Terry Gerton PopVox has been advocating for a long time for a number of reforms to congressional operations. Three have kind of risen to the top of your stack lately. Talk us through what those three are and how you think if they pass, they would improve congressional operations?

Danielle Stewart Beginning of this year at the beginning of the appropriations process, we spoke with offices on both sides of the aisle to advocate for recommendations and reforms in the legislative branch bill text that would address the pacing problem. And that is everything from AI training to caseworker office support. And the way that we have been able to work with offices and continue this work over many years really speaks to the continued need in the House to prioritize these items, but also we’ve been able to prioritize them and champion them because there have been members that have been alongside us working towards these reforms as well. And so the importance here is that modernization is an ongoing project for the legislative branch. This is something that’s personal and important for me because I was a staffer on the Select Committee on the Modernization of Congress in the 116th Congress when the committee was first stood up. As a then-House staffer, being able to work with our member offices to advance over 100 recommendations on a bipartisan basis to deliver that final report in what was then still a very divided Congress really speaks to how meaningful this work can be for people. And so there was a second select committee in the 117th Congress. And last Congress, the select committee was enveloped and turned into a subcommittee under the Committee on House Administration. And so that subcommittee has helped to continue that work on a bipartisan basis and has continued to work with us for Congress to have improved technology and a better resourced workforce. And so getting back to what was included in the ledge bill was the highlighted importance of AI training and continued use of AI tools in the House. The continued emphasis on the need for caseworkers to have access to better resources and better tools, which we are seeing in what’s called the Case Compass Project. And a congressional liaison directory, which is housed and managed by the Congressional Research Service, which also helps, speaks to supporting staff and ensuring that they have the tools they need to better do their jobs, which in turn they can better help their constituents and provide results for their districts.

Terry Gerton I’m speaking with Danielle Stewart. She serves as the PopVox Foundation’s advisor for congressional initiatives. Danielle, let’s take each one of those in turn. The data map or the legislative branch data map, what would it really take to implement that now that it’s in law? And how will it change how the congressional offices operate?

Danielle Stewart Sure. Yeah, that’s a great question. So I believe last Congress, they started the process of, of starting to put this together, at least within the House. We have said, and we’ve advocated for a full legislative branch data map, which would include all of the agencies in addition to Congress, right? So not just Congressional offices and everything within the Congressional complex. It would include GAO, CRS, Library of Congress. Everything that you see touched sort of through that legislative branch operations umbrella. There’s no complete map showing how the data flows through each of these branches or agencies through its life cycle. So this isn’t something that necessarily each member office or each congressional staffer would need to sort of think about or manage. This is something that is more of an institutional entity and in what would need to be managed at the technical level. But data maps at their core are, you know, visualization diagrams of data ownership formats, where the data is being transferred and they help an organization better understand the who, what, when and where of data to be able to maximize use and ensure its security. And so included in the legislative branch bill was language — or, the bill report — was language highlighting the need to continue putting this data map for Congress together. And so that is in the works, we’re very encouraged by that. It’s being increasingly, become increasingly essential as government entities begin responding to the emergence of AI and other technologies. And so, that is something that was certainly a priority for us, and we were encouraged to see the language included.

Terry Gerton Talk to us about Case Compass because that’s really interesting in terms of getting a more synchronized picture of how constituent offices are working.

Danielle Stewart Yeah, Case Compass, we’re incredibly excited about this project. And a lot of credit goes to my colleague, Anne Meeker, who is a former district staffer constituent services representative, and this is a real passion of hers. So the Case Compass project is, we’ve seen the development over the last couple of years. Right now, 50 member offices have opted into the pilot project. And what the pilot does is it anonymizes and aggregates constituent casework data. And the data then feeds into Case Compass. And so Case Compass itself is a dashboard that we have championed to track this data to be able to identify systemic issues and areas for improvement within the federal government. And so this helps caseworkers at the local level, better understand agency trends, they get to have potential issues or concerns within their districts. And also, caseworkers as PopVox Foundation has learned and helped really cultivate through a lot of Ann’s work — caseworkers are some of the best, well-connected congressional staffers because they see and hear everything that’s going on on the ground in these districts. And they are able to talk to each other and help each other regardless of party affiliation. And that is something that has always been worth celebrating and worth supporting. And so continued resources for caseworkers through this Case Compass project, this is a bipartisan achievement. The report language encourages continued development of the project. And through this project, Congress will be able to have the data to act when caseworkers see trends or issues. For example, you know, a couple of years ago, I think you probably remember, there was a huge, huge uptick after the COVID pandemic in passport delays, passport processing. And being able to get ahead of that, ahead of time, while caseworkers are being able to see sort of this creep up of these cases coming in, being able say, hey, red flag, we see this is happening. How can we get ahead of it and try to provide more resources to fix the problem, or to speak with the agency head and identify ways that we can work together to better support the American people. So that’s a huge win, and it’s better inter-branch communication and coordination, which is critically important.

Terry Gerton That makes a lot of sense. And it seems like the third initiative is closely related to that, a congressional liaison directory, maybe to help those awesomely connected local case workers stay even better connected.

Danielle Stewart Yes, and this is, I’m simplifying this tremendously, but I always, when I think about this one and I read about it in our materials, I always think about it as like a mega yellow pages for caseworkers, just a giant, beautiful phone book, which you would be disappointed and shocked to learn does not really exist. Like, you know, I have been able to open multiple freshman member offices and when you walk in the door and you open a district office, you’re not handed a packet of agency contacts, who to get in touch with at the VA, who to call if you have a Medicare question. Those contacts, they are available, but it is not as easy as a Google search. And so CRS maintains the only extensive list of congressional liaisons at executive branch and independent agencies. But the scope of casework is bigger than just those executive branch agencies as you would think of executive branch agencies just being here in D.C., right? There are D.C.-based liaisons, but regional contacts, processing center contacts and more. And so the language in this year’s report requests that CRS examine the feasibility of expanding this list and the appropriations committee will be working with them to do so. So that is huge. And the more resources that caseworkers and district staff and congressional staff as a whole have to better do their jobs, or more efficiently and effectively do their job, the better the service and representation will be for constituents.

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Interview transcript

Terry Gerton Before we get into the case that we’re going to talk about today, can you give us a rundown of the difference between the Trade Agreements Act and the Buy America Act, because that plays into the case we’ll examine.

Dan Ramish Absolutely. So there are two domestic sourcing regimes that apply to government contracts, the Trade Agreements Act and the Buy American Act. And generally, the line between the two statutory regimes is dictated by the value of the procurement. So the Buy American Act applies to contracts that are below the free trade agreement thresholds. The most notable one is the World Trade Agreement Government Procurement Agreement, or WTO GPA, which has thresholds of 174,000 for supply and service contracts and then 6,708,000 construction contracts. The sort of basic difference is, of course, the Buy American Act has been around a long time and establishes preferences for American-made goods. The Trade Agreements Act kind of came in with the free trade movement and established equal treatment for trading partner countries. And there are also a number of other so-called designated countries, mostly developing countries. And the products of those countries can also be used along with domestic products. But there’s a critical point on how these two frameworks are applied, which is that the Buy American Act institutes a price preference, whereas the Trade Agreements Act prohibits procurement of foreign products that are not designated countries.

Terry Gerton Sounds like it could be a pretty confusing space for contracting officers, so I think it will be helpful to walk through this case. The Veterans Affairs Department was engaged in buying medical supplies and pharmaceuticals. Tell us about this particular case.

