If you’re a servicemember, veteran, dependent or any other eligible type of passenger, you may qualify for free accommodations on Space-A flights if a vacancy is available.
What is a Space-A flight?
Space-A stands for space-available flight and is also referred to as military hopping. If a Department of Defense (DoD) aircraft has vacancies when traveling between air bases, eligible persons may fill these seats at no charge, according to the John S. McCain National Defense Authorization Act. The purpose of Space-A is to give certain types of people the freedom to travel on flights that have vacancies.
Space-A flights can be on commercial airplanes, but they might also be on fuel tankers or cargo aircraft.
The different categories of travelers
Depending on who you are and the reason for your travel, you’re placed in one of six categories. When Space-A considers who gets priority when someone requests to fill a vacancy, the lower categories get picked first. Here are the different categories and what they might include:
Category 1: Emergency leave travel
The emphasis here is on the word “emergency.” People who might qualify for this category include DoD civilian employees who are stationed overseas or full-time American Red Cross employees serving in a military capacity.
Category 2: Accompanied environmental and morale leave (EML)
This might include DoD Dependent School (DoDDS) teachers on vacation or sponsors traveling for EML purposes.
Category 3: Ordinary leave, house hunting TDY
Those on ordinary leave or military members who are house hunting (following PCS orders) generally qualify for this rank.
Category 4: Unaccompanied dependents on EML
Family members on EML are in this tier. This also encompasses DoDDS teachers and their family members.
Category 5: Permissive TDY, students, dependents, post-deployment/mobilization respite absence
If their sponsor is stationed overseas or in Alaska or Hawaii, students fall into this group.
Category 6: Retirees, dependents, reservists and disabled veterans
This category would apply to these types of flyers on vacation, for example.
How to sign up for Space-A flights
Signing up for a Space-A flight is very different from booking a seat on a commercial aircraft. You won’t be using traditional airports or booking accommodation at all; instead, you’ll communicate with an Air Mobility Command (AMC) Passenger Terminal to reserve a spot.
These are instructions to keep in mind, according to AMC. More information can be found on their website.
- Ensure your eligibility. There are six categories of travel that determine your eligibility for Space-A, with lower categories getting higher priority. This includes emergency leave, unfunded travel, and accompanied or unaccompanied environmental and morale leave (EML). Which category you fall into depends on the reason behind your travel and your duty status.
- Check which locations are available. Review your closest AMC Passenger Terminal through their social media page or website.
- Make sure your documents are in order. Look at which travel documents you need to prepare before your flight. This includes your passport (with visas, if applicable).
- Register at an AMC Passenger Terminal.
- Look at flight schedules. There is a 72-hour flight schedule on the American Forces Public Information Management System (AFPIMS) web page.
- Check-in at the terminal counter. Familiarize yourself with any newly updated flight information and declare that you are present. If everything is in order, the terminal will give you a Space-A call when they’re ready for you to board.
Roam the skies for free with Space-A flights
While not everyone is eligible to ride on a Space-A flight under all circumstances, as long as you meet the basic requirements, you can take advantage of this perk. For more information, contact your nearest AMC passenger terminal.
The Department of Defense is prioritizing weapons sustainment in 2021, citing this portion of weapons lifestyle as being the most important, according to the Federal News Network. Acquiring the weapon is only the first part of the DoD’s process and noticeably less expensive than operation procedures that will follow. Moving forward, weapons contractors will have to take this transition into account when selling to the government.
The DoD says that its choice to shift into focusing on weapons sustainment is based on the fact that operations are 70% of the overall cost of the weapon. Over the last few years, the Adaptive Acquisition Framework (AAF) has been going through intense revisions. The six pathways laid out in the framework guide buyers to work more efficiently in the acquisition process. The AFF shows the DoD moving into finding longer lasting products as opposed to buying a larger quantity.
The United States Government is also considering the impact of its weapons on the climate. The changing climate is impacting commercial markets by encouraging sustainable innovation, and the government defense market is no different. The U.S. Army has already begun looking into “new environmentally friendly primary explosive materials”, as just one example of the United States’ efforts to reduce its impact on climate change.
