Excerpt from, "Forecast Calls for Stormy Business Climate" in NDIA's Business and Technology Magazine, National Defense.
This should be a “wake-up call” to companies that do business with the government, said Francis Q. Hoang, a partner at FH+H PLLC, another firm that represents federal contractors. Although it would be unfair to cast blame on the entire industry for the Snowden affair, the case is a reminder that industry has to be always on guard. Companies have to constantly review their compliance programs, he said. “I’m sure Booz Allen is taking a very hard look.” Whether the NSA leak will have lasting repercussions on the contracting sector remains to be seen, Hoang said. “Existing regulations provide plenty of enforcement tools for the government to encourage contractor compliance and penalize wrongdoing. … I would expect, however, that agencies would use those existing tools more aggressively following the NSA leak.” Potentially of greater concern to industry, he said, is that many contractors will see their costs increase indirectly through higher insurance premiums, legal and other compliance costs, and more customer scrutiny, which will require additional time and energy in response. There also will be heightened oversight of areas not related to the recent leak, such as more frequent audits by the Defense Contract Audit Agency or the Defense Contract Management Agency that might be looking to investigate issues that previously may have gone overlooked, said Hoang. “These will all drive up overhead costs and administrative expenses.”