Dan Ramish Yes. So the procurement was for a drug called Prasugrel, which is a blood thinner that’s used to reduce risk of heart attacks and strokes. And the prasugrel was available to the VA on Cosette’s federal supply schedule contract and also on an open market basis. But the agency wanted to establish a standardized contract to obtain volume discounts essentially and have set prices that it could rely on and anticipated that the contract would be used both by the VA and also by other agencies, the Department of Defense and Indian Health Service and the Bureau of Prisons. And so they established in the solicitation fixed price indefinite delivery requirements contract that was gonna have a base year and four option periods. And so, they put this out for bid, Golden State Medical Supplies proposed a generic version of the Prasugrel drug that was manufactured in India. And India is not compliant with the Trade Agreements Act, they’re not a trading partner, not a developing country that is a designated country for TAA, so non-compliant with TAA. Cosette Pharmaceuticals proposed to supply a brand name version of the drug that was much more expensive. And their drug was manufactured in Germany, the active pharmaceutical ingredient was from Japan. Now, in some cases, they’re questions about which is the actual country of origin for Trade Agreements Act purposes, but both Germany and Japan are TAA compliant countries. So that wasn’t an issue. Everyone agreed that Cosette’s drug was compliant with TAA and Golden State Medical Supplies’ drug was not compliant. And there were a number of other drugs also from India that other offerors supplied, all generic. So the VA decided to award to Golden State Medical Supplies. They argued that the Trade Agreements Act exception applied because Cosette’s price was excessively high and they argued that the offer was therefore insufficient to fulfill the government’s requirement, which is one of the narrow exceptions of the Trade Agreements Act.

Terry Gerton I’m speaking with Dan Ramish. He’s a partner at Haynes Boone. So Dan, if you’re the contracting officer and you’re looking at this wide differential in prices, how would you know to make a choice one way or the other?

Dan Ramish Well, so the solicitation in this case was lowest price technically acceptable. So of course, the VA wanted to get the, you know, the lowest available price for these drugs, they’re standardized. And so it was understandable. And I think the court certainly saw where the agency was coming from in trying to get a good deal for the taxpayer. However, the court said, well, you have to look at the language of the statute and this exception for offers where no offers are received that meet the government’s requirement isn’t intended to encompass price. And in part, the court looked at the difference between the Buy American Act, which does actually specifically have an unreasonable cost exception, and the Trade Agreements Act, which only says, well, if you don’t receive any compliant offers or offers that meet the government requirement than you can procure from foreign sources.

Terry Gerton So the Court of Federal Claims sided with Cosette, the more expensive one that met the Trade Agreement Act requirements. What did the court say specifically about VA’s interpretation of the Trade Agreements Act?

Dan Ramish The VA’s approach was, in one part, to say that it was making use of this insufficiency to fulfill the government’s requirement exception. They also essentially excluded Cosette from the competitive range because of their price. And the court said, well, that approach wasn’t appropriate and didn’t comply with the Trade Agreements Act because you’re not allowed to effectively compare the price of a compliant, Trade Agreements Act product with non-compliant products, that that’s an apples to oranges comparison, and that that couldn’t be a valid basis for excluding Cosette from the competitive range.

Terry Gerton So does that mean that government agencies are locked into buying these really expensive products if they’re the only TAA compliant option? Do they have other choices? What did the court say about that?

Dan Ramish So the court pointed out that the statute, among other things, includes the option of a waiver issuance by the agency head, which is available on a case-by-case basis when it’s in the national interest. There was no waiver here. So the agency, if they felt there was a compelling interest, could have the agency head issue a waiver. They also could cancel solicitation, issue the drug, solicitation on the open market. And so they weren’t locked into making an award. And of course they needed to establish that there was a fair and reasonable price that they were paying for the award, but they couldn’t ignore the requirements of the Trade Agreements Act and award to a non-compliant offer when there was Trade Agreement Act compliant offer that was received.

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Interview transcript

Terry Gerton Anthropic says Chinese hackers used its Claude chatbot to automate a cyber espionage campaign against tech firms, financial institutions, and government agencies, marking what could be the first large-scale AI-driven attack. Joining me to explain what this means for defenders and what’s next for nation-state tactics is the former department head of AI security at MITRE and co-founder of AI security consulting firm Fire Mountain Labs, Dr. Josh Harguess. Dr. Harguess, thank you for joining me.

Josh Harguess Thank you very much for having me.

Terry Gerton We’re going to talk about something that really made the news not too long ago. Anthropic said that its AI tool Claude was used by Chinese hackers with minimal human intervention to launch a cyber espionage campaign. Can you tell us more about what really happened?

Josh Harguess Yeah, I can. So a really nice report that they lay it out, really detailed, but some of the high marks. So they used Claude code to do this. So this is Anthropic’s own tool that allows you to sort of, you know, vibe code as it were, and create a code that was able to do these exploits. And by create, what I mean is they were able to execute something like 80 to 90% of these operations completely independently from human interaction. That 10 to 20% was sort of like human-on-the-loop, human-in-the-loop verifying, validating some of the things that came back from Claude code, like hallucinations  things that weren’t actually real, but there were plenty of exploits that were real, that were able to execute without any human intervention. And they really did this by doing these safeguard bypasses, things like social engineering, so doing prompt injection techniques, these kinds of things, convincing the tools that they were using. That everything that they’re doing was on the up and up. You know, no issues, don’t worry about what we’re trying to do. This is, you know, we’re security professionals. We’re trying to secure our own infrastructure, our own networks. So you’re doing us a service by providing this code to us. And yeah, the breach was, this was a campaign. I think they started to notice this maybe back in September. So they were able to kind of follow this campaign and eventually disrupt it.

Terry Gerton You mentioned some things like prompt injection and social engineering. Tell us a little bit more about how those were able to bypass Claude’s safety guardrails and what that means for the average person who might be a victim of some of this approach.

Josh Harguess Yeah, absolutely. So this has been around since ChatGPT Was released, so essentially these are ways to convince the model to do things that it’s not supposed to do. So particularly over the past two or three years, OpenAI, Anthropic, Google, they’ve spent a ton of money on trying to build in these safeguards so that you can’t get instructions for how to make a nuclear weapon or how to do other nefarious things that these models, they don’t want you to be able to do. However, there are ways around this and we’re seeing this even with today’s models. It’s more sophisticated. It’s not as easy as some of the early days where you just say the word poem infinitely and then it spits out user data. So now you do have to dig a little deeper. You have to do what’s called maybe crescendo attacks. You have to, you know, sort of aggregate different attacks together in order for this to be successful. But these models are all susceptible at some point to this kind of prompt injection technique.

Terry Gerton It sounds like you and others with your expertise might have been expecting something like this to come along. It’s not just something that woke up overnight.

Josh Harguess Definitely. Absolutely. We’ve been sounding the warning alarms about this for many years So it’s very well known and really that awareness piece is number one. I mean, I think a lot of people, to your point, are going to be very surprised that this is even possible

Terry Gerton So tell us more about how that 10 or 20% of human interaction played in with the cyber attack.

Josh Harguess Yeah, definitely. So, yeah, it’s interesting. So we’re not at the place where you can just say, go execute all of this for me, actually execute the campaign, you know. Get back to me in a few days when you’ve actually been able to recover these credentials and get into accounts and all that kind of thing. So right now we’re still at the phase where, you know, there’s a certain amount of trust for these models to do something that you tell it to do. And this is in, you know, your everyday task. If you’ve ever tried to write a summary of an article or something like that, you know, you’re not always gonna get 100% of what you’re expecting out of these models. So there’s some amount of human-on-the-loop or human-in-the-loop to kind of validate and verify what you are getting back. And this is no different. So, you know some of the things that came back were, you know, code that didn’t run or code that actually didn’t do the task that they were trying to do. So it was very much breaking the problem up into smaller pieces. Executing those small pieces, validating that they worked, and so on.

Terry Gerton I’m speaking with Dr. Josh Harguess. He’s the former department head for AI security at MITRE and co-founder of the AI security consulting firm, Fire Mountain Labs. The organizations that were targeted in this cyber attack, everything from financial institutions to tech companies to chemical manufacturers and government agencies, these might be the folks that you would expect to have the most resilient defense. How did they fare?

Josh Harguess Yeah, I mean, it’s difficult to protect yourself against the unknown, right? So I think a lot of these organizations, like you mentioned, they will be doing their best to protect themselves against kind of known adversaries. So they’re protecting their data, they’re protection their identities, these sorts of things, but they’ve never seen something this sophisticated kind of come at their infrastructure, and so quickly. So I think a lot times in the past if they saw a campaign like this, and it was human operated. They would be able to sort of see the signals and be able to react. In this case, the campaign was so fast acting that they weren’t able to react in time. And I think that’s really the escalation of these types of attacks.

Terry Gerton What does that mean for AI defense or hacking defense going forward? If the hacker is AI powered and can adjust so quickly, how can the defenders meet that kind of attack?

