Emerging Technologies and Government Contracting: Shaping the Future through White House Initiatives

The integration of emerging technologies, including artificial intelligence (AI), quantum computing, and biotechnology, is transforming the government contracting landscape. Federal agencies, along with White House-backed initiatives, are spearheading these innovations.

The Biden Administration implemented emerging technologies a cornerstone of its agenda. In 2022, the White House launched the AI Bill of Rights, which emphasizes ethical AI development and use, including within government contracts. This initiative calls for contractors to ensure AI systems used by federal agencies are transparent, free of bias, and safeguard privacy.

The National Quantum Initiative was signed into law in 2018 and expanded under the current administration which drives quantum research across agencies like NASA, the National Science Foundation (NSF), and the Department of Energy (DOE). These programs provides many contracting opportunities in areas like quantum encryption and advanced computing, with the DOE’s Quantum Information Science Research Centers leading the charge.

The CHIPS and Science Act of 2022, another significant White House initiative, aims to revitalize domestic semiconductor manufacturing. This act includes provisions for funding federal research and development contracts to enhance chip production capacity, crucial for national security and technological innovation.

As these White House initiatives progress, government contractors should understand how to meet the perpetually evolving demands of federal agencies by prioritizing technology in the nation’s ecosystem. 

Understanding Foreign Ownership, Control, or Influence (FOCI) in Government Contracting

Foreign Ownership, Control, or Influence (FOCI) is a critical consideration for any company engaged in government contracting, particularly when working on projects involving classified information or national security interests. FOCI refers to the extent to which a foreign entity can influence or direct the management and operations of a company that holds a security clearance or participates in classified government work. It's essential for both contractors and the government to properly address FOCI to safeguard U.S. national security.

Here are some key points regarding FOCI and its significance in government contracting:

1. National Security Concerns

FOCI poses a direct concern for national security! The U.S. government must ensure that companies entrusted with sensitive or classified information are not subject to undue foreign influence. Foreign entities with conflicting interests to those of the U.S. could pose significant risks if left unchecked. Failure to manage FOCI could endanger national security and lead to adverse consequences for both the contractor and the government.

2. Regulatory Compliance

Government contractors must comply with strict regulations regarding FOCI, enforced by agencies like the Defense Counterintelligence and Security Agency (DCSA) and the Committee on Foreign Investment in the United States (CFIUS). Non-compliance can lead to severe penalties, including contract termination, financial penalties, or legal ramifications.

3. Impact on Contract Eligibility

FOCI can significantly affect a company's eligibility to compete for government contracts, especially those involving sensitive or classified projects. Contractors with substantial foreign influence may be disqualified from participating in specific procurements. To remain competitive, contractors must actively mitigate FOCI concerns to ensure they are eligible for such opportunities.

4. Mitigation Measures

Several strategies exist for mitigating FOCI concerns. Companies can implement robust corporate governance measures, establish proxy agreements, or form voting trusts to ensure that ultimate control remains with U.S. citizens or entities. These steps help reassure the government that foreign entities do not have undue influence over critical decisions related to national security.

5. Continuous Monitoring

Managing FOCI is not a one-time task but an ongoing requirement. Contractors must regularly review and assess their ownership structures, foreign partnerships, and any changes that may impact their FOCI status. Consistent monitoring and periodic reporting are necessary to remain compliant with evolving FOCI regulations.

Resources for Government Contractors

To help navigate FOCI requirements, several resources are available to government contractors:

• Defense Counterintelligence and Security Agency (DCSA): Offers information and guidance on security clearances and FOCI mitigation.

• Committee on Foreign Investment in the United States (CFIUS): Oversees national security implications of foreign investments in U.S. companies.

• National Industrial Security Program (NISP): Provides regulations and procedures for safeguarding classified information in government contracts.

• Defense Acquisition University (DAU): Offers training and resources on government contracting, including FOCI regulations and mitigation strategies.

Understanding and proactively managing FOCI is crucial for government contractors. By adhering to the necessary regulations and staying vigilant, companies can protect their interests while contributing to the nation's security.

