The election of Donald Trump creates a drastic shift in government relations strategies in DC.

With a new year, companies and not for profits should be reevaluating their government affairs programs just as they will review their tax, marketing and financial planning. More significantly, this year, a new U.S. government will form, and a new presidential administration commence.

U.S. and foreign businesses and industries should accordingly carefully review their government relations, lobbying, and public affairs strategies in Washington, DC. Companies that have engaged in government relations during the Obama years now need to fully re-write their government relations plan in a city soon to be led by President Donald J. Trump. Those engaging in government affairs for the first time need to move fast.

Trump’s executive team promises to be very different in governing philosophy, public policy, and management than President Obama’s team; but based on Trump’s cabinet picks; it will be substantially different than President Bush’s as well.

Based on that absolute shift, business and industry must reevaluate its government relations strategy for 2017. With a new pro-business focus, no company or industry will want to be on the sidelines for the next four years. Those businesses that have existing government affairs efforts in Washington need to reassess and revise old plans and write a new ones. And those that want to engage in a first-time government relations program need to get in the game now. Based on President-elect Trump’s cabinet choices thus far, the policy and management differences with the outgoing Obama Administration will be substantial; aimed at systemic change in nearly every area of government policy that affects business:

 

  • Appropriations, budget, tax, trade
  • Energy, oil/gas, renewable energy, energy management
  • Transportation, infrastructure, air and shipping transport
  • FCC and telecom
  • Financial services, Dodd Frank, digital assets
  • Healthcare, life sciences, pharma, medical technology
  • Gaming, hospitality
  • Education
  • Municipality
  • Labor, immigration
  • Ocean technology, environment, climate
  • Internet, cyber, privacy, social media
  • National security & defense
  • International Relations

 

Thus, if your company has had a government relations effort during the Obama Administration, then a re-evaluation is critical because what was advocated by the U.S. government between 2009-2016 will now be substantially dismantled and replaced with a new governing philosophy and public policy agenda.

For instance, President-elect Trump has chosen conservative U.S. Rep. Tom Price to serve as his Secretary of Health and Human Services and to overhaul the Affordable Care Act (ACA) (Obamacare). Price is the former chair of the Republican Study Committee, the group of movement conservative members of the House of Representatives. Moreover, in 2013, he introduced in Congress a substantive bill to replace the Affordable Care Act.

Trump’s choice of Price to head HHS will stand in exact contrast to the political ideology and pro- ACA position of the current HHS Secretary, Sylvia Burwell.

Other members of his cabinet also come from a more conservative, pro-growth, limited government, less government regulation philosophy including Governor Rick Perry, as the new Secretary of the U.S. Department of Energy, Andrew Puzder, CEO, Hardee’s, to be Secretary of Labor, Scott Pruitt, Attorney General of Oklahoma, to head the Environmental Protection Agency (EPA), Linda McMahon, a principal with the Worldwide Wrestling Federation, as the new Administrator of the Small Business Administration, Dr. Ben Carson, the new Secretary of Housing and Urban Development, Wilbur Ross as Secretary of Commerce, Steve Mnuchin, Secretary of the Treasury, U.S. Rep. Rep. Ryan Zinke, the next Secretary of the Interior, United States Marine Corps General James Mattis (ret.) as Secretary of Defense and Betsy DeVos as Secretary of Education.

To be fully prepared, companies need to take the time necessary to strategize a new plan, hire the right professionals in Washington, identify the right issues for the company, and be a ready to educate the “new” U.S.  Federal  government.

Duane Morris Government Strategies has a Washington, DC-based government relations and lobbying office for U.S. and foreign companies, organizations, and governments that want to develop a more professional and interactive relationship with the U.S. federal government; Congress, the Executive Branch and regulatory agencies.

We can assist with congressional relations, regulatory affairs, developing positive brand equity for your company throughout the U.S. government, business to government (b2g) contracts, lobbying on specific legislative or regulatory issues, advising on current policy and political developments, and assisting with industry associations where your company is a member. We can provide a comprehensive, substantive and personalized suite of U.S. government affairs services for a cost-effective and competitive budget.