Josh Harguess Absolutely, so we’re definitely getting into that space that we were fearing in the beginning where we’re going to have to use AI tools to help us defend against these kinds of attacks. And not just these types of attacks, probably all attacks. The same exact thing is going to happen though where you’re going want to defend yourself against attacks using AI, however, that AI may not do exactly what you expect it to do all the time. So it’s the same kind of back and forth. You’re going to need a human-in-the-loop, human-on-the-loop to sort of validate, verify these defenses, check in, make sure that they’re operating as they should. These are the kinds of things that we do as a consultancy, help folks through this. So, you know, how do you secure your own AI systems? That’s a big question mark. That’s what we help people through. And you have to be able to secure your own AI systems before you can use them for these types of defenses.

Terry Gerton If AI is attacking and AI is defending and all of that is happening at machine speed, what is the risk — what are the vulnerabilities there and what is risk of escalation?

Josh Harguess Yeah, absolutely. So same as we kind of talked about earlier, you have to break the problem down into kind of consumable pieces. So look at your entire ecosystem of defense. Where can you instantiate AI? One place that’s really obvious is attacking yourself. So firming up your own defenses by pretending you’re an adversary. So red teaming your own system using these tools before someone else on the outside does that.

Terry Gerton As you look forward, what does this mean in terms of nation-state relations? How do nations prepare and how does this change the threat landscape?

Josh Harguess Yeah, certainly. So there’s multiple ways of looking at the changing of the threat landscape. My co-founder likes to talk about this in terms of these three words, intent, opportunity, and capability. Intent, that’s not really going to change. There’s always going to be bad actors that are trying to do nefarious things. Opportunity, that’s certainly expanding. So as these AI models and these AI agents kind of dig deeper into our digital infrastructures, we have new avenues for exploitation. So, you know, in this case, it was the social engineering way of getting into the models. There’s going to be other ways of getting in in the future that we’re not aware of yet. And then capability, that’s really the big one here. You know, AI is the force multiplier in this case, and that’s what we need to be utilizing, but also securing for our own systems.

The post When hackers weaponize AI, the rules of cyber defense change overnight first appeared on Federal News Network.

Terry Gerton There’s been a lot of talk lately, certainly from lawmakers, from senior military leaders about the topic of lawful and unlawful orders. Describe the current situation from your perspective.

Frank Rosenblatt Well, military members have special license to use violence in armed conflict but this license is not unrestrained. Otherwise, we would just have mobs working. So a professional armed force really depends on discipline, and a key ingredient of discipline is obedience. So military members, have to follow orders. If you don’t like what your boss says at Starbucks, then they can fire you, but they can’t prosecute you. It’s different in the military. There are consequences if you don’t obey what your superiors tell you to do. But at the same time, this doesn’t work like they tried to do at Nuremberg, where I was just following orders. We do not want or expect our military members to unthinkingly obey, so orders are presumptively lawful that they receive, but they also have a duty to disobey any orders that are manifestly unlawful.

Terry Gerton That can be a tricky situation in execution. Describe for me or define for me what makes an order lawful or unlawful.

Frank Rosenblatt Well, the standard of manifestly [unlawful] is that an ordinary person of reasonable sense and understanding would know right away, I’m just not allowed to do this. And the classic example people think about is the My Lai massacre when Capt. Medina supposedly told his lieutenant, Calley, go clear the enemy out of there. Lt. Calley then did his translation of this and said, kill everyone. And the soldiers who worked for Calley should have known. I think it’s helpful to look beyond the Calley example because I think the reality of orders is more complex. There’s a story about a dog handler at Abu Ghraib. He was trained in the use of the military working dog, but he was told by his superiors when he worked at the prison, we need you to derogate from your training a little bit. We want you to use these dogs to help us with interrogations and to scare the prisoners. And so he thought, sure, I’ll go ahead and do this because my superiors are telling him to. It’s questionable whether everyone in that situation would have said, I know this is wrong. But looking years later, the military court looked and said, nope, you shouldn’t have obeyed that order. It’s manifestly unlawful.

Terry Gerton So how does that differ from a personal disagreement? I don’t think that’s the right answer, but maybe it’s lawful, maybe it is not. How does a service member decide?

Frank Rosenblatt We do see this. Matters of conscience, religious belief, or politics are no excuse. You must follow the orders even if you don’t like the president, even if you find the mission to be wrong or even distasteful. We’re seeing a lot of this because, Terry, I work with an organization called The Orders Project. It’s ordersproject.com. It is part of our national institute. And we receive calls from people who have questions about their orders. And here we see the spectrum. People say, what if I’m asked to do this? Or I’m told that we’re going to Chicago. What should I do? And so the National Guard deployments are very interesting because the legal status of them changes by the day. We just saw a new decision on the National Guard deployments in Los Angeles. So let’s say we get a call from someone who says, I’m being told that I’m going to deploy to Chicago in a couple months. It would take a crystal ball, not legal analysis, to say that’s going to be lawful or unlawful. We just don’t know how the courts will decide. So in that hypothetical, we would say you do need to plan and go on this mission unless you have an opportunity to not re-enlist. That is something that you presumptively will have to do, even if deploying to Chicago wasn’t the reason why you decided to join the military.

Terry Gerton I’m speaking with Professor Frank Rosenblatt from the Mississippi College School of Law. He’s a recognized expert in military justice, a former U.S. Army JAG officer, and president of the National Institute for Military Justice. Frank, you were talking there about a situation where a service member has some lead time between what they’re being told they’re going to have to do and actually having to go do it. In some of these operations, though, they’re making decisions in real time. So what should folks be thinking about? You know, if they get an order to fire and they have seconds to decide whether to do that or not.

Frank Rosenblatt This is really happening. And I’ll tell you one scenario that people talk about that’s based on reality. Let’s say a senior elected official says, I want you to shoot protesters in the legs. Then you would think and know, OK, that’s not lawful. But it’s not as easy as that. Because if you say, sir, that’s  unlawful, that might just pull you out of the picture and not be part of more consequential decisions. So that person does not have time to call a lawyer. And it’s really a test of their own judgment and mettle. What we would not expect would be direct compliance with that order. We think maybe we could seek clarification or interpret this in a way and give guidance to subordinates that excises that illegal element. You could take that and then translate that as we need to demonstrate our presence. We need to comply with the law. In other words, I’m saying that there are times when military members should disobey orders.

Terry Gerton Typically, it’s going to be a senior official who’s making the decision. We don’t necessarily rely on the junior operator to make this call in live action. But if they do refuse an order that later turns out to be lawful, or they execute an order that later turned out to unlawful, what are the repercussions?

Frank Rosenblatt This is why it’s so tricky. It’s really a high wire act that we’re asking our military members to do. We are putting them in legal jeopardy when we are boundary pushing in how we do military operations. On the one hand, if you push back on something and you don’t comply, and it turns out that was a lawful order, then you’re going to face consequences for that disobedience. Everything from administrative sanctions to being removed from your job, possibly even a court-martial. But if you do something that you find out later is unlawful, you can also be punished for that.

Terry Gerton So what is the role of the Orders Project in helping to clarify this really complicated conversation?

Frank Rosenblatt This topic obviously has received a lot of nationwide attention lately, and what that means is there are a lot voices out there that represent different religious beliefs, political beliefs, and they’re saying is we want to help soldiers. Sometimes they’re urging disobedience. That’s not what we do. What we’re trying to do is, you know, the National Institute, we’ve been around since 1991, we’re a collection of military law experts, and we want there to be some sort of source that is authenticated that military members know that when I call this, I’m going to get it straight. I’m gonna hear from somebody who, you know, thumbs through the judge’s bench book, the manual for courts martial, and can actually tell me and give me sound legal advice that’s actually based in military law and not based on, you know, some other agenda.

Terry Gerton I think we haven’t heard the end of this conversation, we’re going to continue to follow through on it. So are there reforms or education efforts that you would suggest that could help military service members, political appointees better understand the issues that are at stake here and make the right call from the beginning.

