by Leslie Adlam
On October 4, 2011, the House overwhelmingly passed a clean Continuing Resolution, H.R. 2608, to keep the government running through November 18th. The 352-66 vote came after contentious provisions over how to fund FY11 emergency disaster assistance funding were dropped when FEMA announced that it had enough money to keep operating through the end of the fiscal year on September 30, 2011. The Senate passed the clean bill on September 26th by a vote of 79-12.

House and Senate leaders are now at work on developing an omnibus spending bill making appropriations for the majority of government programs for fiscal year 2012. The question on everyone’s mind in Washington is how likely is it that the Super Committee will succeed in proposing a plan for $1.5 trillion in deficit reduction by its Nov. 23 deadline.

Congress has never passed an authorization bill for the Department of Homeland Security! On October 6, 2011 Chairman Peter King along with several other Members of the House Homeland Security Committee introduced HR 3116. The House version creates an Acquisition Review Board that will centralize departmental oversight of all acquisitions to eradicate wasteful spending, and requires the Department to independently verify the integrity of its major acquisitions and to notify Congress of any major acquisition. The introduction of HR 3116 follows the Sept. 21 passage of a DHS Authorization Bill (S. 1546) by the Senate Homeland Security and Governmental Affairs Committee.

House Committee on Homeland Security Subcommittee on Transportation is holding a series of hearings to explore innovations in technology procurement at TSA to stimulate job growth. Chairman, Mike Rogers is looking for new ways to communicate and develop partnership with private industry in TSA Technology procurement practices.

Senate Homeland Security Subcommittee on Oversight of Government Management, the Federal Workforce and the District of Columbia, held a hearing to examine the Intelligence Community’s (IC) reliance on contractors and whether the IC has rebalanced its workforce in the decade since September 11th. Daniel Gordon, Administrator for the Federal Procurement Policy at OMB, testified that the evaluation process is over and Policy-Letter 11-01, Performance of Inherently Governmental and Critical Functions, has been issued to all agencies.

HUBZone Expirations May result in Loss of Eligibility of Nearly Half of All HUBZone concerns, affecting Small Business Subcontracting Plans and Set-Asides.

On Thursday, October 6, 2011 the Committee on Homeland Security’s Subcommittee on Cybersecurity, Infrastructure Protection and Security Technologies held a hearing entitled “Cloud Computing: What are the Security Implications?” Chairman Lungren on the hearing:
“In light of the Administration’s ‘Cloud First Policy’ and the announced transition by the Department of Homeland Security to cloud computing, my Subcommittee will be examining how government information is being managed and secured in the cloud environment. We also want to hear how the private sector is implementing this shared technology option, its cost savings and risk concerns.”

SENATE CYBER LEADERS SAY HOUSE RECOMMENDATIONS SHOW CYBERSECURITY LEGISLATION CAN PASS IN 2011
Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., Ranking Member Susan Collins, R-Maine., and Federal Financial Management Subcommittee Chairman Tom Carper, D-Del., Wednesday said the legislative principles laid out by the House Republican Cybersecurity Task Force demonstrate that comprehensive cybersecurity legislation can and should pass Congress this year.

Members of the House Cyber security Task Force today released their 20 page recommendations for improving cyber security. The Task Force identified four issues:
1) Critical Infrastructure & Incentives
The Task Force recommended a combination of voluntary incentives and targeted and limited regulation to encourage private sector companies to improve cybersecurity.
2) Information Sharing & Public-Private Partnerships
Task Force recommended improving information sharing and developing active defense capability, develop an awareness campaign, and data breach legislation.
3) Updating Existing Cyber security Laws
Task Force members recommended updating several laws to facilitate more resilient and robust cyber security. The report includes a list of suggested updates.
4) Legal Authorities
Updating legal authorities was id enticed as one of the most complex issues related to cyber. The Task Force identified several questions such as What is the responsibility and/or authority of the federal government to defend a private business when it is attacked by cyberspace? How should we use the full range of instruments of national power and influence to discourage bad actors in cyberspace? Among others listed in the attached.
Finally the Task Force identified workforce development; recruitment, retention and training; Federal research and development; international cooperation and coordination and Internet Service Provider (ISP) Code of Conduct as longer term recommendations. The full report is available here.

September 22, the Government Technology & Services Coalition asked Chairman of the Joint Chiefs Admiral Mike Mullen about small and mid-sized companies and their challenges in the current market. Below is the transcribed exchange:

GTSC: We work on behalf of a number of CEO’s that work in the national and homeland security space. But, they’re small and midsized companies and we’re heartened to hear that many at DOD are talking about small businesses and what they can bring to the table. What is your advice about their best way to engage in that conversation with you?

Mullen: Figure out how to survive. That’s an area I’ve worried about a long time. And, I don’t want to be overly critical of the big defense conglomerates, if you will, or companies, but I’ve seen far too many, young innovative, bright, adaptable, quick, efficient organizations just die on the vine. My experience is two things happen, they get bought up, they lose in that growth, they lose who they were or they get killed. And so, I’ve been a big fan of them in terms of technology, innovation, adaptability, creativity, all those things. So I would hope that-I’d like to see- a future that allowed them to survive; that we could make, and because quite frankly they become threats inside the business world. And there’s more energy generated to try and kill them to make sure, than to look at them and ‘see that might be a great idea, we need to try and make that work;’ and I think we need to do that, quite frankly. I don’t mean to be overly cynical about surviving, but I think that’s key. And that’s going to be harder in a downsizing environment as our budget gets smaller. So, there will be consolidations, as there always have been, and in consolidation I just hope we can retain those characteristics to look to the future. I would hope that we are able to invest in a way that sustains a solid S&T world, a real research and development effort, not a what I would call program, part of the program R&D, which often is just another way to say this isn’t part of the program, but it is, but it isn’t taking you forward. But to know what the technologies are, so even if we can’t bring them to the fore right now, when it does turn, and it will, we would be in a position to do that.