 

 

Procurement Lobbying

There are two main types of lobbying, the exact legal definitions of which vary from state to state. The first type of lobbying is direct lobbying. In general terms, direct lobbying involves a person or entity attempting to influence legislation in a way that favors the client. Direct lobbyists typically interact with legislators or government employees involved in creating legislation.

The other main type of lobbying is known as grassroots lobbying. Grassroots lobbying focuses on influencing public opinion in favor of  or opposition to particular legislation. This type of lobbying also encourages members of the public to take action themselves in a variety of ways, such as by contacting their elected officials or signing petitions.

Often ignored by the vendor community is Procurement lobbying. This is of particular importance as federal, state, and local governments purchase trillions of dollars in goods and services.

Procurement lobbying involves appreciating:

  • all procurement lobbying laws in the 50 states, the federal government, and more than 230 municipal jurisdictions, along with common-language descriptions of these same ordinances and statutes.
  • advisory opinions interpreting lobbying laws
  • pay-to-play laws on every government level
  • full descriptions of registration and reporting requirements
  • jurisdictions requiring registration as a lobbyist for procurement activities
  • contingent lobbying prohibitions by jurisdiction
  • summaries of gift laws;

and pre-RFP pursuit, meaning shaping upcoming procurements in conformity with the above points.

It can be difficult to find the right person to talk to in Government Agencies and companies. That’s a major reason why people don’t do pre-RFP pursuit. It’s also why many companies are in perpetual sales mode.

Before you can influence the RFP or gain pre-RFP customer insight, you have to make contact with the right people at the customer. Here are some ways to do that:

  1. Past contracts. Sometimes the best source of data about future purchases starts by identifying who the buyers were for similar purchases in the past. So start with mining the data and looking up past contracts through online databases. The points of contact may not always be up to date, but it’s a good place to start.
  2. Associations. What associations might the customer belong to? Do they publish their membership or attendee lists? Do they hold meetings where you might meet face to face? Do they publish presentations or documents that might mention names?
  3. Councils, standards setting organizations, and committees. Are there any other organizations the customer might participate in? In addition to their membership list, do they publish minutes or other documents that might provide insight or contacts?
  4. LinkedIn profiles. Can you find your points of contact on LinkedIn? If you do, can you find their co-workers and business partners? In addition to searching by demographics, you can also search by acronyms, technical terminology, program names, functional terminology, etc.
  5. LinkedIn groups. Look up what groups on LinkedIn your customers have joined. If they post, see what you can learn. If they read, you have an opportunity to put words in front of them. Just simply knowing what groups they are in can provide insight. If you can’t find your customers’ profiles on LinkedIn, maybe you can find them in a relevant group.
  6. Trade shows and events. What trade shows and events do they host or participate in? Can you get introduced? Can you meet face to face? What can you learn? What can you demonstrate?
  7. Websites and org charts. Does the customer have a website? Does it name names? Does it have an org chart that can help you navigate? Can you do an image search for a relevant org chart?
  8. Publishers. There are companies that research, aggregate, and publish databases that include customer contact information. Some can save you a huge amount of time.
  9. Google. Learn how to use Boolean search operators. Then combine fragments of names, email addresses, titles, projects, technology, locations, etc. to see if you can find the needle in the haystack.
  10. Freedom of Information Act (FOIA).  If it’s a Government customer, you can try doing a FOIA for rosters, staff directories, points of contact, organization charts, committee memberships, attendance lists, etc.
  11. Teaming partners. Who do your subs or primes know? Can you get a referral or introduction?
  12. Alumni. Not yours. Theirs. Where did they go to school? Can you track them down through Alumni organizations or discover someone else who knows them?
  13. Certification registries. If their job requires specific certifications, are there lists or registries of people with that certification?
  14. Look for coordination points. Where does the customer’s organization need to coordinate with the outside world? That’s where people will be visible.
  15. Look for common interests, platforms, tools, and requirements. Show interest in their interests. Be where they will be. Then be helpful when they arrive.

Procurement Lobbyists can assist with all 15 approaches but most importantly they bring years of personal networking: a wide cast of personal relations to allow you to expand your network. Because it’s not about selling. It’s about getting to know each other and working together. It’s about professional development

“Is Congress an endangering species?”