Frank Rosenblatt What I would like to emphasize is, you know, I’m a law professor and a former judge advocate, but I actually want to de-emphasize the role of lawyers in this. I think that the issues with orders come when we ask people on the fly to do something that they haven’t had the time to think through, rehearse, and train upon. I think these issues, Terry, of lawful and unlawful orders come down to if it’s not a legal briefing that’s going to solve everyone’s questions. But when they can practice and build their expertise and competence and see where the boundaries are of their behavior. Every time our military goes to do something, whether that’s operating in cities in Iraq or now in these boat strikes in the Caribbean, if we have the chance to practice this and work through contingencies, then our military members will be emboldened, they’ll be more confident, they’ll know exactly what the right and left limits are.

Terry Gerton It feels like the military is being asked to push a lot of boundaries right now. Would you say from your perspective, we’ve been in situations like this before? Are there lessons we can learn from the past that would help us better define the space right now?

Frank Rosenblatt When we think back to 9/11, for example, there was a strong demand to immediately begin military operations. And there wasn’t really a lot of chance to rehearse this and to know exactly what we were doing and to integrate all of the different perspectives. But I do think what’s important in this is that we have a process. At every military operational command, there are staff officers who each bring a different level of expertise. There are commanders who are trained. If we let them function, let them do their jobs, and we do this without trying to rush people or without political interference. Now sometimes we have to respond to emergencies and there isn’t that time. But we should trust and we should have a lot of confidence in our military members and our commanders. They want to do the right thing. Let’s give them the tools and the opportunity and they won’t let us down.

Terry Gerton Where do you hope this current discussion of lawful and unlawful orders takes us? What do you think the outcome will be?

Frank Rosenblatt In some sense, the temperature has been awful hot on this, and it’s not really, I think, wise for this to be a political issue. And actually, if you listen to Republicans and Democrats, they’re largely saying the same message about this, but they’re not trusting the motives of each other. But maybe the bright side of this, the opportunity here, is the attention on this will give a greater appreciation for the difficulty that we put military members in when we rush them to do things, and when we are really pushing the limits of what we have done before, whether that’s boat strikes in the Caribbean or National Guard deployments in cities.

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Terry Gerton We touched base with NobleReach back in the summer. How is the program going and what are you learning from your first placements?

Arun Gupta It’s a great question, Terry. We’ve now had two cohorts, one that’s gone through and completed the program and one, second one that we’ve launched. We just had the second one back for their first quarterly session  after being placed. And so let me give a little bit of context. the first one was entirely federal. So they were all in federal agencies across eight federal agencies, including Space Force, Navy, Commerce, CISA, HUD, FDA. And then the ones in our second cohort, as I talk about them, we’ve expanded into state and local as well. So they’re across 10 states. In the first one we had about 20, in the second one we have about 30. So in that context, with the ones that have gone through it, the first ones and have completed the program, I will say one can have a theory on the case about how it can change people’s lives, how it could change their perspective. It’s another thing to see it in action. You know, what we learned was the following. Look, this first cohort was there during a transition between administrations. So they started in the previous administration and obviously ended in this one. And what they found is that they were welcomed by both. They actually visited the White House with both administrations, and that’s a subtle but powerful thing to see, feel, and hear. That the idea of tech talent coming into government is not a political thing, it’s something that … is what’s good for the country. Second, I think what they all saw as well is that the kind of work and the types of problems that they were getting to work on were far more interesting and stimulating than when they looked at many of their peers at some of the more traditional kind of coming out of school jobs. So much so that when we talked to them after the cohort about how many of you want to stay in public service, over 80% of them were like, you know, they would to continue in public service in some capacity. So what we saw with this group is, you know, point one is that both administrations really welcomed them in the work that they were doing. Second, what they saw was the types of problems that they’re getting to work on were far more interesting than what they would see with their peers that are in the more traditional jobs, so much so that 80% of them continue wanting to stay in public service in the near term. Third, what we really saw with them as well was a sense of community. The importance of not just, you know, I think if each one had gone into their own agency on their own, it would have been a[n] okay experience. What made it really transformative was being part of a larger community as well, so that they can compare notes as to like, well, what’s Space Force doing versus Navy? And take those learnings back into the office. And I think that’s an important piece of it. Fourth, the mentorship that they got was greatly appreciated. And they talked about that and they talked about it in the context of not only mentors that were in public service, but a lot of the mentors that we assigned them or aligned them with had careers in both public and private. And I think that was really important, Terry, because I think they really noticed and saw that they’re not making a decision for life, but these are experiences that they are having and how they can benefit them over the course of their journey. Again, a very subtle but important aspect of like how we change the perception of coming into public services, not being something that you’re having to commit to for 30 years, but something that can be part of the fabric of your career journey.

Terry Gerton So you’ve talked to us a little bit about how the participants felt and what they learned. What kind of feedback did you get from the agencies? And can you talk a little more about some of the specific projects that your first and second cohorts are working on?

Arun Gupta Yeah, you know, look, I can give you the high-level kind of  work that they did. You know, we actually do a net promoter score. And so we take it seriously to see like, how are the agencies looking at what we’re doing? And in that context, you now, they were off the charts and all the agencies came back very strong with what they really appreciated was being done with the work that was being. But more importantly, not only with their capability but with their attitude. And, you know, there’s an interesting anecdote … with a couple of people in Space Force. The problem their team was trying to address had been addressed at Navy. And the team at Space Force didn’t have contacts at the Navy, believe it or not. But our scholar, you know, knew one of our scholars is at the Navy and reached out to him. And they then connected and then, you know, weeks later you had those two groups collaborating on a somewhat meaningful project. And I say that because, you know, with that, you can create a level of collaboration that is an unintended benefit to what happens. And that’s what we saw. Justin Fannelli, who’s over at the Navy and the CTO there — he and I just did a panel with them at NDIA to their board. And we had one of our scholars there that worked with them and, you know, the work that he was getting to do and the fact that, you know, Justin now takes the scholar to all his AI meetings, right? You know, sitting down with three star generals and talking to them about what they’re doing to the point where, you know, other groups and agencies go like, how do I get one of them? Right. And when I say one of them, it’s not only, again, someone that’s versant and capable in technology and AI, but it’s also someone that has this sense of mission and purpose, and is looking to marry that with that capability and curiosity, right. And so they can ask some of the more obvious questions and that could be curious around like … Why do we do things this way? You know, which can be very simple and very basic, but at the same time can be profound when you can say like, oh, if we used AI, we don’t need, we could do it this way, right? And so it’s beyond even just the projects. It’s inculcating a different way of thinking.

Terry Gerton I’m speaking with Arun Gupta, he’s CEO of NobleReach. The problems that you’re talking about are things that the OPM director, Scott Cooper, has himself spoken about recently, hiring more tech talent, making it easier to move between private sector and public sector and back again. How is NobleReach in this scholar program working with OPM to really tackle some of the institutional barriers that make that mobility hard?

Arun Gupta That was a great question. And look, we’ve … been collaborating with Scott and his team and think highly of the way that they’re thinking about, you know, the talent issue and how we can support that. And, you know, what we’ve seen is that there’s an alignment around a vision that we have to change the narrative that people need to think about coming into government for, you know, 30 years, but they can come in for two to three, much like we have Teach for America and have a profound impact not only on them but then on the organization as well. And so you know ways that we’re collaborating and talking about things is just sharing the learnings that we’ve seen, you know, because we’ve had the benefit now of two years of being out there with programs seeing what works for the students. You know, like what it meant, the types of mentors, even not even just having mentors but which ones work, which ones resonate, right? What do you need to see in the agencies? You need a city that makes an experience a really meaningful one for the students. You know, we call it the scaffolding. But what is the scaffold? It’s not only connecting them to the job, but it’s supporting them while they’re there. And how do we build that community? A big lever for us here is that it’s not about a transactional recruiting connection to a young professional to a job. But it’s building a broader community of what we call dual citizens, public-private sector citizens. Right, people that have had experience in both the public and the private sector, that can speak the language of both, that have, you know, understand the culture of both. But then over time have networks in both. And thereby we rebuild trust because they’re trusted in both areas. And so I think, you now, those are various ways that we’re collaborating with Scott. You know, being able to identify which agencies can benefit from tech talent today, the kinds of projects that we can leverage and I think the interesting thing is, and he’s been a great partner here is, people assume that the bottleneck is getting young professionals to come in and it’s not what we’ve seen in our numbers as we’ve been recruiting is that young professionals want to serve, they want to be doing something meaningful right now. I think there’s a lot of change taking place in society, geopolitical, technological, environmental. And this is a group that’s lived through COVID. And I think when you have that kind of change and the ground feels unsettled, you don’t focus as much on yourself, but you reach out to others for stability. And I that’s what’s happening. And so in that context, I think where Scott and his team can also be helpful is helping us identify the agencies. Because right now we’re doing that relationship by relationship, but being able to more broadly go to agencies and saying, You know, look, we really think this is important.

