AN UNCERTAIN FUTURE FOR GOVERNMENT CONTRACTING-How Tariffs and the Trade War with China are Affecting Contractors and the U.S. Government Supply Chain

• Published in: Contract management Vol. 59; no. 11; pp. 20 - 25
• Main Author: Monticciolo, Doug
• Format: Magazine Article
• Language: English
• Published: McLean National Contract Management Association 01.11.2019
• Subjects: Contractors; Government contracts; Government purchasing; International relations-US; International trade; Supply chains; Tariffs; Trade disputes; United States > US; China
• ISSN: 0190-3063

By the very nature of their business, US government contractors have come to rely upon a consistent supply of raw materials and finished goods imported from China. Any disruption to that supply chain has an immediate and direct impact on contractors' bottom line and their ability to compete and fulfill contracts that serve the public good. While these issues are constantly evolving, the there are some of the most common implications that current and potential contractors will face as the trade war continues. Finally, government contractors should consider taking out a line of credit to account for price increases and costs associated with tariffs-at least until the trade war is negotiated to an end. Government contracts allow for favorable risk profiles to lenders, and the increased flexibility will allow contractors to meet deadlines, absorb costs, and ride out the storm in one piece.