For businesses hoping to have an influence on the course of regulation, much of the action has moved from Congress to the executive branch. The last few years have seen an expansive exercise of federal power through the issuance of new regulations, the reinterpretation of existing ones, and the enforcement of both, as well as more novel regulatory approaches. The trend shows through in virtually every regulatory area, and it looks likely to continue through 2015 and beyond.

On the one hand, the Obama administration is proud of its assertive approach, pointing to progress even in the face of what it calls a “do-nothing” Congress. By contrast, congressional Republicans — and some constitutional scholars — have accused the administration of regulatory overreaching.

But one thing seems certain about this new wave of administrative activism: it spells new headaches for business.

More regulation means more compliance costs and challenges. More aggressive enforcement means harsher penalties and more intrusive sanctions for failure to comply. And more key decisions being made by the executive branch — rather than by Congress or the courts — means businesses have to be even more focused and strategic to make their views known and influence the outcomes.

Federal agencies have been testing the limits of their statutory authority. Like the president, agency leaders also see themselves as taking up the mantel that Congress dropped.

For example, no major environmental statute has undergone a major reauthorization since the 1990s. In the meantime, new environmental challenges — greenhouse gases, new findings about substance toxicity, and the like — have emerged. In some cases, there is broad agreement — among stakeholders, if not in Congress — that revisions are needed because the laws as currently written cannot be interpreted to address these newer concerns.

As the number and scope of administrative rules multiply, so do the penalties for non-compliance. If just measured in fines alone, these penalties are rising fast: more than $13 billion in 2014, up from about $7 billion in 2013, according to economist Brandon Garrett at the University of Virginia. (In 2008, the figure was closer to $2 billion.) And, in the realm of consumer protection, for example, the Federal Trade Commission has been increasingly willing to go to court to seek monetary damages or consumer redress rather than settling for an injunction- blocking future non-compliant behavior.

Moreover, enforcement actions are increasingly resulting in much more than a fine and an order to stop the violations. Prosecutors are demanding deep and very specific changes in management and embedding monitors in the company to ensure that they occur. Settlements are requiring corporate policy changes, staff training, remedial community training programs, and more.

Additionally, companies facing even the threat of enforcement actions have allowed regulators to influence their policies in new ways. For example, after a safety crisis, General Motors signed an accord with the National Highway Traffic Safety Administration in which it agreed to implement training policies that expressly disavow statements diluting the safety message in internal communications. The move is part of a growing trend of agencies trying to change corporate culture.

In another case, the Consumer Product Safety Commission is calling on retailers to pull products from their shelves when the agency cannot convince manufacturers to recall them. Retailers are increasingly willing to go along; now that the commission’s civil penalty cap has increased from $1.8 million to $15 million.

Regulators are also becoming more aggressive in their efforts to root out alleged misdeeds, largely through efforts to recruit insiders. For example, in 2013 the government enhanced whistleblower protections for employees of government contractors and extended the protections to subcontractors. When coupled with significant awards afforded to whistleblowers, the protections amount to deputizing the workers of America to blow the whistle on their employers and act as a partner in enforcement.

The recent regulatory expansionism will continue through 2015 — and likely beyond — thanks to a striking confluence of events.

  • Firstly, the third year of a president’s term tends to be the most aggressive in terms of policymaking. Midterm elections are over, political appointees are firmly in place, and the administration is acting with its legacy in mind. By contrast, in 2016, the administration may face pressure to pull back on rulemaking for the sake of pre-election politics or transitional smoothing.
  • Secondly, the 2013 decision by Democrats to strip Republicans’ ability to filibuster the president’s nominees has resulted, for the first time in a decade, in a federal appeals bench — including the all-important D.C. Circuit — in which judges appointed by Democrats considerably outnumber Republicans. These judges are generally thought to be more receptive to the regulators in legal challenges to the administration’s authority.
  • Thirdly, a U.S. Supreme Court ruling in 2013, City of Arlington v. FCC, appears to give agencies wide discretion in deciding the scope of its statutory authority. Arlington continues a tendency running back 30 years for courts to defer to agencies when there is ambiguity about whether the agency is allowed to act under its authority established by Congress. As a result, unless Congress clearly mandates otherwise, agencies can expand their authority as far as they see fit. And since their statutory authority tends to be quite broadly stated, agencies have a lot of leeway.