Terry Gerton So what’s next for NobleReach? You’re talking about cohorts in the numbers around 20 or 30. Do you see a massive scaling up to classes of 100 or 150? New agencies, new exposure? What’s next?

Arun Gupta Yes and yes, Terry. You know, I think, look, our North Star has always been to scale. Our end game isn’t to have 20 or 30, which is nothing wrong with that. I just think if we want to have impact, which is what we’re trying to optimize on, scale’s important. So, you know, I think in this upcoming year, we’re looking at hundreds, a couple hundred, and that includes federal, state, and local, and we’re seeing a level of broader interest around that. You know, our goal is to continue to scale to multiple hundreds, you know, get to a thousand, and, you know, really build because I think that’s where you start to change the social narrative as well, Terry. Because there’s a broader objective here. And that is to start, you know, restoring a level of respect again, for going and serving in public service, as Wendy Kopp would say as well. Like, having students do that in the earlier part of their career has a force multiplier impact on the kinds of careers they have and the impact they have over the rest of their career. And I think we’re at that interesting inflection point where we have the potential to shift — you know, we use this term internally, like shift from why to wow. And what I mean by that is rather than people asking, when you go, say you’re going into government to do work in AI, going like, why would you do that when you can do all these other things? They go, wow, you got selected to do that, right? And it’s that initial reaction by your peers that I think starts to set a tone. And I think with the folks that we’re chatting with, partners that believe in the same thing, and we’re seeing that with governors, we’re seen that with agency heads, you see that with someone like Scott, leadership at OPM, Michael Kratios at OSTP, that there’s a real desire to kind of like get young folks energized about this, and so that’s what we’re looking to do, and I think that the potential’s there.

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Interview transcript

Terry Gerton You have a recent article that warns about air traffic chaos, especially related to the shutdown that we saw in November. And once again, air traffic control was sort of the straw that broke the camel’s back. What were the key pain points that you saw?

Chris Edwards Well, when the federal government doesn’t decide on its annual budget and the appropriations process, sometimes we get a government shutdown, as most of your listeners know. And sometimes when shutdowns happen, it affects the air traffic control system because the air-traffic control system is run as part of the Department of Transportation, as kind of a regular bureaucracy. And so we’ve seen this sorts of interruptions on air traffic and control in previous shutdowns 2013 and 2018. And the recent one where the government shut down for a month and millions of American airline passengers were delayed and had their flights canceled.

Terry Gerton The Department of Transportation is now offering $10,000 bonuses to air traffic controllers who had perfect attendance. Is pay the key issue here?

Chris Edwards No, I think the problem is that the funding stream of our air traffic control system is the federal government budget. And I’ve written extensively about how other countries such as Canada and the U.K. Have taken their air traffic controls system and moved it out of the regular government budget and given it a dedicated funding stream. So in Canada, they set up a non-profit corporation. They put their air traffic controllers in there, and it’s funded separately by fees on airlines and airport landings. So the stream is insulated from political battles that may happen. Back in 2016, the House Transportation Committee here in the United States passed out a bill of, out a committee that would sort of set up a Canadian-style system where we’d set a non-profit corporate entity. We’d put the air traffic control in there, and we would fund that system separately from the regular government budget.

Terry Gerton That sounds similar to the way Amtrak is run, and they’ve certainly had their funding challenges there. How would it work differently for air traffic control?

Chris Edwards So Amtrak is still reliant on the federal government for money for capital investment. The way the Canadians and the British have set up their systems is that they are completely independently funded for both the operating and the capital purposes. So the Canadian and British air traffic control systems are not subsidized, which is the way I think it should be because aviation is an industry like any other. There’s no reason why users shouldn’t pay for services. Air traffic control is a service and I think that the cost should ultimately land on people who use the air traffic system.

Terry Gerton You mentioned capital investment there. Certainly, the FAA and Department of Transportation have spent, let’s say, tens of billions of dollars trying to modernize the next-gen air traffic control. And they haven’t been very successful yet. All of those funds would be passed on to passengers, right, airport passengers? How would we get enough capital investment to really move forward in those critical functionalities?

Chris Edwards So when you move the system to the private sector, like on the non-profit system, like in Canada, the system, of course, raises money through fees, as we talked about, but can also issue bonds to raise money for capital, just like private companies do. And that system has worked really well in Canada and Britain. In fact, both Canada and Britain, in some ways, their technology is more advanced than ours on air traffic control. You touched on the next gen system. As some listeners may know, the Government Accountability Office, the inspector general for the DOT has been complaining about FAA’s poor performance on its capital upgrades for years and years in fact for over two decades now there’s a long series of government reports criticizing the FAA For the excessive bureaucracy or the risk aversion. You know, they’re not getting the job done in terms of adding the advanced technology we need in our air traffic control system.

Terry Gerton I’m speaking with Chris Edwards. He occupies the Kiltz Family Chair in Fiscal Studies at the Cato Institute. I wanna explore a couple of other things about privatization with you because you’ve also made the argument that the TSA screening function should be moved out of government funding. Talk us through that logic.

Chris Edwards So the logic there again is, is partly that, I’d like to get the politicians and their micromanagement out of some of these functions where we can. I mean, to go back to the air traffic controllers for a minute, the Washington Post had a nice story a few weeks ago about how we only have one training academy for air traffic, controllers, and we have a short and a shortage now on a lot of air traffic control facilities. This is Partly because Congress hasn’t allowed the creation of an additional training academy for traffic controllers it seems to be that’s the sort of micro that the problematic micromanagement you get when congress tries to control these sort of functions. With airport screening the idea is you decentralize the screening to individual airports, you have the Department of Transportation do safety oversight like they like they do now but the actual screening would be controlled by airports. That would give airports more flexibility to meet the sort of individual demands and unique demands the airports face. And we wouldn’t get sort of system-wide problems. We wouldn’t these system- wide mistakes. We’d get different experiences in the airports. The airports could learn from each other. The way Canada does it is they contract out their services to big expert security agencies. And many European countries do this too. The British do this. And that system works well also.

Terry Gerton What does the airline industry have to say about these proposals to privatize?

Chris Edwards Well, back in 2016, the airlines, all of them, except Delta actually supported the privatization plan passed through the House Transportation Committee. So Delta was the outlier there. Most airlines were on board with privatization back then. I think that the airlines should rethink now that we’ve had another government shutdown. I worry that the budget battles in Washington are going to get bigger and nastier. Unfortunately, in coming years, because deficits and debt are going to keep growing, there’s going to be a lot of pressure to cut spending. So I think we need to — the airlines, the air traffic controllers union and others, the other stakeholders need to — rethink the funding for air traffic control because I think the budget battles are going to get worse in Washington.

Terry Gerton So if the airlines support privatization, what are the biggest political obstacles that you see that are keeping it from happening?

Chris Edwards Well, unfortunately in the American political system, you only sort of need, you know, one sort of veto point and a whole reform plan can go down. So back in 2016, the House Transportation Committee passes the reform bill through, but the Senate Transportation Committee wasn’t too excited about it. Back then President Trump in his first term supported the plan. His transportation secretary, Elaine Chao, supported it. And the air traffic controllers union supported this privatization back in 2016 as well because, again, they’re concerned about stable funding. And they looked at the Canadian system and they could see that it works very well. Indeed, back then in 2016, members of Congress went up to Canada, looked at this system and so did our air traffic controllers union. They all thought it worked very well and looked good, and that was sort of the basis for that reform bill. Today, I think we’ve had another government shutdown. There was very damaging. Millions of passengers were inconvenienced. The economy lost money from the shutdown. I think this is time, it’s time now for Congress to rethink the structure of our air traffic control system.

Terry Gerton Air traffic control is really a global industry. I mean, you get on a plane in Dallas and you fly to Frankfurt or in Seattle and you flight to Beijing. What are our international partners in air traffic control saying about the U.S. System and how they would like it to be improved?

