In a recent government contracting industry study, Deltek, a national federal data services company, identified specific trends affecting businesses serving the federal market. A main purpose of the study was to establish industry benchmarks for use by contractors. The study respondents included more than 300 companies of all sizes, located throughout the United States.
Industries responding included professional services, information technology, research, architecture, engineering and construction, among others.
Now that the federal budget has stabilized, according to the report, the majority of contractors consider today’s top business development challenge to be limited business development resources. Deltek stated that, “On the heels of several years of limited growth, many firms cut spending in business development. Now companies are feeling the pinch and are struggling to execute their [business development] strategies with a shortage of resources. It will be interesting to see whether investment priorities shift later this year, as a potential sequester comes back on the table and the 2016 election comes into sharper focus.”
The challenge of limited business development resources is followed closely by increased competition and the difficulties of developing strong relationships with potential customers. Increased competition is a recurring theme in every industry, especially with tighter budget issues. With government employee travel now severely restricted, many agencies have eliminated or sharply reduced participation in procurement conferences, with the end result negatively affecting contractors and their access to decision-makers.
An example of a recent federal agency outreach event was the Department of Energy (DOE) national conference in June, held in Phoenix. The more than 700 attendees included government employees and contractors who met during two days to discuss contracting issues, budgets and priorities. Workshops were held to educate contractors, and matchmaking sessions providing introductions between DOE procurement personnel and contractors were well-attended. However, many government agencies, such as the General Services Administration, have eliminated large national conferences and instead may hold a limited number of small regional contractor outreach events, which make it more difficult to reach the decisionmakers in a central location.
The Deltek study also identified how companies are responding to the noted business development challenges. The top three findings were: better and earlier understanding of the opportunities, better identification of opportunities and deeper competitive intelligence. Many of the respondents also ranked “exploration of new markets” in the top five items in their business development plans.
Government contractors use various tools to help identify upcoming opportunities, including agency forecasts, OMB budget documents, Sources Sought Notices posted on FedBizOpps.gov, agency specific web sites and other publicly available sources. There are also a number of subscription services including Onvia, Bloomberg Government and GovWin by Deltek where data is aggregated and research performed by the provider to supplement the standard data sets.
For contractors, the key factor in every government business opportunity is having a trusted relationship with the decisionmakers before the request for proposal (RFP) is released. This is becoming more and more a challenge for a number of reasons, including that, due to a high retirement rate, there are fewer decisionmakers left who now have larger workloads, the aforementioned reduction in travel for government employees and larger, more complicated RFPs.
Exploring new markets in the federal space generally may indicate looking at a broader geographic footprint, or working outside of the typical current customer base by adding civilian, intelligence or defense clients.
Gloria Larkin is president of TargetGov, in Linthicum. She can be contacted at 866-579-1346 or via www.targetgov.com.