could occur, that there wouldn’t be an ability to fill those claims and push financing back into those communities.

Terry Gerton So the way that works then is in a disaster FEMA actually uses that borrowing authority to pay out the claims that it may receive. Is that correct? That’s right. So then how did the lapse in the NFIP operations affect home buyers who rely on that flood insurance to maybe close on a mortgage?

Nicole Upano We have certainly seen this across the federal government for many HUD-assisted or agency-assisted programs, that it put a pause in those home sales until the government is back up and running and doing the people’s business.

Terry Gerton So we’re in a continuing resolution now. Did the CR provide additional borrowing authority for FEMA through the National Flood Insurance Program?

Nicole Upano Yes, it sure did. It reauthorized it since September 30. And there is a piece of bipartisan legislation that was also offered that would reauthorize the program until 2026 to provide even greater certainty for homebuyers and and renters across the country.

Terry Gerton Does that mean that folks who were kind of in limbo for the last 40+ days of the shutdown can renew their policies or maybe submit their claims? Does that open the window back up? Yes, it certainly does.

Terry Gerton I’m speaking with Nicole Upano. She’s the AVP for housing policy and regulatory affairs for the National Apartment Association. So, Nicole, let’s go back to this, the program itself, even with existing policies still active, there were some limits. What do policy holders need to know about their coverage, their claims, and their change in funding if we should find ourselves in another funding lapse, perhaps?

Nicole Upano Sure. So if someone had a valid policy during the shutdown, those remained valid throughout the shutdown. But if in terms of a new policy or a renewal, that’s where the rub would be, as well as potentially processing any claims, there would be limitations on that.

Terry Gerton Did you see any misconceptions or misunderstandings on the part of policy owners about what services and coverage would be available to them during the shutdown?

Nicole Upano NAA represents professionally-owned and managed housing across the country. And so they kept the shutdown and any implications very much top of mind and continue to use NAA as a resource to get the most up to date information.

Terry Gerton And so you’re dealing with apartment owners, condo owners, those kinds of things. What are some of their biggest questions when it comes to the NFIT program?

Nicole Upano Well, for our members, they are looking across the federal government at all the implications. For example, HUD and FHA, they provide financing and backing not just for affordable housing but for market rate housing as well. So there was an issue with those closings. And while Section 8 and USDA rural housing — you know, rural housing benefits for renters and their families in rural areas — while those benefits did benefit from an advanced appropriation, there was that similar issue, similar to the NFIP, that renewals and new applications could not be processed and there would have been payment uncertainty for those renters and their families. And so having government back up and running and doing the people’s business is important to both housing providers and renters to ensure the stability of those properties and that renters in those communities remain stable.

Terry Gerton NAA is obviously very sensitive to the real estate market, especially in flood prone or disaster prone areas. Beyond NFIP itself, what does this moment really reveal about the fragility of our disaster response programs and how people can get relief if they’re affected?

Nicole Upano Sure, that’s a great question. Many of the federal government’s housing programs are not mandatory appropriations. And we’ve seen that with other industries, that they are seeking now opportunities to have a backstop if and when this happens again to ensure that agencies can access reserves or that they can expand their budget authority in these times, knowing that eventually the government will be back up and running. And folks will be repaid

Terry Gerton How should policymakers then or legislators be thinking about long-term resilience and continuity for programs like NFIP, especially as climate risks grow and shutdowns maybe remain a threat?

Nicole Upano We would certainly encourage policymakers to reevaluate whether some of these programs should have a mandatory appropriation so there won’t be disruptions. We never know what’s going to happen, certainly with climate risks and change across the country, and so having that certainty is critical.

Terry Gerton So what is NAA’s message then to housing providers and renters on navigating these kinds of disruptions? What do they do to stay informed? How do they make sure that they’re current? What’s your advice?

Nicole Upano Yeah, so NAA continued to release live updates on our website to our members. We continue to encourage our members to work with their residents as their business allows and provided them with resources and how to navigate those conversations. We were pleased to see that the the CR does include a reversal of the rifts that happened during the shutdown. And especially for folks in the DMV, this is extremely helpful to ensure there’s certainty for those residents and that housing providers can know they have a stop gap at the end of the day.

Terry Gerton And what are you hearing from lawmakers? Are they inclined to support those kinds of proposals?

Nicole Upano Yeah, as you can see from the bipartisan legislation to reauthorize the program in 2026, this program has long had bipartisan support. We just want to use this time to encourage policymakers to take that next step.

The post The federal flood insurance program is key to stable housing markets, the shutdown revealed its fragility first appeared on Federal News Network.

Interview transcript

Terry Gerton John, I wanna start with you. You’ve been with the shared services concept for a long time. You’ve seen Trump 1 and Trump 2. Tell us how their approach differs across the different administrations.

