Digest: Chaffetz Bill Targets Contractors with Past Due Taxes

Jason ChaffetzMention capturing almost $10 billion in lost revenue and even federal agencies will sit up and take notice. That’s the amount Rep. Jason Chaffetz (R-UT), House Oversight and Government Reform Committee Chairman hopes to collect if his Tax Accountability Act passes.

1) Bill Could Cause Contractor Debarment

Chaffetz’ bill was introduced similar bills in 2013 and 2015, but neither ever made it past the Senate. Now, with the GOP on the cusp of taking over leadership of both houses of Congress and the White House, Chaffetz is hoping his new effort will bear fruit.

Taxes DUEThe bill doesn’t only go after contractors. Federal employees with delinquent taxes are also within its sights.

“Federal employees, contractors, and grant recipients are not above the law,” Chaffetz said in a January 10th statement, reported by Federal Times. “Yet, year after year their tax delinquency is resulting in more than $1 billion owed to the federal treasury annually. This legislation ensures that these individuals are satisfying their tax obligations.”

Citing IRS figures, Chaffetz stated that more than 100,000 federal civilian employees owed more than $1 billion in unpaid income taxes in fiscal 2015.

And, contractors owe even more:

  • In fact, $7 billion+ more in back taxes spread across more than 63,000 defense, agency and General Services Administration contractors.

If the contractor has a heavy delinquent tax debt, the company wouldn’t be eligible for the contract and could face suspension of debarment.

The bill does offer exemptions for federal employees and applicants working to settle their tax debt, providing them 180 days to apply for the exemptions and for employees whose service “is in the best interests of the United States.”

Interestingly, Chaffetz also introduced H.R. 397, the Members of Congress Tax Accountability Act, which would require Congressmen to disclose their delinquent tax liabilities and require an ethics inquiry into those liabilities. It’s interesting because the President-elect has still not released his taxes.

Ahh, Washington …

 2) The Tech Industry’s 4-Pronged Lobbying Agenda

The Information Technology Industry Council (ITI), the trade group representing such tech luminaries and Google, Amazon and Facebook, has set its technology agenda and hopes to make inroads with the new Congress and Administration.

IT RevolutionIn a blog post, ITI summarized its four legislative priorities:

  1. Updating the Tax Code: Outdated and uncompetitive, the U.S. tax code is in need of a major overhaul. Congress should pass pro-growth tax reform legislation that includes a lower, competitive corporate tax rate, a market-based international tax system, and robust incentives for innovation and research and development (R&D).
  2. Ensuring Market Access for Technology Products and Services: Congress and the administration should pursue a forward-thinking trade agenda that opens new markets; levels the playing field for U.S. technology products and services worldwide; and aggressively responds to unfair trade restrictions, including prohibitions on forced localization of goods, services, or data.
  3. Streamlining and Reforming the Acquisition and Procurement Process: Federal agencies spend approximately 80 percent of their total technology budget on maintaining outdated legacy computer systems. Congress should reform the way the federal government procures and utilizes technology to ensure all government users keep pace with innovation and modern solutions.
  4. Modernizing U.S. Transportation and Infrastructure: Our nation’s infrastructure is in dire need of an upgrade. Investing in infrastructure that integrates both physical and digital elements can increase economic productivity by 60 percent when compared to investment in traditional infrastructure alone. Congress and the administration should ensure infrastructure funding fully leverages the significant economic and societal benefits that technology and smart infrastructure can offer.

Getting action on a government-wide IT modernization act may require a Herculean effort. A House version of a bill passed unanimously last fall. However, the bill died in the Senate, whose members could never agree on the bill approach of developing working capital funds within each agency to pay for the upgrades of legacy systems.

But, new unified GOP leadership may lend itself to doing something about ancient federal IT — or not. It’s still Washington.

Other Contracting News

 3) Military Pushes Readiness over Increase in Size

One of Donald Trump’s campaign promises was to spend big-time bucks to buy more ships, planes and increase troops for our nation’s military. The branches, however, have other ideas in mind.

22nd Marine Expeditionary Unit conducts bilateral training with Greece

Trump expressed interest in increasing ground forces by at least 60,000 troops.

Army Chief of Staff Gen. Mark Milley warned that his service has other, higher priorities before it can increase its end strength.

Similar reactions are coming from the Navy. Trump talked about increasing the current 274-ship military fleet to 350 on the campaign trail.