Companies struggling with compliance do have a range of options, however.  As they devise their compliance strategy, companies may want to seek guidance from agencies on how their rules might apply to them; seek waivers, exceptions and mitigating guidelines; and develop sound policy reasons to have the agency construe its rules in a manner that achieves the regulatory goal but is less onerous for a company.

Congress still has a role to play in affecting an industry’s regulatory burden. For one, a legislator can write letters or hold hearings in an attempt to influence agencies on important issues. Congress can constrain agency actions by appropriations riders or budgetary restrictions. And legislative wins are still possible for companies that can find issues that can be agreed by both sides of the aisle as job creators.

It is more important than ever to build and sustain relationships with relevant agencies. That means interacting with them regularly and educating them about issues important to your industry. The goal is to build your reputation and their comfort level well before any sensitive issues come up, such as potential enforcement actions or proposed regulations you want to fight.

As in the case of agency leaders, it’s important for companies to establish ongoing relationships with relevant members of Congress, rather than reaching out only when they need something from them.

New Jersey Gov. Chris Christie Absolute Veto- “Made in America Bill”.

New Jersey Gov. Chris Christie on Thursday vetoed a package of bills that would have required the use of U.S.-manufactured goods for a greater number of public contracts, including 50% US. sourced components, contending that the measures would hurt international development and increase costs for the public.

New Jersey already requires U.S.-manufactured goods for public works contracts, local public contracts, state construction contracts and local school contracts, but S1881 — which the state Legislature sent to the governor in December — would have covered all state contracts, including those of state universities. Companion bills sought to impose similar requirements on four bi-state agencies: the Port Authority of New York and New Jersey, Delaware River Joint Toll Bridge Commission, Delaware River Port Authority, and Delaware River and Bay Authority.

Christie said in his veto messages that the bills would “constrain purchasing decisions by setting artificial thresholds of reasonableness based almost exclusively on price.”

As a strong indicator where he stands on corporate inversions, Christie also had kind words for foreign-headquartered companies, which he said are responsible for more than 225,000 jobs in the state.

“These global companies seek global marketplaces that will support their investments. Those companies, in turn, infuse billions of dollars into New Jersey’s economy, not only in direct investment and jobs, but indirectly to thousands of other New Jersey businesses that provide goods and services to support their operations,” the governor said. “In stark contrast, these bills will chill international development and increase costs borne by taxpayers.”

While lawmakers tried to build flexibility into the proposed requirements by allowing public entities to secure waivers if U.S.-made products weren’t available or were too expensive, Christie said the end result would have been a more-complex bidding process and more-burdensome reporting requirements.

“Rather than helping Americans, these bills will simply drive up the price of doing business, and threaten job creation,” the governor said. “Building economic walls around our state, or our nation, will not improve the lives of our citizens.”

In a statement, Senate President Steve Sweeney, D-Gloucester, stated that  the veto was  a missed opportunity to support domestic businesses.

“The ‘made in America’ bills are more than an expression of economic patriotism. They could have been an effective way of boosting the state’s economy,” said Sweeney, a sponsor of the measures. “The recovery in New Jersey has lagged behind other states, so we should be doing all we can to generate economic growth and to promote economic opportunity.”

But the governor’s action won praise from the New Jersey Business and Industry Association.

“Governor Christie made the right decision,” NJBIA President Michele Siekerka said in a statement. “The bill would be unworkable given the nature of modern global supply chains, which make it difficult to find goods with U.S.-sourced components.”

NJ Legislature Considering Special Tax Zone For Atlantic City

In a 6-3 vote with one member not voting, the New Jersey Assembly Commerce and Economic Development Committee on Thursday approved a bill that would create an urban enterprise zone in Atlantic City; an effort to incentivize businesses with tax credits to spur economic development in the ailing resort city.

