Now What? Success in 2013 Demands Attitude Change

By Gloria Larkin

This year’s crystal ball still holds a few surprises, however, for the most part the theme in federal contracting is a solid “do more with less”. The challenges not only involve the obvious budget trimming “do more with less money” but the even more critical theme, “do more with fewer people”.
Deltek, a federal data research and services firm, predicts that over 23% of federal contracting and acquisition-related government employees will retire in the next 18-24 months, and a full 50% in the next five years. This critically affects businesses doing work for the federal government (including military bases and intelligence agencies) because these are the decision-makers for purchasing and procurement.

Conflicting Trend Snapshot
Visualize this: in the year 2000, the federal government had spent $230 billion with contractors. At that point in time, there were over 100,000 contracting and acquisition employees handing that $230 billion in contracts. Eleven years later, in 2011, spending had ballooned to $550 billion. The shocker is that the contracting and acquisition staff had not expanded during that incredible spending increase, but rather significantly shrank during those eleven years, to just about 80,000 people. 
Now, the baby boomers in federal contracting and acquisition will continue to retire in accelerating numbers, further decimating the existing knowledge and relationship base.

First the Bad News
Those companies who had a lock on contracts should find this evolution troubling, because the good old boy network is disappearing. Additional bad news is that those people who are leaving had 20 to 30 years of experience with the rules, regulations and legal issues.  The few new hires have a very steep learning curve to assimilate the 2,000 pages of the Federal Acquisition Regulations along with the thousands of ever-changing rules and regulations affecting purchasing and procurement.

Good News
For those companies with truly efficient and cost-effective processes or products, or proven experience in the commercial markets this is a very good time to aggressively enter the federal marketplace. With the aforementioned retirements in progress, new connections and relationships can be initiated and strengthened. Yes, competition will be extraordinarily tough; therefore investing the time and effort in learning the unique factors and processes in the federal marketplace can pay off handsomely. Businesses entering the federal market will find a unique window of opportunity during this time only if they research and embrace the federal purchasing and procurement process while bringing in fresh ideas.

 Experienced Contractors
The firms large and small who have seen success in the federal space in the past ten years will only hold onto market share if they shake off the stale business development and capture practices and instead embrace new communication, differentiation and marketing strategies that appeal to the remaining federal decision-makers.