Acting as defense undersecretary for acquisition and sustainment, Stacy Cummings said the DoD is now taking climate change data to assist in how it will buy and develop weapons, as reported by the Federal News Network. For example, combustible engines are not only hard on the environment, but need considerable maintenance.
Contractors who exhibit products that are environmentally conscious and relatively easy to maintain will have an upper hand in selling to the DoD. Additionally, weapons manufacturers should create products that have the ability to work effectively in extreme weather conditions for a long period of time.
Whereas previously weapons contractors and sustainment specialists may have taken a reactionary route to maintenance, the DoD is now more interested in proactive maintenance. Instead of trying to fix a malfunction after it happens, weapons manufacturers need to create products that eliminate issues before they even occur.
The DoD has been making serious efforts to leave reactive maintenance for the past several years. In 2020, DoD Instruction 4151.22 solidified the government’s interest in condition-based maintenance. The goal is to secure more cost-effective and sustainable weapons.
Cummings specifically mentioned three areas where sustainment is poor, according to the Federal News Network. She mentioned that the DoD is looking to increase operational efficiency in these three areas:
- Technical data agreements.
- Provisioning and cataloging spares.
- Establishing organic repair capabilities.
Contractors would have to sign adjusted agreements and new technologies are necessary to satisfy the DoD’s needs. Contractors will be impacted by the revision of previous instructions and the creation of new ones, namely DODI 5000.91, “Product Support Management for the Adaptive Acquisition Framework.”
Enhanced weapons testing is necessary if increased sustainment is to come to fruition. Technological advancements in software and hardware needs to meet additional testing requirements. Not only do the weapons need to hold up against the changing physical environment, but they also should be resistant to cyber attacks.
Contractors need to prove the durability of their product because the digital battlefield is a relatively new warzone. Sustainment and operational effectiveness will be integrated into the life cycle of weapons as early as possible.
As weapons systems evolve, contractors should follow the DoD’s lead.
Only several months into the new administration, many government contractors are surely curious about the new trends unfolding.
There are several factors currently at play in reshaping the government contracting landscape:
- Executive orders (EOs).
- New political appointees and agency leadership.
- A host of new policies, programs and initiatives.
Let's examine how these factors may alter the government's priorities and its procurement processes, and what that means for contractors and their businesses.
Beginning shortly after the inauguration, the new administration began rolling out a series of executive orders. While not all of these EOs directly related to government contractors, several have the potential to greatly impact this sector.
The EOs most likely to affect government contractors have largely covered COVID-19 response and mitigation efforts, immigration policy and climate change. For instance, federal agencies are now tasked with examining the impact of climate change from their procurement processes.
Government contractors should ensure their operations meet the updated needs of these agencies. In some cases, contractors with sound sustainable processes can potentially leverage this aspect to their advantage.
New political appointees and agency leadership
Along with the new administration comes a host of new political appointees and agency leadership across the federal government. However, while many of these people have been confirmed for their roles, there are still many deputies and senior leadership members still awaiting confirmation.
As this transition occurs, many government contracting bids and awards might be placed on hold. Even once all the federal agencies are up and running at full capacity, there might still be a waiting period as the new leadership reviews current rules and guidance and updates them accordingly.
Some government contractors may find themselves in a holding pattern as they wait for confirmation of appointees and leadership, along with implementation of updated rules and guidance.
Changes to policies, programs and initiatives
In addition to EOs and new appointments, there are also plenty of policy changes and initiatives underway.
The updated "Made in America" program is most likely to affect government contractors. While "Buy American" has long been a focus for federal contracts, the new administration has refined the program further.
Now, all agencies must review all actions, and consider eliminating any of them that do not align with the "Made in America" initiative. This means all federal financial assistance awards and procurement will need to follow all statutes, rules, regulations and EOs that refer to the "Buy American" or "Made in America" program.
To this end, the Office of Management and Budget (OMB) is establishing a new Director of Made-in-America Office to oversee the implementation of this program. This new Made-in-America Office will:
- Increase oversight of waivers to domestic preference laws.
- Connect new businesses to contracting opportunities.
- Direct a cross-agency review of all domestic preferences.