Chris Edwards Well, the U.S. System, you know, works well. I don’t think we’re at the leading edge of technology anymore, but it does work well. We have a giant system, but I worry about the future. The skies are getting more crowded all the time. Aviation demand is going up. The skies you’re getting more congested. Our technology is falling behind. We hear that from the GAO consistently year after year. So we’re not at the crunch point yet, but I worry. We’ve got to invest more and move that technology ahead to make progress. I mean, just to give you one example on that, the U.K. And Canada are moving ahead with what are called remote towers. These are, rather than the traditional air towers you see at airports where you have the controllers up top looking at the airfields. Visually the new idea is you put a bunch of sort of fancy technology and cameras with different sort of visual wavelengths looking at airports and you have the controllers looking at the runways on big screens with all kinds of advanced technology. These systems save money and they’re safer. And London City Airport now has a system like this in place and Canada’s moving ahead with this as well. That’s the type of technology where the FAA has been really hesitant. I think because it’s a government agency, frankly, it’s a little too risk-averse. So I think by opening up air traffic control, we get more entrepreneurs in and more innovation. And just the last point on that is, we’ve seen this with NASA or the space agency, that by opening a little bit and letting entrepreneurs like Elon Musk and Jeff Bezos get in there with new ideas, new ways of doing things, I think it’s been very beneficial for America’s space agency. So I like that same sort of innovation in air traffic control.

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Interview transcript:

Terry Gerton When we first spoke back in May, the Impact Project was just launching. So now that you’re six months old, what have you learned since then about how people are using the tool and how the project has evolved?

Abby Andre We’ve learned a lot since we launched. When we started, we had about 5,000 instances of government change mapped on our impact map. And now we have over 250,000 individual instances of change, not just to cross sectors, which is where we started looking at the whole country, and the whole host of changes we were seeing. But we’ve done some really deep dives into impacts in public health, AmeriCorps and most recently the security map. And we’ve been seeing a lot of journalists use the map. But increasingly we are talking to those who are really focused on the future, who really want to start thinking about how to respond to cuts and changes in federal policy in a way that can help restore services and start thinking about some creative ways to approach public service and government if the federal government is going to step back. So who now is going to step in?

Terry Gerton So tell us about some of the trends that you’re seeing now that you have so many data points.

Abby Andre I think the scope of impact is still the biggest one that we really hope folks looking at our maps will understand. Federal dollars are inherent to service delivery in every county across the country. Federal workers and public servants live in every state and almost every county. And so these impacts have been felt everywhere.

Terry Gerton And when you talked about public health and AmeriCorps, are there other projects or programs where you’ve seen specific impact?

Abby Andre I’ve been struck by impacts in food in particular. Very early on we saw a couple of COVID-era food programs cut. Local Food for Schools was one of them. And a lot of these gave farmers somewhere to send their fresh produce and folks in need of food, either kids or folks who were strapped in their budget, ways to access that really fresh, healthy food. And we have seen kind of echoes of that throughout the year, stories about food banks being in short supply and pantries not being able to provide what they needed. And then the uncertainty that we had around SNAP benefits during the shutdown really heightened people’s insecurity and concern about where they might be getting their next meal from.

Terry Gerton And now that we’re coming into the holiday season, any of those indicators flashing red for you?

Abby Andre I remain extremely concerned about food access, particularly among our most vulnerable families. I also remain concerned about people’s access to heating and cooling as we get into the colder months, while LIHEAP, the Low Income Energy Assistance Program, has not yet been fully cut, many of the staff have been lost and we’ve seen reports of interruption of services. And so I just continue to be really aware of the cumulative impact of cuts across sectors on families who rely on more than one type of government service, whether it’s food and health care, or food and energy and healthcare. If you see small cuts across those areas, it can have an outsized impact for those of us who are living paycheck to paycheck.

Terry Gerton I’m speaking with Abby Andre. She’s the founding executive director of the Impact Project. Abby, one of the newest features on the map is the security map. It’s a big new addition. Tell us about what prompted you to create it and how it fills a gap in understanding the kinds of threats that public servants are facing.

Abby Andre  I launched this map in partnership with the Public Service Alliance, which is led by Isa Ulloa. She’s a former fed, she worked at DHS. And she and I share a real value of public servants. Humanizing public servants was one of the original goals of the Impact Project. Her work at Public Service Alliance offers more affordable resources in security and privacy to make it safer for public servants to serve. She and I came together and started talking last May about the threat landscape facing public servants, in addition to the other burdens that they’re experiencing with the ecosystem of change. And we really agree that public service is patriotism and core to our country and our values. We wanted to build a tool that would help the American people understand who public servants are, and why we should value them.

Terry Gerton And as you look at the security threats, are there any trends that you see or things that surprise you?

Abby Andre This map is a little different than the Impact Project’s other maps in that we looked at 10 years’ worth of stories. We went back to try to get a sense for whether or not threats were increasing. So we, importantly, partnered with a couple of experts in the field — the Bridging Divides Initiative out of Princeton, Insight out of the University of Nebraska at Omaha — and their data all shows an uptick of threats over time, using methodologies that are slightly different from our own. So we wanted to dig in and see if we saw something similar, and we did. Over time, we’ve observed an increase in threats overall across red and blue states, but also a real increase in threats at the local level. I think many of us a decade ago, if you were asked about who got threatened for their work for the government, you would think about judges and elected officials, right? Now we know, and particularly since the beginning of the pandemic, that school board officials, librarians, city council members are really at the frontline of this surge in threats that we’re seeing nationwide.

Terry Gerton The map draws on pretty sensitive data — court records, partner data sets. How do you ensure that this is accurate but also transparent when you’re compiling such sensitive information?

Abby Andre That’s a really important question. We have to balance the desire to make the tool accessible and a source of education with our overarching need to keep public servants safe. From our end, we only use publicly available records. So if something is in a newspaper article, we’re willing to map it, but we do a couple of things to try and protect the identity of the people that we’re talking about, even if the identity was in the newspaper article. We scrub for names. We never include the name of a threatened person, or a perpetrator for that matter. And we also don’t geocode to a person’s address or place of work. Instead, we geocoded — which means, how do we put the dot on the map? We put in the zip code or the county so that you can still get a sense for the geographic spread of the threats, but the dataset couldn’t be used to find people.

Terry Gerton Those threats to local public servants could have a real chilling effect on the future of public service writ large. We all rely on librarians and police officers and school board officials to make our communities function. Are you seeing that kind of impact as you look at those trends?

Abby Andre We absolutely are. And it’s one of the reasons we made the map. We’re seeing that threatened people resign. We’re speaking anecdotally to folks who are opting not to run for office, who feel called to serve but don’t feel safe. And oftentimes these threats not only impact public servants, but their family members, their children. There was a story out of Minnesota that I found particularly moving about an individual who’d spent four separate rounds as a public school board official and resigned in the middle of his fifth tenure because the threats against himself and his office mates had become so severe. So, we not only lose that person in his last term, but his institutional knowledge. We worry a lot that the chilling effect at the local level in particular will drive people away from service. And PSA is one answer to that. But we hope overall that this map is a real call for more research, more common-sense solutions, and a return to seeing public servants as what they are. And that’s someone that really sacrifices for the good of the community and should be valued that way.

Terry Gerton Abby, thank you so much for pulling all of this together. You mentioned a couple of actions there, or mindset shifts, that you help people engage in as they see this data. Are there policy actions or other sorts of specific steps you’d like to see communities and governments take?

Abby Andre We will be launching a new map in addition to this that is a little bit more forward-looking in the spring. And we’re already thinking about the laws, whether it’s privacy laws, criminal laws, or laws specifically tailored to things like doxing or swatting — when someone’s information is published online, a false call goes into the police and somebody shows up at a public servant’s house. We have not done a good job holistically across the board of taking steps to protect public servants in a tailored way. And so we hope that the coming map and the materials that go with it will help identify best practices and really elevate the need for lawmakers and communities to be having conversations about steps around privacy, security and education that can help lower the temperature.

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Interview transcript:

 

Terry Gerton GAO has put out a new report looking at the Coast Guard’s Offshore Patrol Cutters program. In fact, they got an additional $4 billion for this program in the One Big Beautiful Bill Act from last summer. Let me ask you to start by telling us what is this program, what are these ships, and why is it such a high priority for the Coast Guard right now?

