Interview transcript:

Terry Gerton I want to start by taking a look back. You took over at PSC this spring. What has been the most surprising thing you’ve encountered in your first year on the job?

Jim Carroll It’s hard not to look back on the first year and think of the disruption caused by the record-breaking shutdown as being something very, honestly, traumatic. The fallout from DOGE and the impact that has had — those two things stand out as the biggest opportunities and challenges to overcome. Certainly the shutdown and the duration of it was a surprise. I think everyone sort of expected two weeks out, or three weeks out, that it was going to happen, but the fact that it lasted so long. The wonderful surprise really has been the dedication of the companies that are members of PSC to fulfill the mission. I’ve spent my entire career in the government, with one stint in the private sector. Being able to work with these member companies, they truly feel that they are doing the best work for and on behalf of the country. The significance and seriousness with how they approach their job has been just a wonderful affirmation of the work that they’re doing.

Terry Gerton So Jim, coming off of that, one of the things that happened just before the Senate left town was the confirmation of 97 more political appointees. You’ve said this is really important to PSC and industry. Walk us through what you’re watching in terms of political confirmations.

Jim Carroll At the beginning of the administration, we did see members of the cabinet and the deputies confirmed very quickly and getting them through the process. Since then, it’s been bogged down getting these assistant secretaries and a few deputy secretaries confirmed. What that means with getting 100 more people on the job is what you would expect: They’re on the job, they are going to be the decision-makers. We’re excited because we believe that things are going to start moving a lot faster. And we sincerely appreciate the willingness of those people that were willing to serve in an acting capacity. But those people have some constraints on how they move, what decisions they can make; now getting the new political appointees in, it means that they’re really going to start moving faster. We’re hoping to be able to see more long-range and not just some of the short-term things, so we’re excited about that. We think it’s in the best interest of everyone to get these folks onboarded and get them moving. We are certainly going to take advantage of that and be coming to them to tell them exactly how these things impact the industry — and therefore impact the country.

Terry Gerton I’m speaking with Jim Carroll. He’s the CEO of the Professional Services Council. Jim, you mentioned up front the surprise around the government shutdown. Hopefully we won’t have another here at the end of January. But what, then, are the contractors in your community expecting in terms of procurement momentum? Is it going to pick up from what we’ve seen?

Jim Carroll Yes, we absolutely believe that. And I am not as worried about the shutdown of the end of January as I was back in the fall. Hopefully you feel the same way, Terry. I don’t think either side won. I think both sides lost during that shutdown. I’m hoping, and we’re certainly telling people, that that is the situation. With the these people on board, there’ll be renewed excitement. They are eager to get the job done. A lot of them have been waiting, really, a year since they were announced by the president, so they’re going to be incredibly motivated to work and to get decisions made, to get acquisitions going and really sort of set the policy for working with industry. We’ve heard from some of them already. We’re looking forward to meeting with some of them as they get settled in and find their office. We will be meeting with them and making sure that they understand the broad significance of what they’re doing and letting them know we’re a willing partner to achieve those objectives.

Terry Gerton Jim, one of the big challenges for the government contractors in 2025 was just the delay in terms of invoices, the disruption in contracts, terminations. Are you expecting that these backlogged invoices and stalled new awards and recompetes are going to pick up speed?

Jim Carroll Yes. We went in with some of our members to meet with the Chief of Staff, Susie Wiles, and the White House counsel. We told them — and this was while the shutdown was ongoing — that we needed, once it ended, to be able to move on these. We have followed up with the White house leading up to Christmas. The Chief of Staff, Susie Wiles, was very receptive to it and was, we believe, to be really on message with this. We talked about the communication and how to best achieve it through the departments and agencies. So we’re optimistic that these invoices will be paid. Because this is work that has been done, and for these companies, for the most part, they have been paying their employees. Some, sadly, had to put folks on the bench and furlough people temporarily. But a lot of them kept working, did what they needed to do, and now there’s cash flow issues for some of these companies. That’s what we’re pressing on to the White House. That is what we’re talking about with the members of the cabinet on some of the issues, is to get these invoices paid and get these companies up and running fully.

Terry Gerton Well, speaking of paying one of the few agencies that has a significant appropriation is Department of Defense. You’ve got a lot of your constituents, your member organizations, in the defense sector. What’s driving the agenda for defense in 2026?

Jim Carroll Certainly the meeting that the president announced with the top defense contractors, who are members of PSC, is that they do want to contain costs. What we’re doing now is explaining that they are containing costs and it’s just like anything. Change orders — if you’re building a home and submit a bunch of change orders while the contractor is building your house, that costs extra money. So we’re explaining the same thing is happening with government contracts. That the procurement process can be streamlined, there can be a focus more on deliverables as opposed to some of the issues of the contract that have no impact. We’re seeing some of those smaller things, companies were going to certain sections within the Department of War and saying, hey, we have a new way to do things, we can do this in a more efficient way and deliver results faster. We’re going to use, maybe it’s AI which obviously is going to be a continuing a big issue in ’26, and we can reduce the number of people that we have in seats by 20% or 30%. And the department would say, no, we contracted for 90 or 100 people and we want 90 and 100 people sitting in seats — without really focusing that we can deliver better, faster, cheaper results if we amend the contract. So it’s some of that we think we’re going to be able to overcome because Secretary Hegseth and the White House have been so focused on getting the results, that if we can work together with these new folks that have been confirmed, these new 97 people  — not all of them in the [DoW], some are in the [DoW], some are in other key departments where we work — we really are optimistic that things are going to move much faster in ’26.

Terry Gerton Well, it sounds like with all of the new appointees, and perhaps some stability in terms of funding, that you’re hoping that 2026 is a more predictable year for government contractors. What exactly is PSC going to be focused on as you look into the new year?

Jim Carroll What we’re doing is focusing on meeting with not only the people that are just confirmed, as I said, a lot of these assistant secretaries. But now that things are a little more predictable, we’re going in, and we bring our members with us. It is important that our CEOs, our significant C-suite executives are with us when we’re going in to meet with members of the cabinet. And truly, we’re setting up meetings with secretaries and other key decision-makers so they can hear from us — and when I say “us,” I’m talking about the industry — about how to achieve the results that they want in 2026. That’s one of the things that we’re doing, now that there are more people in place, now that they want direction and want results, we are going in with our members and we are absolutely going to be leaning into explaining to them the best ways we can help drive the objectives that they want.

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