- Increase domestic content requirements.
- Find ways to close current loopholes in how domestic content is measured.
Domestic government contractors may potentially see more awards and procurement opportunities with this new initiative.
IT overhaul and improved cybersecurity
Many governments still rely on outdated and inadequate information technology (IT) infrastructure and cybersecurity programs. Plus, recent high-profile incidents, such as the SolarWinds hack, have drawn heightened attention to these critical aspects of the government.
Although signed into law back in 2017, the Modernizing Government Technology Act continues to play a vital role in overhauling and updating the IT and cybersecurity of different government agencies.
Government contractors specializing in digital, mobile and cloud technologies, or software, data analytics and more can potentially tap into the $74.8 billion worth of contracts involving IT products and services.
In an effort to reduce its carbon footprint and pursue alternative energy options, the U.S. Department of Defense (DoD) is moving forward with a major transportable advanced nuclear microreactor project.
As part of Project Pele, the DoD's Strategic Capabilities Office (SCO) has chosen two private companies to help accomplish this mission: BWXT Advanced Technologies and X-energy. Westinghouse Government Services is also part of the program.
Project Pele in action
Project Pele is a whole-of-government effort, which includes the DoD, the Department of Energy, the Nuclear Regulatory Commission, the National Aeronautics and Space Administration (NASA) and the National Nuclear Security Administration. Its goal is to develop a portable nuclear reactor to power operations in the field. If successful, this project would result in a stable and portable source of a significant amount of power for the military.
According to a DoD press release, the department currently uses approximately 30 Terawatt-hours of electricity per year and more than 10 million gallons of fuel per day. With current plans to grow the number of electric vehicles in its fleet, this will only increase the amount of energy consumed by the DoD. The department is seeking a transportable nuclear reactor system that will operate for at least three years and generate up to 5 megawatts of electricity.
The aim is to provide a stable power supply for disaster relief operations and critical infrastructure support. This will make the military's energy supply more resilient to an electric grid attack. It will also streamline energy logistics and delivery for forward-operating bases, all without increasing the DoD's carbon footprint.
About the contractors
Based out of Lynchburg, Virginia, BWXT Advanced Technologies, LLC, has more than 60 years of nuclear innovation. It has delivered more than 400 reactors for Naval nuclear power, provided 315 steam generators to nuclear power plants and managed 18 high-consequence U.S. sites.
Operating out of Greenbelt, Maryland, X-energy, LLC, is a nuclear reactor and fuel design engineering company that designs safe and efficient modular reactors for a wide range of global markets and applications. The company also manufactures its own proprietary particle fuels.
Current state of the design and development process
In March 2021, the companies were awarded preliminary contracts of less than $15 million. Final designs are not due until 2022. At that point, the DoD will make a determination on the project's viability for long-term production. As it stands, Dr. Jeff Waksman, Project Pele program manager, is optimistic about the project's success.
"We are confident that by early 2022 we will have two engineering designs matured to a sufficient state that we will be able to determine suitability for possible construction and testing," Dr. Waksman stated.
After the second design phase of the project, and following an environmental analysis, the SCO may competitively award the manufacturing and deployment of the microreactor prototype. Ultimately, the companies involved will have to demonstrate a successful combination of this first-of-its-kind technological solution and proven production processes to meet DoD's power generation needs.
The United States Postal Service counts on economical, long-lasting and easily repairable vehicles as a major part of its mission to deliver mail to all Americans. In fact, the most common mail truck used by the USPS is called the Long Life Vehicle (LLV). Produced by Grumman, a company with plenty of government contracting experience, the LLV was designed specifically with these qualities in mind.
With LLVs starting to reach an advanced age, even when accounting for their durable design, the USPS requested proposals for a new general-use mail delivery vehicle from potential providers. And, just as an experienced contractor earned the rights to produce the LLV, the new generation of USPS mail trucks will be produced by another company with plenty of history in this field.
Oshkosh to produce new USPS vehicle
Oshkosh Corporation, based in the city of the same name in eastern Wisconsin, recently won the bidding process to produce a new generation of USPS mail trucks. Car and Driver reported the relationship includes a $482 million investment to finalize the design of the new vehicle, ideally readying it for use by 2023. The mail truck, called the Next Generation Delivery Vehicle (NGDV), will represent significant steps forward in terms of design, function, safety and more.