John Marshall Well, thanks, Terry. It’s a great question. We’re not really sure what the approach is for the current administration yet because they haven’t released a president’s management agenda, but we can get some signs from what we’ve seen out there and kind of reading the tea leaves a bit. But the first Trump administration had a very clear plan. It was announced in OMB Management Memorandum M-19-16 and included an innovative approach to creating a marketplace of shared services providers through four quality service management offices, or QSMOs, that were set up to manage financial management, human resources, cybersecurity, and grants marketplaces. Those were allowed to continue through the Biden administration. They weren’t really expanded or empowered very strongly or resourced, but they still have existed. But we haven’t seen the Trump administration, the second Trump administration, endorse or expand them. They seem to be continuing the financial management and grants. We’re not sure about cybersecurity and HR. So, a lot is yet to be seen. What we have seen from the new, the second Trump administration is a strong focus on centralization and consolidation of common services. They don’t seem to include some of the key features of shared services that we’d like to see, but they’re heading in a positive direction and we like most of what we’ve seen so far.

Terry Gerton Well Steve, let me turn that to you then because in addition to what John’s talking about the centralization approach, the Trump 2 administration has issued executive orders around acquisition, HR and financial management. Are you seeing that approach get traction in any particular way?

Steve Goodrich They are a little bit. As you know, GSA is also revamping the FAR and actually to include shared services within Section 8 of the new FAR when it’s issued. GSA is focused on procurement, OPM is focused on HR, Treasury is focused on finance. They all are starting to make traction in a centralization model, and they’re at at different levels or different stages right now. But they’re certainly getting there. OPM has their RFP out to try to develop a centralized approach for government-wide HR support services. GSA is pulling procurement into GSA more and more. And Treasury is at its beginning stages working with its QSMO actually to develop and make sure they have the systems and the foundation before they can start operations down the road.

Terry Gerton So John, in Trump 1 you made the point that there was a lot of it space for initiative and choice in the marketplace. Centralization seems to be pulling that back. Are you seeing agencies respond in a positive way?

John Marshall I don’t think we have really a lot of great feedback coming from the agencies yet. They haven’t been very communicative about their adoption or their plans for centralization to shared services. So a lot has yet to be seen. We’re kind of reading between the tea leaves right now and trying to determine how things are gonna sort out and what the agency responses will be.

Terry Gerton In market theory, markets will be more efficient than a centralization model. What do what do you have as an expectation here?

John Marshall Well, we have a lot of reasons to prefer a market-based approach because of competition, and particularly a marketplace would allow industry service providers to participate and compete with government service providers. We’re a little uncomfortable with the idea of just consolidating everything in centralized, government-delivered, government-operated functions because they tend to — over time they become monopolies and pretty bureaucratic. And so we like the idea of having a more open marketplace where competition can drive continuous innovation and customer choice and let the marketplace then sort out the winners and losers.

Terry Gerton I’m speaking with John Marshall. He’s the founder and CEO of the Shared Services Leadership Coalition. And Steve Goodrich, [who] chairs the SSLC board. So Steve, let me come back to you then. Shared Services Leadership Coalition has proposed a more competitive standard-based model. Tell us about that and how your proposal differs from what you’re seeing the administration currently implement.

Steve Goodrich Well, the administration is trying to move fairly quickly right now and with technology solutions, frankly, before they get processing governance and policy and data reform in place. So they’re moving out fast. The centralization model, as John says, may not be the optimal model to get there. What we’re proposing is a strong mandate for shared services. Because as you know, it’s come and gone from over the last forty years from administration to administration. And to get there, we need Congress really to mandate it so we can consolidate the common services across government to get there. Two, we need a strong governance structure to be able to operate, lead this across agencies and get the right mandates and security and systems and so forth and so on. Within that, we then need to do the right analysis and design of the right approach to make sure we’re consolidating appropriately, that we’re getting the duplication of systems and processes down and we can actually measure the outcomes that we’re getting to make it happen and then have an effective transition process.

Terry Gerton Tell me about your governance model. Who would be in charge of oversight there?

Steve Goodrich Well, our proposed model we have the OMB DDM as the policy director, if you will, for this and the authority. We have GSA leading the operations through a management center. And then there’s roles for the PMC, there is roles for the agencies advisory going through this as well. And you have the operating centers to make sure this is done and done right.

Terry Gerton Are you hearing from any of those agencies that they’re interested in taking on that governance role?

Steve Goodrich There’s — GSA would have interest in getting there. As you know, OSP, which has been drawn back over the years, was the original design, as the M-19-16 says, is the coordinating element. But our proposed legislation would actually give it the authority it needs, led by a commissioner within GSA for government operations with which to get there.

Terry Gerton So John, let me come back to you because you mentioned something in your last response that I think ties in with this governance piece. When you get a government centralized service function, it tends to become a monopoly, but it’s also really hard to invest in technology modernization. How would you see this centralization model staying current and actually addressing the service concerns of the federal agency constituents?

