Industry execs weigh potential impacts of presidential transition

The transition to a second Donald Trump administration brings with it many of the same risks and problems as any other transition.

There also unique issues that come with the style of Donald Trump and how he governs.

In some cases, that will mean opportunities for industry. In other cases, it might make doing business more difficult.

That was the consensus of a not-for-attribution conversation I had with a group of industry executives from large, small and midsized government contractors.

The discussion lumped issues into two buckets, near-term and long-term.

In the near term, the group indicated worries that this transition will be slower and perhaps more chaotic than previous transitions.

One of their major worries is that Trump officials have not participated in the transition planning activities that take place ahead of presidential elections.

The Trump team is now just getting started on transition activities. One executive pointed out that no one has been cleared and no one is doing the work to get briefings from across the departments.

There are also very few people from the first Trump administration that are stepping in.

“It’s a fresh batch, so we have no legacy,” a second person said. “It’s going to suck for a while.”

All the Biden appointees will be gone on the first day of the Trump term.

“Party doesn’t matter, but every senior leader will be gone,” an executive said. “That’s a massive brain drain.”

Another executive warned against talking to political appointees when they come on board.

“Do you know what the average tenure is? A year and a half so they don’t know what they are doing,” that person said. “I don’t care what the administration is, stay away from the political appointees.”

One executive voiced concern about Trump’s plan to rescind the Biden administration executive order on artificial intelligence.

“It’s not that there aren’t good ideas, they just aren’t my ideas,” that same executive said when reflecting how the new administration’s views the AI executive order.

“They are going to start fresh so we are thinking about things like, what will our posture on AI ethics look like? What will governance look like? What will regulation look like?” the executive continued. “We don’t know because we don’t know what the new folks are going to end up doing.”

Over the long-term, the group expressed concerns about the expected chaotic nature of the Trump administration. This will be exacerbated by Trump’s plan to strip civil service projects from 50,000 career bureaucrats.

One executive said that if the Trump administration forces those people out, “We are talking about a big segment of decision makers."

The Supreme Court also expanded presidential immunity with its decision involving Trump’s prosecution for conspiring to overturn the 2020 election.

There were allegations during the first Trump term that the president inserted himself into procurements for the border security wall and the Defense Department’s JEDI cloud computing contract.

When considering the Supreme Court decision, some executives said that Trump could interfere in individual procurements and there would be little to no recourse.

“From an industry perspective that’s a worry because the reason we succeed and why we innovate is because we compete,” one executive said.

But there could be a benefit to an administration that wants to push the envelope on the rules.

“What’s going to be interesting and compelling is if he does what he’s threatened to do and bring in Elon Musk to do a massive transformation,” another executive said.

One of two things will happen – career bureaucrats will hunker and wait it out, or the Trump administration will really blow things up.

The Defense Department is a target, an executive said.

There have been complaints for years about how acquisition processes have calcified, making it hard to bring about changes on a large scale.

“If we are going to leapfrog and get to the next generation of technology, maybe a massive reset is what’s needed,” an executive said.