The newest LLVs were produced in 1994, but were intended to have a 24-year useful life. The oldest vehicles still in service were made in 1987, representing 34 years of service. The replacements may come as a welcome change to mail carriers who use the LLV. A lack of air conditioning, an unreliable heater, mixed performance in severe weather and, most seriously, the fire risk, as reported by CNet, are all problems for postal employees. The new design will address these longstanding issues as well as add some important benefits, according to The Verge:
- A collision avoidance system.
- Improved ergonomics.
- Better lines of sight for the driver.
- Accommodation of both electric and gas engines, with the capability to easily convert combustion units to electric in the future.
An innovative design from a proven contractor
Oshkosh has a long track record in producing reliable vehicles for the U.S. government. The company's history stretches back to the early 20th century, and it began producing trucks under contract for the U.S. military in World War II, according to Forbes contributor Jim Vinoski. During the 1970s, it secured the rights to produce the M911 for the U.S. Army's tank transporter program and entered into a longstanding contracting relationship with the federal government.
Oshkosh is well known for producing a successor to the Humvee military vehicle, the Joint Light Tactical Vehicle (JLTV). The JLTV is an example of Oshkosh's ability to improve on significant flaws in vehicle design. In the case of the JLTV, the issues addressed were the vulnerability to improvised explosive devices faced by the stock Humvee, and a desire for more vehicle carrying capacity than Humvees with enhanced armor. Oshkosh has already produced 10,000 of these vehicles, and they have generally been received as reliable and effective by the servicemembers who use them.
While the risks facing postal workers and military servicemembers are vastly different, Oshkosh has proven its ability to identify limitations and defects in prior designs of equipment, then improve upon them.
Plenty of work remains to be done on the contractor's part, including opening a production plan and finalizing the design of the vehicle itself. But, if past performance is any indication, the new NGDV may well prove to be a significant improvement over the current LLV.
When signing the Buy America executive order in late January, President Biden discussed his administration's push to transition government fleets to electric vehicles (EVs) of American origin. During the press conference, Biden situated this initiative as part of the administration's "Build Back Better" recovery plan and efforts to modernize infrastructure, according to CNBC.
Here's a look at the current state of fleet manufacturing and use, as well as what contractors can expect moving forward.
Government agencies account for 645,000 vehicles
As Biden explained during the press conference, "The federal government also owns an enormous fleet of vehicles, which we're going to replace with clean, electric vehicles made right here in America by American workers, creating millions of jobs."
According to the U.S. General Services Administration's 2019 Federal Fleet Report, the federal government owns and operates about 645,000 vehicles, which consume 375 million gallons of gasoline and diesel fuel per year. Of these vehicles, about 225,000 are operated by the post office and 173,000 are for the military.
New focus on Made-in-America fleets and contract opportunities for small businesses
President Biden aims for EV "net zero emissions" fleets that are produced using American parts and labor.
The administration noted that, in recent years, the federal government "spent nearly $300 million on foreign engines and on vehicles, instead of buying American vehicles and engines from American companies, putting Americans to work."
To ensure government spending supports U.S. businesses, the Buy America executive order included appointing a new Director of Made-in-America at the White House Office of Management and Budget. Part of the director's purview will be to support more transparent and participatory procedures for U.S. businesses.
For instance, the procurement process is expected to carefully assess and publicize all waiver requests that favor foreign parts and products. This way, American manufacturers, including small businesses, can have the opportunity to offer up their services.
Under the current component requirements, vehicles manufactured for government use are intended to contain 50% American parts. Biden said new initiatives would close existing loopholes and ensure that the highest-value components — steel, engines, glass and so forth — are manufactured domestically.
An 'avalanche' of new EV offerings and auto jobs expected
This push toward electric fleets comes as part of Biden's clean energy mission to create 1 million new jobs across the automotive industry and "position America to be the global leader in the manufacture of electric vehicles and their input materials and parts."