Vice Chief of Naval Operations Adm. William Moran said the Navy wants its first extra dollar to go toward readiness before the service even thinks about additional ships.

For one thing, sequester and budget cuts have forced maintenance to the back burner:

Deferred maintenance is insidious, it takes a toll on the long-term readiness of the fleet,” Moran said. “When the transition team came around to all of us in the building and asked us what we could do with more money right now, the answer was not to buy more ships. The answer was to make sure the 274 that we had were maintained and modernized to make 275 ships worth of combat power, then we will start buying more ships.”

Gen. Milley stated similar goals. While acknowledging that modernization in air defense, aviation and electronic warfare were important, he told an audience at an Associate of the United States Army event in Arlington, Virginia this week:

Readiness will remain the number one priority. If we’ve got some significant increase in money we will continue to prioritize readiness. Having said that, we have got to get after modernization, so there’s going to be a balance between the two.”

Milley’s remarks also mirror those of outgoing Army Secretary Eric Fanning, who said:

A raw number doesn’t necessarily tell you what an army is and what capabilities an army brings to a fight. It’s very important that we think in terms of a balanced program. It’s not just people. It’s people that are trained and equipped. If we are asked to keep more force structure without an increase in the budget in some way then we have more people with less training and less equipment. That could easily, quickly become a larger Army that’s less effective than the one we are trying to build now.”

Of course on the campaign trail, it’s a lot sexier to talk about building ships and and planes than it is to explain the need for more maintenance and troop training. Hopefully, the incoming administration will listen to the people who got us here.

Other Defense News

Cybersecurity News

  • The Chairman of the House Committee on Homeland Security, Rep. Michael McCaul (R-TX)Says that he has become the target of phishing emails on an “almost daily basis.” McCaul explained, “I have had attachments coming to me from people I know but about subjects that are totally unrelated to that person, so I know it’s phishing.” [FedScoop]
  • The Department of Homeland Security (DHS) stated thatEINSTEIN 3 Accelerated (E3A), its cyber-threat detection and defense system, is now providing cybersecurity risk monitoring and response services to 93 percent of federal civilian executive branch networks. [Federal Times]
  • Ironically, just a week before the incoming administration plans to institute a federal hiring freezeOPM launched a new websiteCyberCareers.gov — to assist federal agencies in stepping up their cyber talent recruiting. The site has been designed to spot certain keywords, like cyber warrior, Army Ranger, Navy SEAL, etc., so people with advanced skills can immediately be flagged and brought to the attention of key hiring managers. [NextGov]

Tech News

  • The Pentagon wants technology that could let troops share data securely …  From wherever they are and whatever devices they are using. DARPA has launched a new program for building apps to process several levels of security classifications on a single device. The agency hopes to create a system that allows for the secure exchange of information at varying classification levels, using unsecured commercial networks including Wi-Fi and cellular, through a mix of devices such as tactical radios, laptops and handheld devices. [NextGov]
  • Engineers from the Army Research Laboratory reportedBeing able to build a mission-tailored unmanned aerial vehicle in 24 hours using a 3-D printer in a recent experiment at Fort Benning, Georgia. The system enables soldiers requiring unmanned aerial vehicle support to input their requirements into mission planning software and  receive a 3-D-printed aerial vehicle within a matter of hours. [Army Blog]

International News


And, finally …

Who doesn’t love gadgets? From smartphones that make it possible for you to SnapChat your family from the top of a mountain to battery-powered cars that whisk you down the road while you catch 40 winks, Americans love technology.

So, a couple of British documentary filmmakers decided to explore the world of gadgets and broadcast their videos on The Verge’s YouTube channel.

James Bareham explains:

I went to art college in Bristol in England, which is also home to the BBC Natural History Unit, renowned for producing spectacular nature documentaries The Blue Planet, Planet Earth, and Life on Earth, narrated by Sir David Attenborough. I grew up watching BBC wildlife documentaries like these and they have clearly left their mark.

And so the idea for Gadget Earth was born. Will and I bravely set off to explore the outer recesses and nether regions of CES, and the deserts of Nevada, in search of gadgets great and small. Our quest was to observe and record the behavior of gadgets both in the wild and in captivity, and to bring this fascinating journey of discovery to The Verge.

With that introduction, here’s the first installment:

For the geek in all of us …

Posted under: Acquisition, Army, Budget, Congress, Contract News, Cybersecurity, Defense, Dept. of Homeland Security, GSA, Mobility, Navy, TechTalk

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