And I think figuring out how to recruit and retain creative young minds. That think differently than people like me, is absolutely critical. In the government we don’t do that very well. Because too often it’s last in, first out. So there’s a host of challenges. I mentioned in my remarks, the industrial base. I think we have to be very careful about our industrial base, I think technically and physically, if you get rid of something, you can bring it back. I get that. I think the likelihood that if you make a decision which ends a certain part of our industrial base, it doesn’t come back. The skills go away the people go away and the enormity of the investment to bring it back, if you’ve got that wrong, it’s not gonna be there. So theoretically you can get it back, but it’s not going to happen. That’s why I think the care, there has to be care there, and there is some sloppiness in the industrial base, there is some inefficiency in the industrial base, and I think that’s ok;. When I say some, I mean some; it’s not ok as a way of life. When I see companies, even in the defense industry, and it’s something I worry about because we can’t afford this overall in defense, I call it a death spiral and a near death experience. Some pull out of the death spiral and the near death experience makes you do things that you could never imagine long before you got to that point that you have to do to survive. Can we make those choices before we ever get into any kind of spiral? And in government it’s that much more difficult. I want to encourage them, hang on, hang in there, keep pounding. Look for all the help you can get, strategically, as well as inside the business so those CEO’s are in.

New lobbying restrictions would severely curtail the flow of information to Administration officials and sever communication while leaving financial influence in place. Read the full brief by McKenna, Long & Aldridge here.

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On September 13, 2011, the United States Office of Government Ethics (OGE) proposed amendments to the regulations governing standards of ethical conduct for federal executive branch employees concerning the acceptance of gifts from registered lobbyists and lobbying organizations. These planned modifications, announced in a notice of proposed rulemaking, seek to extend significant and comprehensive gift prohibitions currently imposed on political appointees by the Obama Administration to all federal executive employees – permanently. Although the proposal has garnered relatively little media attention thus far, the implementation of such regulatory changes could have a profound effect on the way in which lobbyists, lobbying organizations, trade associations, and businesses interact with government employees around the country.

Under the current regulatory framework for lobbyist gifts, non-appointed federal executive branch employees are permitted to receive small individual gifts from lobbyists or lobbying organizations so long as the items accepted are worth no more than $20 and provided the aggregate amount of gifts accepted by an individual employee totals no more than $50 per calendar year. Likewise, under most circumstances, they are permitted to accept free admission to “widely-attended gatherings” (WAGs) sponsored by registered lobbying organizations (including trade associations). By an executive order issued by President Obama in 2009, federal political appointees may not accept gifts of any intrinsic value from lobbyists or accept free attendance to lobbyist-sponsored events unless they receive the offer on the day of the event when they are speaking or presenting information in an official capacity.

If implemented, OGE’s currently proposed modifications would eliminate the aforementioned “de minimis” gift exception for all federal employees, restrict their free attendance at lobbyist-sponsored WAG events, and otherwise hold “career” employees to the same ethical standards as appointed federal officials. No longer would a federal employee of any kind be able to accept a $15 lunch from a registered lobbyist or go to a WAG put on (in whole or in part) by a registered lobbying organization. Nor would career executive branch employees any longer be able to accept social invitations from registered lobbyists or lobbying organizations, or enjoy meals or entertainment provided overseas by such individuals or entities.

Since its release last week, OGE’s preliminary proposal has received a great deal of criticism from lobbyists, trade association representatives, and other businesses employing in-house lobbyists, who have all condemned the measure as an unbalanced attack on their interests by the Obama administration. This is due in large part to the exceptions contained within the OGE proposals for gifts made by 501(c)(3) nonprofit organizations, media companies acting in their news-making capacity, institutions of higher learning, scientific organizations, and other learned societies. Such organizations, which are often as active in lobbying as trade associations and other business entities, have been exempted from complying with the OGE’s new restrictions. The objection is that lobbying organizations (particularly trade associations and business entities employing in-house lobbyists) are being subjected to the rules and unfairly singled out as sources of improper influence.

In light of the proposal’s current exemption structure, it is easy to understand this growing chorus of criticism – particularly with regard to barring all executive branch employees from attending association and business-organization WAGs unless they are speaking or paying for admission. It is unwarranted and arbitrary for the OGE to characterize WAG admission as an improper gift when it comes from a trade association, while at the same time classifying it as a proper gift when it comes from one of the specified, permitted sources. This is especially true given the fact that trade associations make the same positive contributions as the OGE-excepted groups in the areas of education, standard setting, and professional development.

In addition, it is a poor means of promoting informed administrative governance for the OGE to ban federal employees from accepting free attendance to a wide range of policy programs, seminars, and other events put on by non-excepted entities simply because they happen to be business-oriented organizations. Now, when it is more important than ever for federal executive branch employees to learn about what is going on in the areas they are regulating, would not seem to be the time to preclude them from attending non-lobbying events held by associations and other organizations.

Regardless of the present shortcomings of the OGE proposal, however, lobbying organizations, trade associations, businesses employing internal lobbyists, non-profit entities, media groups, institutions of higher learning, and other professional associations should all take notice of the potential changes and how they may come to affect day-to-day interactions with federal executive branch employees. The potential for increased exposure to federal ethics violations is quite real in this instance, and as such, McKenna Long & Aldridge stands ready to assist our clients in monitoring and participating in the administrative comment process (which remains open until November 14, 2011), as well as in preparing them to comply with whatever final regulations emerge from OGE in the coming months.

From McKenna, Long & Aldridge — Stefan C. Passantino, Jeffrey P. Altman, Randall Nuckells & Benjamin Keane