This announcement is promising for the few EV manufacturers in the U.S. like Tesla, Lordstown and Rivian as well as longstanding companies like General Motors, Nissan and Ford, which are actively pivoting to invest in EV production. But industry experts forecast opportunities for U.S. businesses beyond these big-name companies.
"The current [EV] offerings are pretty slim, but the industry's about to unleash an avalanche of new product, and a lot of it built in North America," Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research, said in an interview with CNBC. "Just about every U.S. plant is going to have a hybrid or electric product."
In its never-ending mission to improve cybersecurity best practices, the U.S. Department of Defense (DOD) published an interim rule in September 2020 on its Cybersecurity Maturity Model Certification (CMMC). The CMMC rule creates a framework for the DOD to more effectively assess the cybersecurity implementation of government defense contractors. The CMMC will also enhance the protection of unclassified information within the DOD supply chain.
Because of these new requirements, prime contractors and subcontractors need to become third-party certified by Nov. 30, 2020, if they wish to continue doing business with the DOD.
"[An] estimated 7,500 companies will be certified in 2021," said Katie Arrington, chief information security officer in the Office of the Undersecretary of Defense for Acquisition and Sustainment. "That doesn't seem like a lot but if you think about the interconnectivity of the [defense industrial base] it's a certification that's good for all DOD contracts for three years."
While the full roll-out of CMMC will take place over the course of five years, contractors need to start moving forward with getting certified quickly.
Breaking down CMMC best practices
The CMMC interim rule falls under the Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting. The clause requires contractors and subcontractors to implement the 110 security controls set forth in National Institute of Standards and Technology (NIST) Special Publication (SP) 800-171 on "any information system that processes, stores or transmits Controlled Unclassified Information."
The new rule creates a new NIST SP 800-171 Assessment requirement for DOD procurement contracts awarded after Nov. 30 that exceed $10,000. The NIST Framework is segmented into five buckets, or functions: identify, protect, detect, respond and recover.
Even following a successful assessment, certification and authentication process, contractors must keep reviewing and logging activities for rapid detection. Maintaining compliance will involve continuous system monitoring and regularly upgrading necessary safeguards to protect against malicious IPs, coordinated cyberattacks and common web exploits.
Depending on the type of work being contracted, organizations will need to meet varying levels of security requirements, listed as Levels 1 through 5. Level 1 is the least stringent while Level 5 is the most strict:
- Level 1: Performed. This is where documentation of practices begins.
- Level 2: Documented. With documentation in place for all levels, draft a policy that covers all activities.
- Level 3: Managed. A plan exists to cover all activities, which is maintained and resourced.
- Level 4: Reviewed. Activities are reviewed and measured for effectiveness, with the results of the review shared with higher level management.
- Level 5: Optimized. Following the review and measurement, a standardized document approach is implemented across all applicable organizational units.
In each level, all practices must be documented, including those that fall under lower levels.
For this certification, DOD defines "activities" as the organization's mission, goals, project plans, resourcing strategy, training needs and the involvement of relevant stakeholders. The practice progression lists Level 1 companies as having basic cyber hygiene, Level 2 with intermediate cyber hygiene, Level 3 with good cyber hygiene, Level 4 as proactive and Level 5 as advanced and progressive with their cybersecurity practices.
For those federal contractors looking to maintain their government defense contracts, it would be wise to invest in visibility, protection and rapid detection technologies. Contractors and subcontractors can review the associated Federal Register page to find out additional information about this new interim rule, such as expected cost impact.
There's no denying this year has been one of uncertainty and slowdowns across countless industries. Although opportunities have dried up in some areas, other sectors remain stable and profitable. One such sector is federal contracting. Many enterprises whose commercial markets have suffered this year have leaned more heavily into their contract work for the government.
After taking stock of what the contracting market offers and which businesses are positioned for success, consider the four straightforward steps you'll need to follow to successfully enter this profitable and rewarding market.
The current state of federal contracting
The 2020 Bloomberg Government report revealed that contractor spending is up from last year, with a whopping $597 billion in federal government spending in fiscal 2019, a 6% increase from 2018's $561 billion. This follows four consecutive years of growth since the $442 billion allocated in fiscal 2015, and sets a record high for spending.
