Posts Tagged ‘hill’

For Defense Contractors, Lobbyists, More Than Just Sequester

Thursday, November 15th, 2012 by Geoffrey Lyons

THE PENTAGON HAS been the source of much worry in Washington lately.  An impending sequester that would strip billions from its budget is fueling premonitions of a fiscal cliff from which the whole nation would plunge.  And while lobbyists from all corners are scrambling to prevent across-the-board cuts, it’s the folks in defense who are most active in the frenzy.

As if this weren’t enough, another alarm is being sounded.  Susan Warshaw Ebner of Asmar, Schor, and McKenna claims that the impact of an emerging issue, and pending regulations to address it, will rattle the entire defense industry.  The issue: counterfeit parts; the stakeholders: virtually everyone.

“Sequester or no sequester, this is going to be a huge issue with huge costs,” said Ebner.  “It’s a virtual certainty that lobbyists and trade associations will have a role to play.”

Essentially, the Pentagon is overdue to roll out regulations that aim to purge the threat of counterfeit electronic parts entering defense equipment (a threat which is elaborated in a Senate report released in May).  Compliance from the industry will implicate all sectors of the defense supply chain to “prevent, detect, remediate, and investigate counterfeiting….”  What this specifically entails hinges largely upon how “counterfeit electronic part” is defined – something DoD was supposed to make clear in its guidance and regulations.

The costs of assuring compliance and ferreting out suspect counterfeits could be crippling.  Ebner evokes a scenario in which a defense contractor learns that a certain make and model of electronic chip, already integrated in systems being shipped abroad, was counterfeited.

“You are likely to face significant costs to figure out if you or any of your lower tier subcontractors and suppliers bought the counterfeit, who from, and if they were used,” said Ebner.   “The question of how to best Online Pokies define and implement requirements is squarely before the DoD right now.”

But while attempting to influence the regulatory language will be an important task for lobbyists, “the first thing lobbyists and trade associations need to do is educate their companies about the problem, the statute, and the risks.  Nobody can afford to be ignorant of what’s at stake.”

This last point is bolstered by the title of an advisory Ebner and her firm released in August: “Counterfeit Parts – An Emerging Issue You Need To Know About!”  It’s also bolstered by facts.  An October white paper released by the American Bar Association’s Task Force on Counterfeit Parts (which Ebner chairs), states that “remedial action” by the Pentagon will include “but [is] not limited to suspension and debarment…in the case of a supplier that repeatedly fails to detect or avoid counterfeit parts or fairs to exercise due diligence.”

For lobbyists closing their eyes and ears to anything but sequestration, some of this may be hard to swallow.

Timeline

12/31/11 – Congress passes Section 818, “Detection and Avoidance of Counterfeit Electronic Parts,” of the National Defense Authorization Act for Fiscal Year 2012.

3/16/12 – Deputy Assistant Secretary of Defense, Frank Kendall, issues a memo broadly defining “counterfeit material.”

3/26/12 – The Government Accountability Office releases a report detailing the availability of counterfeit military parts in China.  Sen. Kelly Ayotte (R-N.H.) says the report poses a “clear and present danger” and a “threat to our troops.”

5/21/12 – The Senate Armed Services Committee releases a report on its two-year study of counterfeit parts in the defense supply chain.

9/26/12 – Regulations outlined in 818 are due to be issued, but aren’t.

10/8/12 – House Intelligence Committee releases report on national security threats posed by Chinese telecommunications companies.

What K St. is Saying About the Election

Thursday, November 8th, 2012 by Geoffrey Lyons

As election night sulking and celebrating slowly ebbs outside the beltway, here’s a flavor of what the lobbying insiders are talking about:

On the “status quo election”

Republican lobbying firm Clark Lytle Geduldig & Cranford  in a memo to clients: “Leader Reid will have a tenuous majority from a policy perspective as several Democratic senators are philosophically closer to Republicans than many of their more progressive elected leaders.”

Lobbyist Bruce Mehlman of Mehlman, Vogel, Castagnetti: “The overwhelmingly high reelection rate of incumbents means Congress can attack the big issue logjam immediately. 2013 promises to be busier, more intense and more bipartisan than any year since 1997, with huge issues such as tax and fiscal reform actually starting to move.  Our Senate Democrats and House Republicans are already running full-speed.”

On lame ducks moving to K St.

Ivan Adler, principal at the McCormick Group:

  • “Those members who are seen [as] friendlier to business will have a much easier time getting hired by these firms than others.   The game is to get clients. You’re going to have to find people who can reach across the aisle in order to service them.”
  • If [Scott Brown] wanted to go lobby, I think he’s gold-plated.  Someone with Massachusetts interests should be looking at him.”
  • “The election has solidified the job prospects of the people working on the regulatory side, especially when it comes to ObamaCare and Dodd-Frank. Those laws are here to stay.  K Street is going to hire people who can play goalie. They are going to have to be able to stop a lot of pucks.”

Chris Jones, managing partner at CapitolWorks: “Democrats that have come from a red state and Blue Dogs will continue to be a prized commodity.”

The Hill: “Though a number of lawmakers who lost their election bids will likely enter the lobbyist pool, several senators who were already known to be leaving Capitol Hill next year — including Sens. Jeff Bingaman (D-N.M.), Kent Conrad (D-N.D.), Jon Kyl (R-Ariz.), Joe Lieberman (I-Conn.) and Olympia Snowe (R-Maine) — remain the most coveted prospects for K Street.”

On the lobbying agenda

Tim Ryan, chief executive of the Securities Industry and Financial Markets Association: “With the election now over, it is vital that we return to the work at hand, namely, the continued implementation of Dodd-Frank and addressing the fiscal cliff.”

Tony Podesta, founder and chairman of Podesta Group: “If the [House] Speaker and the [Senate] majority leader are for it, you have got a shot at it. There won’t be any markup where you can add a few extraneous items to the bill. … The lobbying will be very narrow.  The odds of a passionate member of the leadership adding something to the bill may be low. The odds of the rank-and-file membership getting something into the bill are zero.”

Bob Van Heuvelen, founder of VH Strategies: “We are not going to be adding things to this Christmas tree. We are going to be clarifying what programs should and should not be cut. There are cuts that are going to be made, and that leads to winners and losers, which leads to the need for advocacy.  It’s going to be hard, but it’s not going to be impossible.”

Former Rep. Billy Tauzin (R-La.), now special counsel to Alston & Bird: “If gridlock is a drought season for our kind of work, we’re going to enter the rainy season.”