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Continuity is (mostly) on the menu for government contracting in the next administration

Continuity is (mostly) on the menu for government contracting in the next administration
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For all the uncertainty and divisiveness of this election season, one area that will see more continuity than change in the next administration is government contracting. There is a surprising consensus on how we need to adapt the business of government to meet major national security challenges facing the nation. Among the priorities include countering China, incorporating more commercial technology in future defense systems, innovating contracting approaches and increasing domestic manufacturing capabilities. There are definitely disagreements on priorities, but certainly not to the degree we see in domestic policy.

There is actually a strong bipartisan consensus about how we should marshal our industrial base to address national security threats. Look at the Trump administration’s National Defense Strategy (NDS) and the major initiatives of the past four years and compare them to pronouncements from the Biden campaign as well as recent pieces by Hillary Clinton and Michèle Flournoy, the former under secretary under President Obama and likely secretary of defense in a Biden administration. Despite former Vice President Biden and his surrogates’ attempts to distance their plans from the Trump administration, there is much more similarity than divergence.

Under both a second Trump or a Biden administration, China would be viewed as the pacing threat to our national security through its theft of intellectual property, mercantilist industrial policies and military capabilities. Despite previously supporting commercial ties with China, Biden now views China as “the greatest strategic challenge” to the nation. 

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Both administrations would also continue to invest in commercial high technology areas such as artificial intelligence, hypersonics, cybersecurity and quantum computing to counter that Chinese threat. Many of these investments actually began under the Obama administration’s 3rd offset strategy, received additional resources under the current administration and will continue to grow. 

Innovations in contracting approaches would likewise receive support in either administration. There has been a clear emphasis in the last two administrations on broadening what the current National Security Strategy terms the national security innovation base, including new entrants and streamlining how the Department of Defense and other government agencies contract for work. From the Defense Innovation Unit and Army Futures Command to Middle Tier Acquisition authority and the Adaptive Acquisition Framework, these efforts have continued to grow and will almost certainly endure. 

The emphasis on strengthening domestic industrial capacity will likewise remain. The 2017-2018 whole of government review of the defense industrial base led to increased efforts to build domestic capacity in rare earth elements, specialty chemicals and microelectronics, a trend that has greatly accelerated in light of industrial manufacturing gaps exposed by the COVID-19 pandemic. This emphasis will clearly continue in a second Trump administration. Likewise, Biden’s “Made in All of America” plan in many ways mirrors the current administration’s language and investment priorities, with a slight twist to emphasize Democratic priorities such as clean energy and unions.

Increased domestic capacity-building efforts also have created opportunities for closer partnerships with allies and partners, which should also endure in the next administration. Frameworks such as the National Technology Industrial Base, which makes the United States, Australia, Canada and the United Kingdom one industrial base under law, and partnerships with close allies like Japan, Australia and Canada on rare earths, or South Korea and Taiwan on semiconductors, are ripe for fuller implementation under the next administration. 

The differences are mostly evident in budgetary priorities. Prior to the pandemic, defense budgets were already expected to be flat for the next several years. COVID-19 stimulus has added trillions of dollars to the U.S. debt, which could increase downward pressure on defense and other federal spending.

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A second Trump administration would almost certainly continue to prioritize NDS programs and budget levels. A Biden administration, on the other hand, would likely prioritize government contracting efforts in areas such as climate change and deemphasize planned spending on nuclear weapon modernization, legacy systems such as aircraft carriers, and, of course, the border wall.

While Biden has not called for reductions in defense spending, there is internal pressure within the Democratic caucus to cut national security spending in favor of domestic progressive priorities by 10 percent or, in some corners, 20 percent. As long as a Biden administration does not slash national security budgets along the latter lines, the overall impact will be localized to specific areas and programs, a common occurrence in any presidential transition. 

It is hardly a stretch to say that there are significant differences between the two presidential candidates in terms of style, manner and policy. But there is a surprising amount of agreement in how they would conduct the business of government. When the dust settles and a new president is inaugurated, we will likely see more continuity than change across the government contracting community.

Jerry McGinn is the executive director of the Center for Government Contracting in the School of Business at George Mason University.