Federal contracting provides a viable route for growing your business no matter the size, as the government leans on many different types of service providers beyond leading defense contractors. In fact, the government aims to award at least 23% of federal contracts to small businesses. This includes businesses in:
- Research and development.
- Sustainment supplies and equipment.
- Electronic and communication equipment.
- Clothing and textiles.
- Supplies and equipment.
- Office management.
- Facilities and construction.
- Information technology (IT).
- And many more.
If your business could fill one of these needs, here are the four steps to take to become a federal contractor:
The government has strict guidelines, regulations and laws that apply to federal contracts and the businesses that receive them. These vary by industry and sector. Take some time to research and learn about the responsibilities of federal contractors provided by the Small Business Administration (SBA). Any errors or missteps can create costly legal problems.
It's also a good idea to know the six-digit North American Industry Classification System (NAICS) code that applies to your business. This is necessary to compete for federal contracts.
Obtaining a federal contract requires registration in a few areas. Much like knowing your industry's NAICS code, you'll also need to register for a Data Universal Numbering System (DUNS) code to apply for federal contracts.
Once you're ready to take the next step, you'll have to register and create an account on the government's System for Award Management (SAM). This is the official site for registering your business with the government. It's also where you'll upload and store important information for your business, such as certifications and licenses.
It's important that you create an internal business plan that directly addresses your external contract proposal. This plan should include your marketing plan for the contract, staffing and employment details, certifications, specialization, experience and other pertinent information that relates to your industry.
You will also need to calculate and include a comprehensive cost analysis and profit-margin outline for the services or products the government will be contracting from your business.
After conducting all the prerequisite research, registration and planning, you can move into the bidding phase. The government's SAM site offers a search option where you can look up procurement notices and bidding opportunities from federal contracting offices. You can search by keyword, soliticiation ID or a particular agency's name.
Once you find a solicitation that fits your business, carefully review all the contracting documentation. If you have any questions, be sure to reach out and ask so that you're fully aware of what the opportunity requires and entails.
Based on this information, follow the solicitation instructions for filling out and submitting all the requested forms, and for providing all the technical, past performance and pricing information in the appropriate manner.
Be prepared to negotiate with the government for the most optimal offer. In many instances, you'll be competing against other industry peers for these contracts, so you'll need to ensure your prices and offerings are the best possible that you can provide.
Defense News publishes an annual list of the top 100 defense contractors. But the 2020 Defense News Top 100 does more than just identify leading players in the industry. With some careful analysis, it can offer a snapshot of the current state of defense contracting and hints at what the future might hold. Let’s take a look at which companies top the list, and what trends and takeaways federal contracting companies of all sizes should be aware of.
1. Stagnation among the top 5 spots
A glance at the six leading names in the 2020 Defense News Top 100 would look remarkably similar to past years’ reports. Lockheed Martin has held the No. 1 spot since 2003 — and the company has been the top U.S. contractor by sales for 40 years running.
The same four enterprises have similarly occupied the second to fifth places for several years as well. This year, they rank in order as Boeing, General Dynamics, Northrop Grumman and Raytheon. Typically in 1 of the top 6 spots, BAE systems has fallen to No. 7 this year.
Most major changes in ranking come as a result of mergers, acquisitions and divestitures. For instance, Raytheon Technologies Corporation — a result of the April 2020 merger between Raytheon Company and United Technologies Corporation — was listed for the first time as a signal entity in this year’s list.
2. Growing influence of Chinese enterprises
Eight Chinese companies have taken spots in the 2020 Defense News Top 100 — and the outlet predicts more Chinese contractors will lead the global defense market in the next several years.
“Because these enterprises are state-owned and often part of large, diversified enterprises, the data for annual sales is difficult to obtain,” Defense News author Byron Callan noted in a 2019 assessment, explaining the omission of Chinese companies in the past.
However, the relatively recent inclusion of Chinese companies paints a different picture compared to previous reports. And they aren’t trailing behind U.S. and European entities; they’re clustered at the top of the list. All eight contractors occupy places in the top 24, meaning that China’s state-owned enterprises make up one-third of the top quarter of the list.