Unlocking Connecticut’s Potential Through Government-Led Innovation Programs

Connecticut’s strong industries—manufacturing, aerospace, biotech, and defense—are uniquely positioned to benefit from government-led innovation programs like those from the Defense Advanced Research Projects Agency (DARPA). DARPA funds breakthrough projects across high-risk, high-reward areas such as artificial intelligence, advanced materials, biotechnology, and cybersecurity. Engaging with DARPA brings Connecticut businesses access to significant resources, expanding capabilities, visibility, and growth opportunities both locally and beyond.

Key Sectors in Connecticut Primed for DARPA Innovation

• Aerospace and Defense Manufacturing: DARPA’s focus on advanced autonomous systems, propulsion, and materials science directly aligns with Connecticut’s aerospace and defense sectors. These projects provide funding and collaboration opportunities, allowing Connecticut manufacturers to lead in developing next-generation capabilities.

• Biotechnology and Medical Innovation: With increasing attention on health innovation, DARPA offers Connecticut’s biotech firms essential resources for medical diagnostics, biotechnology, and personalized medicine research. These programs help address critical challenges in defense and civilian health.

• Cybersecurity: DARPA’s cutting-edge projects in infrastructure and digital security present substantial opportunities for Connecticut’s growing cybersecurity sector, supporting advanced solutions that reinforce national security.

Getting Started with DARPA and Government Contracting

To explore opportunities, innovators can review current DARPA solicitations on the DARPA website and consider government contracting as a pathway to funding for research, scaling production, and expanding supply chains. The Connecticut APEX Accelerator offers guidance in proposal writing, compliance, and contract navigation to make government contracting more accessible and maximize engagement in these programs.

By connecting with DARPA, Connecticut businesses can make meaningful strides in leading innovation, elevating both the local and national industrial base.

Contact CT APEX to learn more about partnering in these programs and advancing Connecticut’s role in transformative innovation.

Cybersecurity Updates in the GovCon Space

On October 11th, we heard from the Department of Defense that they have finalized rulemaking for the upcoming CMMC 2.0 cyber standard. The purpose of CMMC is to verify that contractors are protecting Federal Contract Information (FCI) and Controlled Unclassified Information (CUI) appropriately. The most significant update is that we now have confirmation that there will be 3 Levels under CMMC (instead of the previously proposed 5). We now know Level 2 will be associated with the NIST SP 800-171, while Level 3 will be associated with the NIST SP 800-172. The contractors that will fall into Level 1 and a subset of Level 2 will be eligible to self-assess their companies. For "prioritized acquisitions" under Level 2, this will require a Certified Third Party Assessor Organization (C3PAO) to do the assessment. And for those that fall into Level 3, those contractors will need to have a Government-led assessment.

Another huge update is that we have heard this month is that the FAR CUI rule has cleared review with the Office of Information and Regulatory Affairs, or OIRA. This FAR clause will require all federal contractors, not just in the Defense Industrial Base, to comply with cyber standards. This would make the NIST standards applicable to any contract with CUI. If you previously thought that because you don't work with DOD, that cybersecurity does not apply to you - you will need to think again!

With these new advancements in the cybersecurity space, and with the CMMC deadline inching closer (implementation in contracts is still anticipated to happen in 2025), CT APEX urges our clients to not delay your compliance journey. We are here to help make sure you remain eligible for contract opportunities.

"...the only way to outpace the adversary in this context is to secure the building blocks of cyberspace. These foundations are not abstract concepts floating in the digital ether; they are vital to everyday life. And when they are not secured, the resulting damage and destruction are evident.”

Read about the Final Rule here

Resources for Small Business

Update on the New SBA Portal

The United States Small Business Administration (SBA) has heard many times the need for a new system/interface for its users. The wait is no longer. The SBA has been working on a new portal for small businesses. This site is your one stop. Here you will upload your business information, and the system will figure out which certifications you are eligible for. Then you will fill out one application for all certifications. This leads to less time spent as the business owner and government official reviewing the applications. This will also allow for quicker processing time for approvals and responses on any necessary changes. This system covers 8(a) Business Development, HUBZone, Veteran-Owned and Women-Owned programs. Below is a link to an article that explains the changes further:



https://delawarebusinesstimes.com/news-briefs/sba-launch-mysba-certifications/ 

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