The committee signed off on A3920, authorizing the creation of an urban enterprise zone in Atlantic City for a one-time term of 10 years to provide the city with a shot in the arm to create jobs, spark economic development and provide vital property tax relief.

The UEZ designation would allow qualifying businesses in Atlantic City to collect a sales and use tax that’s half of what it would normally have to collect and to receive up to a $1,500 tax credit for every new permanent full-time employee they hire.

The bill would also allocate a significant portion of the sales and use tax collected during the 10-year period to go directly back to the city for property tax relief.

The measure is an attempt to stem the bleeding in Atlantic City, which has been hit with a brutal downturn in gaming tax revenues amid heavy competition from rival gaming destinations that has prompted the shutdown of four casinos — Atlantic Club, Revel, Showboat and Trump Plaza — and the loss of 8,000 jobs in 2014 alone.

However, some committee members expressed concern as to whether UEZs have been proven to spur economic development in the cities and regions where they’ve been established. New Jersey’s UEZ program, which was launched in 1983, currently has 32 designated UEZs.

The woes in Atlantic City have been mounting. Gov. Chris Christie last month installed an emergency management team to oversee the city’s finances after a brutal downturn in gaming tax revenues. In addition to the more recent shutdowns in September of the Revel, Showboat and Trump Plaza, another Atlantic City casino, Trump Taj Mahal, is also at risk of closing as a bitter feud between its owners and workers’ unions threatens to derail a potential Chapter 11 reorganization for Trump Entertainment Resorts Inc.

NJ Senate Passes Bill To Force Offshore Wind Approval

The New Jersey Senate passed a bill Thursday that would force the state Board of Public Utilities to approve a wind power plant that could be one of the first in the nation, a plan the board has blocked twice.

The bill, which now goes to the Assembly, would require the BPU to greenlight Fishermen’s Energy LLC’s $188 million, 25-megawatt demonstration plant off the coast of Atlantic City. The Senate also passed a resolution urging the board to adopt regulations from a 2010 law that was meant to push the Garden State to the forefront of wind-generated power.

The New Jersey project has hit administrative roadblocks since Fishermen’s first filed its application in 2011. The matter is back before the New Jersey Appellate Division after the BPU again denied the plans Nov. 21. The regulator previously shot down the application in March, which Fishermen’s appealed, but the court returned the case to the agency in August to consider the $47 million grant commitment from the U.S. Department of Energy.

Bill S2711, sponsored by Democratic state Sens. Bob Smith and Jim Whelan, passed the Senate 22-14 and will now go to the Assembly. Democratic Assemblyman Wayne DeAngelo, head of the Telecommunications Committee and one of the Assembly bill’s sponsors, says he intends to bring the bill up at his committee’s meeting next month.

In addition to mandating approval of the wind farm, the bill also removes language from the New Jersey Offshore Wind Economic Development Act (OWEDA) that requires an applicant to submit an economic cost-benefit analysis to the BPU for approval. That was the grounds for the board’s rejection of the Fishermen’s project.

The BPU has refused to budge from its view that the project wouldn’t provide a net economic and environmental benefit to New Jersey ratepayers, as the OWEDA requires. The regulator also has found that Fishermen’s hasn’t demonstrated financial integrity.

According to the BPU, Fishermen’s hasn’t shown that the project is viable at its proposed price for those subsidies — $199.17 per megawatt-hour — without $100 million in federal funding, and it doesn’t have that money in hand. Uncertainties remain over Fishermen’s receipt of the DOE grant, and there’s still the issue of absent funding from an investment tax credit that would help the developer reach that $100 million figure, the BPU said in its November decision.

The second measure, SR112, sponsored by Smith and Democratic Senate President Steve Sweeney, would push the BPU to implement OWEDA and another law, the Electric Discount and Energy Competition Act.

The law directed the agency to develop an offshore wind renewable energy certificate program that would mandate a percentage of electricity sold in the state to be from wind energy. The offshore wind renewable energy certificates will help finance the project and ultimately be passed on to ratepayers.

A Rising Need

New Jersey needs to join the ranks of more than 30 other states with broad legislation permitting public-private partnerships (P3s) for transportation projects.