Also, it is important to note that the data reflects the activities of an active, international market. Companies are listed by country of origin, but it is not specified what percentage of sales came from their home country, the U.S. or another foreign nation.
3. Stability in spite of the coronavirus pandemic
According to Defense News authors Doug Berenson and Chris Higgins, “Although the defense sector has faced pandemic-related business disruptions, it remains a safe haven, with most defense-oriented firms reporting only modest impact on revenues and profits.”
Most companies that make the list each year follow one of three business models. They either primarily serve the government and defense sectors, serve both defense and commercial clients or operate as industrial conglomerates serving markets far and wide. Enterprises whose commercial markets have been severely impacted by COVID-19 — such as aviation leaders like Boeing — have leaned heavily on the defense market over the past year, according to Berenson and Higgins.
4. Some industry leaders may yet be missing
The ranking methodology is largely dependent on sales data provided by the companies in question. As a result, several influential companies are missing from the 2020 list.
Examples Callan noted in his 2020 Defense News Top 100 analysis include several major players in the U.S. such as SpaceX and BWX Technologies, as well as large defense contractors based in Japan, Spain, Russia, Poland, Australia and India.
Despite the fact that these enterprises remain off the list, at least for the time being, industry analysts still emphasize the importance of keeping an eye on their significant — and, in the case of SpaceX, highly disruptive — contributions to defense contracting.
Companies that want to do business with the federal government will find that there are a few common types of federal contracts as well as a variety of rarer, but no less important, contract types. Each one is designed to offer the required level of flexibility and account for other factors including the delivery timeline, the level of risk and the nature of the goods or services being procured.
Before entering into a business agreement, it's important for civilian contractors to become familiar with basic structures and advantages of the types of federal contracts they might encounter.
Fixed-price contracts are among the most common types of federal contracts. Within this category, contracts can come with a few different features.
The most basic is the firm-fixed-price (FFP) contract, wherein the price set for the supplies or services is set and paid out as a fixed, flat rate. This is useful for contractors providing specific products or services for which they can confidently determine the costs beforehand.
Similar to the FFP are fixed-price contracts with prospective price redetermination. After sticking to a firm fixed price for an introductory period, both parties will review the price and revise it as needed to account for market fluctuations and other contingencies.
Another contract type in this category is the fixed-price economic price adjustment contract. Under this arrangement, contractors may secure additional payment if market rates for the labor or materials required to complete the contract deliverables suddenly increase. This offers an advantage for companies that rely upon unstable markets for material and human resources.
Fixed-ceiling-price contracts with retroactive price redetermination are another variation. These are typically used for research and development projects. The civilian contractor and federal agency will agree upon a price cap prior to beginning the work and will adjust the compensation level — keeping it at or below that price ceiling — after the services have been rendered.
A more common category for R & D service providers is the cost-reimbursement contract. This places less risk on the company, which may incur variable costs while providing the federal agency's required services. Under cost-reimbursement contract arrangements, the government will pay for incurred costs up to a certain amount. These are only available in situations where the contractor can't accurately project the associated costs for their services.
Variations include a range of cost-plus-fee contracts, where the contractor receives either an award, incentive or fixed fee in addition to the reimbursement.
Alternatively, cost contracts are designed primarily for nonprofit organizations that render R & D services without collecting a fee but still require their costs covered.
Other types of federal contracts
Beyond those two most common types of federal contracts, a handful of other options exist.
First, incentive contracts can be structured similarly to fixed-price or cost-reimbursement contracts but feature an incentive tied to the contractor's performance, such as the ability to provide expedited service or come in under budget.
Next, the government may issue indefinite-delivery or indefinite-quantity contracts to companies whose services are hard to quantify ahead of time. This can be useful when services are contingent upon unpredictable factors or desired quantities are not yet known by the agency.
Finally, time-and-materials contract and labor-hour contract arrangements meant that the provider will be compensated for actual wage-based labor and materials costs at a fixed rate. These are used only when the duration of the contract is unknown and are typically issued for short-term projects.
This range of federal contracts gives civilian providers and federal agencies flexibility when coming to an agreement and delivering or procuring goods and services.