Five Areas Contractors Need
to Watch in 2013
We live in interesting times.
There have been bad periods for government contractors several times in the 30 years I have been advising companies in this market, but beyond any doubt, these are the strangest and by far the worst of any I have seen.
To successfully stay ahead of the curve, to be as competitive as possible, certain activities must be monitored on a very regular basis. These activities require an investment, sometimes of time, sometimes of money or other resources, and sometimes a combination of several.
But make no mistake, these activities must be closely monitored if you are to remain or become successful.
1- Careful attention must be paid to how your prospects and customers are being driven in their purchasing. Strategic sourcing is expanding; low-price, technically acceptable is the rallying cry of bean-counters inside OMB and elsewhere; and fixed-price contracting looms. Each of these have serious downsides for the government, but in their cyclic mind frame, they won’t figure this out for the next four or five years. Hundreds, perhaps thousands of companies will be removed from various GSA Schedules by then, and many of those will go out of business as a result. Study these issues carefully and be prepared to deal with each as it encroaches on your niche.
2- ‘Fraud, waste and abuse’ is yet another rallying cry from those who have little or no clue as to what “common commercial practice” actually is. That does not remove it as a threat to the contracting community. Make certain you are getting the proper legal advice in all areas of contracting: pricing, partnering, prime/sub relations, audit and other activities which raise red flags inside IG offices. I am not saying that contract fraud does not exist, but I am certainly implying that over-zealous government lawyers often don't have a clue as to how the business world operates.
3- All things “small business”. Small businesses continue to seek sub-contracting and other arrangements with primes, and primes seek to find competent sub-contractors for specific bids. With the number of bills in Congress impacting small business, in particular set-asides, both small and larger business must take into account all the rules impacting how they can work together. It does not appear that Congress, despite all their lip service, will make this easier for anyone. But keep in mind that missteps here can lead to #2 above.
4- To get away from the pitfalls for a moment, let’s look at social networking. With the temporary demise of some major events sponsored by the government, new ways must be found to identify and influence prospective buyers and other influencers. LinkedIn is particularly well-suited to this task, and while many contractors are here, along with the governmental counterparts, few companies use LinkedIn to its maximum advantage. Invest in some training to see if you are among those missing this particular boat.
5- Thought leadership has been a hot topic for a few years now, but like social networking, many really do not get what it means and how to develop a thought leadership platform. While many claim to be thought leaders, but few can substantiate the claim. Thought leadership is differentiation on steroids. It is the development of expertise in a niche subject area, and the sharing of that knowledge base in multiple venues throughout a defined community. And still, it is more. It is ultimately the acknowledgment of that community that you are among the thought leaders. You can learn the elements, but you never claim the status without broad recognition from the community.
There are other areas that may need to be monitored for you particular niche, but these five cut across the entire market.
Pay careful attention to the first three and start acting on the final two.
Best of fortunes in 2013.