In the 2008 elections, federal contractors are showing their political savvy by donating to campaigns and strengthening their ties with the candidates.

Politics is becoming especially important for companies this year because they face a heightened legislative focus on proposals tightening contracting rules that coincide with the 2008 election campaigns for Congress and the presidency, contracting executives and industry advocates say.

“Federal contracting issues have heated up in Congress in the last few weeks,” said Stan Soloway, president of the Professional Services Council (PSC), a trade association for service contractors. Soloway also is a columnist for Washington Technology. “These issues are very hot right now.”

Sen. Hillary Clinton (D-N.Y.) introduced legislation last month to create new disclosure and reporting requirements for federal contractors.

The House also passed three pieces of legislation designed to increase oversight of federal contractors, including one that would create a database for agencies to consult when reviewing past performance.

BUILDING RELATIONSHIPS
Although it is still early in the year, federal contractors are actively raising money for candidates and bolstering their political involvement through political action committees (PACs).

A case in point: At SRA International Corp. (No. 32), Chuck Brooks, former legislative director at the Homeland Security Department’s Science and Technology Directorate, was hired last year to be vice president of government affairs and run SRA’s PAC. The PAC has raised $61,000 so far in the 2008 election cycle.

Brooks said putting resources into strengthening the PAC before the 2008 national election is a logical step for a company that hopes to grow to $5 billion by 2012.

“As we get larger, and our larger competitors have PACs, it is important to level the playing field,” Brooks said. “If you don’t have a PAC, you are at a disadvantage.”

In addition, the growth of SRA into new office locations worldwide has increased the number of lawmakers the company needs to know and build relationships with, he added.

Federal contractors that made Washington Technology’s Top 100 list this year are raising millions of dollars in PAC money and contributing it to candidates. The PACs receive donations from employees and give the proceeds in the form of donations to selected candidates. PACs can contribute as much as $5,000 per candidate per election cycle.

The amounts raised and donated are expanding in this cycle because of the strong interest in the presidential race, which is occurring as the country is experiencing economic stresses and is still deeply involved in the war in Iraq, said Sheila Krumholz, executive director of the Center for Responsive Politics, a nonpartisan group that tracks campaign financing.

“The size of donations is catapulting higher in the 2008 cycle because of the intensity of the presidential race,” Krumholz said.

FEEDING CAMPAIGN COFFERS
At the same time, federal contractors donating substantial amounts to candidates for Congress and the presidency is a long-standing pattern over decades that reflects the realities of political power and access, she said.

“Political money is the grease that Washington, D.C., runs on,” Krumholz said. “If you want to have my ear, you need to attend my fundraiser.”

This election, PACs from Top 100 companies that have donated a total of more than $400,000 to date to national candidates include those associated with AT&T Inc. (No. 38), Boeing Co. (No. 2), General Dynamics Corp. (No. 6), Lockheed Martin Corp. (No. 1), Northrop Grumman Corp. (No. 3) and Raytheon Co. (No. 4), according to data from the Federal Election Commission published by the nonprofit Center for Responsive Politics.

AT&T’s and Northrop Grumman’s PACs favor Republican candidates, while Raytheon’s, Lockheed Martin’s, General Dynamics’ and Boeing’s are leaning Democratic. The Democrats hold majorities in the House and Senate, and campaign money traditionally tends to flow to the majority party.

However, each PAC has its own strategic goals to pursue.

“Boeing PAC contributions are decided on a bipartisan basis, with the overriding purpose of supporting candidates and committees who share Boeing’s position on issues of importance to its business and its shareholders,” said Douglas Kennett, a Boeing spokesman.

In addition to PAC donations, employees of the Top 100 companies also are giving to presidential candidates on their own — sometimes in large amounts. IBM Corp. employees, for example, have given more than $150,000 to Sen. Barack Obama’s (D-Ill.) presidential campaign this year, $83,000 to Sen. Hillary Clinton’s (DN. Y.) campaign and $17,000 to Sen. John McCain (R-Ariz.). In contrast, AT&T employees have given $116,000 to McCain; $70,000 to Obama and $62,000 to Clinton.

GETTING INVOLVED
Such high levels of giving typically reflect a corporate culture in which being politically involved and building political networks and connections are regarded as virtues, Krumholz said.

“Some companies have a strong culture of political participation,” she added. Such a culture tends to begin at the top — at or near the chief executive suite — and is manifested by key players at a firm having strong political ties and relationships, she said.

At the same time, individual gifts by contractor employees to candidates — separate from the PACs — often are not strategic, some observers say.

Employees’ contributions to presidential campaigns are personal and do not necessarily reflect corporate views or priorities, said Larry Allen, president of the Coalition for Government Procurement, whose members are government contractors.

A contractor who wants to be more strategic in cultivating political networks should undertake a number of activities, including making campaign donations, conducting political education and outreach, and working with advocacy groups, Allen said. The coalition is preparing a series of white papers on major contracting issues that it will begin distributing soon.

This year’s campaigns are unusual in some ways. “I think we are seeing some new trends in giving in this presidential race, with people involved who have never been involved before,” Soloway said. “We are encouraging people in federal contracting to engage with the campaigns.”

As part of its educational efforts, in April, PSC established a new Web site, Smartcontracting.org, to provide updated information to the public and the media on various legislative initiatives that deal with government contracting.

“The key is to be involved, and to develop relationships,” said Brooks, who is planning employee briefings and educational programs. “It is a very dynamic year.”

Alice Lipowicz (alipowicz@1105govinfo.com) is a staff writer at Washington Technology.