Shelby Oakley These ships are a very high priority for the Coast Guard because they’re a workhorse. They’re intended to provide and do a variety of missions like search and rescue, and migrant interdiction, drug missions as well. And so you might imagine that makes up a significant chunk of the Coast Guard’s mission areas. And they’re intended to replace a class of ships called the medium-endurance cutters. And those medium-endurance cutters are really old, and they’re having a lot of challenges. They had a design life of 30 years and they are all well past that 30-year design life. So the gap between those medium-endurance cutters and the Offshore Patrol Cutters is getting bigger.

Terry Gerton So what prompted you to look at the program now? Is it just the size of it or the duration?

Shelby Oakley Given that it is one of the Coast Guard’s highest-priority programs, between it and the Polar Security Cutter, makes up a significant chunk of the Coast Guard’s acquisition budget. And so we really try and focus our reviews on the highest-priority acquisitions within the Coast Guard. And this certainly qualifies for it. But this isn’t the first time we’ve looked at this program. This is our third review of the Offshore Patrol Cutter over the past 10 years, and we also assess it every year in our DHS assessment of major programs. So we’ve had our finger on the pulse of this program for a while and have consistently been watching progress and challenges that it has experienced. This was a good time to take another look at the program because of where they are at in terms of construction and progress in that regard.

Terry Gerton So was third time the charm? Are they making progress or did you find some still serious systemic problems?

Shelby Oakley The program is divided into various stages, and that occurred because the original program was awarded to Eastern Shipbuilding Group. They experienced a devastating hurricane in 2018 that basically trashed all their facilities and really affected their ability to make progress on this program. At that point, the Coast Guard divided the program into stages. So, Eastern Shipbuilding Group kept the first four ships; that’s Stage 1. Austal was then awarded the next 10 ships; that’s Stage 2. And then there’s Stage 3, which is yet to be awarded. That gets you to the 25 ships. So Eastern Shipbuilding Group has remained extremely challenged in constructing the first four ships. And in the spring, the Coast Guard decided that they were going to basically cut bait on ships three and four from Eastern Shipbuilding Group. They terminated those for default. More recently, and basically the week we were issuing our report, Eastern Shipbuilding Group announced that it would no longer work on ships one and two. And so those first four ships are now sitting there at Eastern Shipbuilding Group in various stages of completion, anywhere from 6% to 75%, with big question marks around what’s going to happen with them going forward.

Terry Gerton I’m speaking with Shelby Oakley. She’s a director in GAO’s Contracting and National Security Acquisitions team. Shelby, that seems like a big sunk cost to just walk away from. What did your findings tell you about how Coast Guard has managed the design of these ships and the cost of these ships?

Shelby Oakley We have we have pointed out for years, and reiterated again in this report, about a number of decisions that the Coast Guard made that led to some of these outcomes. One of the biggest things that we have pointed to is that Eastern Shipbuilding and now Austal have been authorized to begin construction on these ships before the design of them is even complete. So imagine that, for your listeners: Let’s just say you’re building a house, and you’re designing this house and you’re trying to lay out where everything in the house is going to go. The plumbing and the bathrooms and the kitchen and everything. And the builder comes to you and says, you know what, we don’t need to know any of that stuff. We’re just going to start building. It always comes back to bite you. And that’s what happened with Eastern Shipbuilding Group. It led to a lot of rework where progress was made, construction was done, but then the design changed or matured, and you realize, oh shoot we need to route those pipes somewhere different. That amount of rework that happened really ends up adding a lot of time and money to the effort. And that’s exactly what we saw. We saw an increase overall for this program, a 57% cost increase in this program from initial baselines. OPC-1’s delivery, that’s the first ship built by Eastern Shipbuilding Group, was delayed by five years. So certainly those are some of the challenges that we’ve raised. And we’ve raised concerns about the Coast Guard’s oversight of this program as well too, both from the perspective of those decisions allowing design to progress, but also from a cost perspective. There’s a lot of questions about the fidelity of the cost estimates and the schedule estimates in this program that I think have come to bear, in terms of them being outdated before or right after they’re initially re-baselined. And so we’ve made some recommendations to the Coast Guard to improve things like their schedule estimates to bring more fidelity and oversight to the cost estimates for the program. For example, by estimating cost per ship versus for the overall program. A number of things over the years we’ve recommended for them to do and they’ve taken some action, but not in every case.

Terry Gerton Is this a problem that’s unique to the Coast Guard? I mean, the Navy buys and builds ships all the time. Does the Coast Guard or the Department of Homeland Security not have that same sort of institutional knowledge here?

Shelby Oakley So there’s a couple of things, I think, that I would call your attention to. The Navy has its own challenges and certainly, for your listeners, with the announcement a couple weeks ago about the cancelation of the frigate program for the Navy, where they’ve spent $4 billion trying to design a ship and construct a ship. And now they’re going to walk away from it. It’s kind of indicative of the overall status of shipbuilding in this country, that it’s extremely challenged. And part of the reason why shipbuilding is challenged in this country is because of workforce and facilities. We had years of declining shipbuilding in this county that led to declining workforces. The people to be able to do the welding, and the design efforts on these ships, are no longer around. Both the Navy and the Coast Guard are working to rebuild that. I would say, secondly, the Coast Guard doesn’t always get the tier one shipyards that the Navy does to build its ships. For example, with ESG, this award for OPC was its first government contract. Imagine trying to figure out how to work within government bureaucracy to build your ship when you’re used to your commercial business where it’s a lot different. That was definitely a challenge for Eastern as it made its transition to this program. I think that led to a lot of issues on the program.

Terry Gerton Well, looking ahead as the Coast Guard moves to hopefully Stage 2 and then Stage 3, what is the most important of your recommendations that you hope they get a handle on quickly?

Shelby Oakley The bottom line recommendation that we’ve been reiterating for a number of years is: Get that design stable before you start constructing any more ships. You don’t have the time or the resources to waste reconstructing things because the designs change. One of our recommendations on Stage 2 was don’t authorize Austal to build any more ships until they’ve completed their design. And so that’s a big one. But then I think another really important recommendation that we made is this Stage 3 award is looming. They have to award the remaining 10 ships. And our contention is, maybe you should operationally test the ships that you’ve built and make sure they do the things that you want them to do before you authorize a whole other set of 10 to be constructed. We really focused on trying to push the Coast Guard to get that type of knowledge before they issue that RFP for that third stage. We also hope at that time that they can incorporate more of our leading practices that we see commercial companies do, like adhering pretty strictly to the existing design and not making changes, and really ensuring that everything’s modeled in this 3D model that allows for real-time work between the Coast Guard and the builder to understand the effects of any design changes on it. And a number of other things in terms of those leading practices. But those two things I think would really help the Coast Guard ensure that they put this program back on better footing.

Terry Gerton And have the Coast Guard and Department of Homeland Security been positive in their response?

Shelby Oakley They were positive in the response about the Stage 3 recommendation in terms of incorporating knowledge before. We’ll see if they actually adhere to that. They did not concur with the stabilizing the design for Stage 2 before authorizing additional ships. I think they feel confident enough in the design to feel like they’re good to go. But we’ve seen this story play out before both within the Coast Guard and the Navy where that confidence can be overstated sometimes, and so we’re hoping that they really take that one to heart.

The post Coast Guard’s biggest shipbuilding effort faces major design, cost risks: GAO first appeared on Federal News Network.

Interview transcript: 

Terry Gerton You have written a paper that asks a very provocative question. How many people can the federal government lose before it crashes? What’d you find?