John Marshall That is a great question. And I think that the flip side of that question sets up the response that we would like to see, which is the marketplace, because if you had a marketplace with industry and government service providers, you would have continuous competition across the service providers and customer choice, which would — which should provide the incentives to drive innovation in the marketplace by all those providers. So it’s a really important feature that we think ought to be incorporated. And we’re concerned that government centralized services haven’t had access to appropriations or technology modernization funds for modernization. So we’re concerned that they would follow the example that we’ve seen too often of centralized service providers not modernizing, not keeping up and becoming non-responsive and antiquated over time.

Terry Gerton Steve, you want to follow up?

Steve Goodrich Yeah, I would. You can look at good models like Canada, Texas has done a pretty good job of developing partnerships with industry. And so that moves away from the traditional FAR firm-fixed price contract approach, where as technology advances, as process or new policies advance, the companies involved, the partnership involved are responsible for the implementation and bringing those two new technologies to the forefront without contract change orders and things like that, it’s built into the process.

Terry Gerton So Steve, as you look forward, what sorts of policy or legislative change is SSLC recommending?

Steve Goodrich So, it really tees off what I was saying before, putting a piece of legislation in place that mandates shared services, that sets up the governance structure, that ensures that there is metrics, both performance and outcome metrics that are measured and reported back to Congress and the President that involves the PMC in this process and builds the strong demonstrated consolidation of common services across government to save money, to improve data, to reduce duplication, to get us there finally with a modernized system of policy, process and data.

Terry Gerton So John, I wanna wrap up with you. Legislative change is sometimes an interesting windmill to tilt at, but in the absence of that change, if the administration continues with its policy of centralization, what should agencies and industry partners be doing to prepare for that?

John Marshall Watching and seeing what comes out from the administration and and following suit. But we we’d like to see more interest in Congress and it’s hard to get legislation passed in this area. We’ve been trying at this for 10 years. We’ve seen the history of legislation, the CFO Act, GPRA and so many other landmark pieces of management legislation. They take a long time and the incubation period is a long time. So we’d like to see industry working with us and agencies showing support for a more fundamental transformational approach like we’re offering. And don’t forget, Terry, what we’re proposing is a mainstream business model that’s used by 80 or 90 percent of Fortune 500 companies for managing common services. And the potential savings are tremendous. We’ve estimated $75 to $100 billion dollars in potential savings. So that’s really what’s on the table for the value, not just improved services for employees and for customers of the government and taxpayers. This is a great opportunity that the government shouldn’t miss.

Terry Gerton Steve, let me give you the last word.

Steve Goodrich Yeah, John and I like to joke sometimes that — and it’s true, it’s not a joke — for over 40 years we’ve been sitting in meetings around shared services with OMB and oversight agencies, and it ebbs and flows from administration to administration, or they just dance around the edges. A bill passed and signed by the president will finally give it the energy and resources it needs to move it forward.

The post Centralization is back in vogue, but is it the right model for government shared services? first appeared on Federal News Network.

Terry Gerton This might be a big week on the Hill. The House is planning to bring the National Defense Authorization Act to the floor for a vote. It’s obviously a topic we talk a lot about, but last week there were a lot of let’s just say, conversations about what might be in it and how it might go. So tell us about what’s going on behind the scenes.

Loren Duggan Well, this bill is a must pass piece of legislation. They’ve been doing it for decades and they always want to get it done by the end of the year. And this year there aren’t a lot of other end-of-year vehicles, so it’s kind of become an attractive venue for discussions about a number of issues. So that’s kind of what’s been going on. It’s probably less about the core part of the NDAA and more about some of the ancillary things or related things that people want to get in there or keep out of there as the case may be. We saw a particularly big dust up you might be referring to between Elise Stefanik, who’s a member of leadership, but was mad at her own leader, Speaker Mike Johnson, about trying to keep something out. And in the end they worked something out and that was getting resolved toward the end of the week. But that was just one of the flashpoints that leaders were dealing with trying to assemble this very important bill.

Terry Gerton It is normally a bipartisan bill. Is there a chance that, you know, that that’s not going to be true this time, even with the slim majority in the House?

Loren Duggan It may still be bipartisan because they do try to work things out. And, you know, sometimes the initial versions that come out of the House are particularly partisan because of riders or language that the minority party might not like. But they were reaching for consensus here. They were trying to get the four corners to agree on things before they went in. That’s the chairman and ranking member of the House and Senate committees, not just the defense committees in this case, but sometimes the other committees that had legislation that was in the mix. So they’re trying to get a bipartisan package that can get through because you might lose people on either side, but maybe you have the consensus you need to get something through. So we’ll be watching that vote counting very closely as they move toward the vote.