There are many models out there to choose from- including Virginia and Florida and Pennsylvania.

A Public and Private Partnerships for Transportation Act should minimally allow for the Department of Transportation DOT and other public transportation entities to partner with private companies to finance, deliver, operate and maintain transportation-related projects. P3s may receive all or a portion of the revenue generated (such as via tolls or user fees) in exchange for providing services or facilities. The law should apply to the construction of new transportation facilities and the improvement of existing facilities.

Under the law, the state would, for instance, retain ownership of a busy roadway while a private firm in a P3 would build new express lanes along that roadway. Following construction, the private firm would receive a return through tolling drivers who use the express lanes.

The law should create an independent Public-Private Transportation Partnership Board, to review and approve P3 projects. Private investors ought to be able to pitch their ideas to the board, in a manner prescribed in approved guidelines for considering both solicited and unsolicited proposals. If the board determines that a state operation would be administered more efficiently by a private company, the private company will be authorized to submit a proposal and enter into a contract to either completely or partially take over that operation for a defined period of time.

Proposals for P3s will be evaluated on the basis of pre-established criteria with assigned weights, including: cost; financial commitment; innovative financing; technical, scientific, or socioeconomic merit; public reputation, qualifications and financial capacity of the private entity; ability of the project to improve economic growth, improve public safety, reduce congestion, increase capacity or rehabilitate, reconstruct or expand an existing transportation facility; and other factors deemed appropriate by the public entity.

For unsolicited proposals, private entities are encouraged to request one-on-one meetings with DOT’s P3 office and/or a public transportation entity to discuss potential proposals before submission. As part of such one-on-one meetings, the P3 office and/or public entity may provide informal feedback. A formal review of an unsolicited proposal will only be undertaken once a private firm makes a formal submission.

An unsolicited proposal must contain information that is sufficient for the P3 office and/or public entity to evaluate the merits of the proposed project. Such information includes the capability of the private entity to deliver the project, the financial viability of the project and the benefits to the state of New Jersey and the public entity of a P3 delivery method over a conventional method. The board would need to promulgate an implementation manual identifying  any additional categories of information that all unsolicited proposals must contain.

It would seems prudent that the board and the P3 office established limited times- say, May and October as the only two months the state will receive unsolicited proposals.

In addition, New Jersey should seek sponsorship proposals for the state’s welcome centers and rest areas, environmental and engineering services, including project management services.

The law provides unique opportunities for private companies in various industries, including construction and communications. P3s should stimulate private investment in public highways, bridges and other facilities, where governments confront funding restraints.

Summary of Benefits and Limitations of Public-Private Partnerships

Potential Benefits

  • Transfer project risks to private partner.
  • Greater price and schedule certainty.
  • More innovative design and construction techniques.
  • “Free up” public funds for other purposes.
  • Quicker access to financing for projects.
  • Higher lever of maintenance.
  • Keep project debt off government’s books.

Potential Limitations

  • Increased financing costs.
  • Greater possibility for unforeseen challenges.
  • Limits government’s flexibility.
  • New risks from complex procurement process.
  • Fewer bidders.

Major Risks Transferred in Public-Private Partnership Agreements

Financing Risks

  • Changes in financing costs.
  • Estimated and actual inflation.

Design and Construction Risks

  • Interface between design and construction.
  • Discovery of endangered species.
  • Discovery of archeological, paleontological, or cultural resources.
  • Discovery of hazardous materials.
  • Unknown utility lines.
  • Delays in getting permits approved.

Operation and Maintenance Risks

  • Facility requires more maintenance than planned.
  • Facility is more costly to operate than planned.
  • Standards or requirements imposed in the future.

Revenue Risks

  • Usage of the facility is lower than predicted.
  • Public less willing to pay user fees than projected.

Tough times often lead to a new way of viewing common problems: how to create jobs, for example, and how to keep the economic machine moving. The American Recovery and Reinvestment Act of 2009 is just one of several indicators suggesting that the U.S. government is seriously considering the need to look to novel programs to both update crumbling infrastructure and stimulate the economy. These alternatives may be all the more attractive when the public sector is faced with more and more debt and competing priorities for borrowing capacity.