Elaine Kamarck Well, we found that in the midst of all the DOGE chaos, people were figuring out that, wait a minute, they were making some mistakes. Some of these mistakes were absolutely clear from the get-go and were reversed in 36 to 48 hours. The one that I think everybody has heard about is when they fired a couple hundred nuclear safety engineers. And these are the people who watch over our nuclear stockpiles, and not only for readiness, but to make sure there’s no accidents. The stockpile are pretty old, as people in that area will tell you. And so the danger of something leaking, something going wrong is real, and you need people watching this all the time. And you can’t just immediately turn around and go to the help wanted ads and find a nuclear safety engineer. They aren’t a dime a dozen on the streets. So that created a huge outcry. And it was about 36 hours before they were rehired. And of course, the thing that happened there was that they had cut off all of their emails and contacts, so they had to really scramble to rehire these people. Now, that’s a very dramatic example. But there’s other ones where we are waiting to see what these cuts have done. And the fact that there’s — what we did when we put together this paper was we started watching carefully news sources like your own, like Government Executive, et cetera, that really cover the federal government and of course the traditional news sources, and looking for stories that talked about rehiring civil servants who were either fired or who were offered the deferred resignation. And in a lot of these cases, the agency took back the offer of the deferred resignation. So in other words, what was happening during really the whole of this year, was firings, dramatic firings sometimes, reductions in force, whatever, and then pullbacks as people began to realize, particularly the political appointees, I think, in the agencies, because they knew they were on the line. It’s no accident that the Transportation secretary, Secretary Duffy, was the first person to yell at Elon Musk in a cabinet meeting. Why? Because he knows that this, what they were doing to the FAA and to the air traffic controllers was going to result in trouble. It’s going to be an accident. And of course, who would be the face of that trouble? It would be the Secretary of Transportation, and of course ultimately the President. So, he stood up, he was the first one that really stood up to Musk in front of the President, and I think increasingly that’s been happening in less dramatic ways. People have been saying, wait a minute, you just cut too much.

Terry Gerton The latest numbers from OPM say that 317,000 people have left working for the federal government, but 68,000 have entered. It’s not clear if they left and then came back or if those 68,00 are new hires, but the administration’s contention has been that federal government is too big and too bureaucratic. At what point did these reductions stop being about efficiency and really start creating systemic risk?

Elaine Kamarck Oh, I think they’re already creating systemic risk. And that’s why you get the dramatic examples like the nuclear safety engineers. Then you have the longer term examples. So for instance, everything that’s going on at the CDC, at the Centers for Disease Control, is increasing the probability of pandemics and outbreaks. So you can imagine measles outbreaks in the coming months or years. You can even imagine polio coming back because of what they’ve been doing, the denigration of science, et cetera. And suppose you or your loved one is suffering from a really serious cancer. All right, well, there’s been laboratories defunded and they see what they’re doing. So they defund them and then they put the money back. And they’ve done this with some of Harvard’s laboratories recently. The problem is, you interrupt research and you lose months, if not years of research. The mice die. The tests, all that stuff that goes on in a laboratory, which is so complicated, when you close down a laboratory, you lose time. And if you’re somebody who has got a terrible cancer and is looking for a breakthrough cure, every minute counts.

Terry Gerton I’m speaking with Elaine Kamarck. She’s director of the Center for Effective Public Management at the Brookings Institution. Elaine, another one of the administration’s assertions is that AI can replace these folks, or automation will replace them, or we can contract it out. Can they? Are there some of these functions that just really require a human in a government chair to do the work?

Elaine Kamarck Most of them, frankly, require a human in a government chair. AI has huge potential. And back 30 years ago when we did Reinventing Government, the internet was just coming online for many people, because we were there, remember 1993 to 1996. So, when I went into the White House in 93, we didn’t even have the use of the internet. So as we went on, absolutely the internet was able to replace people. The technology did replace people. I have no doubt that that would be the case in AI. The problem is that AI is not ready for prime time and the DOGE people did not go about this with any sort of plan for which functions would do it. So, let me give you an example. I mean, 30 years ago, we really were convinced that eventually, technology would help us really get a handle on Medicare and Medicaid fraud. We’ve always known there’s a lot of fraud in there, but it’s a massive payment system and you have to have something that can sort of look through and find the patterns that are unusual. AI is going to be great for that. But did they announce that? I mean, the chaotic way makes us, everybody, suspicious that they just cut without a plan. And eventually, maybe in the next couple years, they’ll get a plan to use AI in this piece, but let’s face it, you can’t use AI in every place.

Terry Gerton Elaine, you have seen administrations come and go. You mentioned Reinventing Government back in the 90s. But if this administration sees the reduction in the federal workforce as a political win, at what point might they face the risk of having unintentionally weakened government capacity to deliver services? When did the people that government is supposed to serve figure this out and what happens when they do?

Elaine Kamarck Well, let me tell you something. They’ve already figured it out. So polling on DOGE is very unpopular with the public. Most of the public thinks, in the polls we have so far this year, they’re all the same, which was by about a 10 point margin, people think the government has gone too far. They think the cuts have gone too far. Now, when they will really feel it is when, and they are, if you’re a senior, you’re feeling it right now, or God forbid you’re turning 67 years old this year, and you’re trying to sign up for your Social Security benefits. You have three-hour wait times on the telephone, you have offices closing, even though Social Security keeps denying that they’re closing offices, and then GSA puts on their site that they are doing reductions in office space. I mean, so you’ve got two different agencies saying two different things. People are already feeling it on the service end. We had a little bit of a show of this in Texas with those terrible floods at the 4th of July, when you not only had NOAA asleep at the switch, but you had FEMA asleep at this switch. And that now, fortunately for the people involved, the state of Texas is a big state, a wealthy state with pretty good emergency response capacity. But what if they had been completely overwhelmed and needed outside help? So there’s a lot of ways that this is going to go wrong. And I think the public is already understanding that the cuts have gone too far.

Terry Gerton What will you be looking for come January when everybody’s sort of back after all of the holidays and before maybe another shutdown? What will you be looking for? What do you expect in terms of policy or action?

Elaine Kamarck It’s hard to say. I think I will be looking for more rehires, what we called in our paper rehires. More places where the cabinet secretary goes to OMB or an undersecretary and says, look, we’re in danger of this falling apart unless you have rehires. I think we’re going to have that. The bill that ended the shutdown, as you know, prohibits any more layoffs until the end January. So we’re obviously not going to have any more layoffs. But as I say in the paper I did on this for Brookings, the real effect of this was to cause people to leave. Either they took the deferred resignation or they retired when they were sort of just thinking about it or they took an early retirement offer or they took an old-fashioned buyout, and that, I think, is the most serious consequence, because think about it, who leaves their job? Well, either somebody who’s got a retirement set up and says, okay, I was going to do it next year, I’m going to it this year, because this place is crazy. Or somebody who knows they can get another job quickly, which means that some of our most talented people, probably younger people, left because they said, this is a crazy place to work. Not to mention the fact that you have an OMB director who constantly says things like he wants to make the federal worker terrified of going to work. I mean, that’s your legal definition of a hostile workplace. They have created a hostile work workplace for 2 million people. And so no wonder people are leaving. And that I think is the biggest consequence. And, so, the question is, can they get people back? Now, seeing what you’ve seen, suppose you’re a terrific cybersecurity person, and you’ve just gotten out of college a couple years ago. You’ve got a great resume. You know that field. We know that for decades now, the government’s been desperate to hire cybersecurity people. You have your choice of going to Chase Bank and doing cyber or going to Social Security or IRS or some other big government agency. What are you going to do? I mean, at these entry-level jobs, as we know, the pay is pretty even. So it’s not a matter of the pay diverging until you get into the upper levels, but the federal government is now run by people who constantly demean the federal workforce. Now, that can’t help hiring. So even if you’re trying to hire back, I think that it’s going to be difficult for the federal government to do that. And we’ll see what happens in January. And then, of course, the court cases. I haven’t even written about the court cases because I’ve been focusing on the operations of government. But there’s about 20 absolutely critical court cases that are going to have to wend their way through the system. And we’re going to see how much of this can be done. Because the nut of the argument is, if Congress has the authority to appropriate, and Congress appropriates money, and says, do this, do that with this money, and the executive says, oh, okay, we’ll do this, we’re going to do this with five people, and it is absolutely clear that you can’t do this with five people, is that a violation of the separation of powers? And that’s what we’re headed to. That’s really the issue that everybody is going to have to get their head around. And we’ll see if the courts offer any clarity on this in the coming months.

The post How lean can government get before essential services start to fail? first appeared on Federal News Network.

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 Insights on how federal acquisition changed in 2025, 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.

The post Defense, health care, oversight and spending; these four fronts are exposing deep divides on Capitol Hill first appeared on Federal News Network.

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.

The post A new bill could turn military experience into energy-sector strength first appeared on Federal News Network.

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.

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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.

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