Terry Gerton Is there any aspect of the move forward on the NDAA that is also impacted by the hearings on the Hill last week about the counter drug operations in the Caribbean?

Loren Duggan Those two things seem to be on different tracks. I mean, obviously they’re related. It’s about the Defense Department and the defense secretary and what people might think there. But the legislation and setting policy is sort of moving in one direction, but some of the same players are also very much involved in reviewing what had happened with the ordering of these strikes and the chain of command and all the issues. We had the members watching the video over on the Senate side and reacting to that last week. I think that will continue. It may be brought up in the context of the debate or larger questions, but I think the bill will move regardless of that. And Congress can — because they do this every year — revisit it in next year’s NDAA or perhaps in other legislation because we’ve already seen members talking again about maybe war powers or other things they might tap into there.

Terry Gerton Well we’ll see how that comes about. But speaking of votes, there is also supposed to be a vote in the Senate this week on the health care premium subsidy extensions. What’s the prognosis there?

Loren Duggan Well, this was part of the agreement to reopen the government was that there would be a vote by I think December 12th was it, so Friday, on some sort of vote around the ACA extensions that are expiring at the end of the year. Chuck Schumer, the Democratic leader in the Senate, said he’d aim for a three-year extension, which would take us obviously beyond the next election. That’s a different proposal and one of many proposals that are floating around. We’ll be watching to see, does the GOP answer with their own proposal, and what does this mean for the House, if anything? So, going toward the end of last week, there was still no consensus on how this would be fixed. It will have to be bipartisan, obviously, to get over the line and we may not be there by the end of the week. But maybe we’ll have some discussion and votes ahead of that.

Terry Gerton And Mike Johnson’s trying to put a package together on the House side as well, right?

Loren Duggan Right. And there’s more than just the ACA being talked about here. There’s health savings accounts ideas or other things that members might want to pursue. You kind of got this short term issue of, what do you do with the subsidies for next year, but then there are a lot of people who are trying to bring in, what does this mean overall about the Affordable Care Act, the nature of the markets, does there need to be a broader sweep of changes? … There’s not really consensus on anything broader than this. And we’ll have to see if there can even be consensus on the smaller question of what to do with the subsidies.

Terry Gerton I’m speaking with Loren Duggan, deputy news director at Bloomberg Government. Well, Loren, at this time of year, every time we talk, we talk about the status of the rest of the appropriations. Shutdown, or [the] continuing resolution expires at the end of January. What are you seeing in terms of the move forward on the other bills?

Loren Duggan I’m sort of seeing a kind of a whimper on that going into the end of the year. To be honest with you, January 30 is a long time away. There’s been a lot of talk about what would be in a next minibus package that the Senate might consider, but that hasn’t been moving forward. Votes haven’t been scheduled. And without that sort of end-of-the year deadline or mid-December deadline that often drives that activity, they have more time, and usually work expands to the time allotted. And I think we might see that here. So, not clear that we’ll get more votes by the end of the year on that. There are a lot of issues they’re trying to work through. But that will be, if they don’t do it now, obviously top of mind when they return in early January, ’cause the clock will be ticking.

Terry Gerton Loudly at that point. A different topic, and we don’t cover the court very often, but there’s a very important case on the Supreme Court docket for today dealing with the president’s effort to fire a member of the Federal Trade Commission. Tell us what your team is watching there.

Loren Duggan Well, part of our organization is Bloomberg Law and they cover many court developments around the country and certainly at the Supreme Court. They’re watching this very closely because it has huge implication for independent regulators. As you mentioned, Kelly Slaughter, who was a FTC commissioner, was fired by the president and has had a court battle that’s now reached all the way up there. And it goes back to a precedent called, I think it’s Humphrey’s Executor — which there are many people in this building who are far more versed than I in that. But it’s gonna be closely watched because what is the nature of an independent regulator? What is their power vis-a-vis the rest of the executive branch? Big questions there that have effects on a lot of different institutions, and therefore a lot of different regulated entities by those institutions. So we’ll be watching the arguments and then the decision whenever that comes will be very closely watched.

Terry Gerton So what else are you watching for the coming week?

Loren Duggan Well, we’re watching the Senate try to move forward on another batch of nominees. I think it’s 90 or so. They tried to do it last week, but there was a procedural hiccup, so they’re starting over. But that would be, if they could get that done, another 90 Trump appointees on the job by the end of the year, which Republicans would like. And we’re also watching hearings. There’s a lot of other nominees going through and there’d be a flash of celebrity. Gene Simmons of KISS is actually scheduled to be up on the Hill. So we’d be watching to see what he brings. Always interesting when you have kind of that celebrity star power trying to shine light on an issue.

Terry Gerton That’s a hearing near and dear to the heart of radio broadcasters everywhere. So we’ll be watching it as well.

Loren Duggan Excellent.

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