GovCon Procurement Changes

I have been advising companies on doing business with the government since 1985, and I have never seen this much turmoil in the market, starting with but certainly not limited to the budget issues, fixed-price contracts, low price/technically acceptable (LPTA) and more.

The good news is the government still needs all the products and services they’ve always purchased. The bad news is how they are buying is changing, especially on GSA Schedules. If you are not totally aware of everything that is going on, you may be severely handicapped in how you sell to Uncle Sam. Worst case scenario- you could lose your ability to sell to the feds.

The next several months will be crucial for your business!

If you sell via GSA, do you know GSA recently announced the intention of cleaning up the outdated and oversaturated GSA Multiple Award Schedules program?  GSA’s goal is to move to a “Demand Based Model” that would maximize the use of GSA’s limited internal resources.

According to GSA memos and information from other sources, these are the pending changes which may be coming to the GSA Schedules:

1.         Ending contracts that are not meeting minimum sales criteria (contracts with vendors that are not performing on specific Schedules)

2.         Deleting some outdated Special Item Numbers (SINs) and/or entire Schedules

3.         Closing overpopulated GSA Schedules to new offers for annual periods of time.

While each of these may be valid, they impact the current landscape in a big way.

Add to this the current and upcoming Federal Strategic Sourcing BPAs (Schedule 75 and others), and there truly major shift in progress.

Understanding what the issues are is the beginning of developing ways to ensure you maintain more of your government accounts than your competition.

I am looking for up to 8 companies that sell products to the government to advise and work with between now and the end of the year to ensure each company understands the issues and are fully prepared to succeed despite the changes.

If you’d like to see the complete details for this five month program, let me know & I will send them ASAP.

Absolutely the best-

Mark Amtower

mark@federaldirect.net

What to do when the budget shrinks?

I just received a question from a client who sells products to the government. Clearly this person, and their corporate management, were worried about the current economic and political climate - as are we all.

The question is: With budget cuts looming on a federal level, what might be a few things to say to management that would sound “good” to justify why the Government sector will continue to grow?


I think my answer was realistic, but optimistic, at least for the savvy.

I don't think the sector will grow, but I think the "shrink" in the government market will be less than anticipated and also less than other market sectors. Further, I think that the more savvy players will grow their market share by eroding the market share of marginal and less sophisticated companies. Many companies do this as a matter of course, but those ranks will swell in the current climate.

If you have any small business status,  now would be the time to truly try to maximize the value of that status with your current government accounts, and perhaps with accounts that have lapsed within the last 18-24 months. I would also go to a few agencies that have needs for your products or services and make certain they know who you/your company is, and what you bring to the table. If you have no connections at those agencies, go through the OSDBU office. The OSDBUs are not just there for e the "newbies" - they will actually enjoy visits from seasoned professionals.

I think some companies that have been marginal in the market will leave or fold, and create some market share that will have to go somewhere.

Your thoughts on this are welcome.

Word on the street- INPUT has been sold

There has been lots of speculation the last few months about Input actively seeking a buyer, but the current word on the street is that they have been sold.

Further, the unverified word is the buyer in Bloomberg/BGov. I have heard this from mulltiple sources near both parties, but nothing fom inside either.

If that is accurate, there will be a significant shift in the contract information landscape over the next several months.

Stay tuned!

Reading more than is there

Sometimes you can read between the lines and get something others might miss.

I got a call the other day from someone I had advised a few years back. They had just read an article in the Wall Street Journal (Feb 2) entitled “Funding for Education Would Get a 9% Increase.” The article came with a chart of “Winners and losers” in the federal budget (the federal agency winners and losers).

The call was in reference to the increase in the Education budget and my friend wanted to know how much more they should focus on the Department of Education and the education market in general.

The article focused on the Obama plan to revise the Bush “No Child Left Behind” program, which has operated with very mixed reviews since its inception. This means the money would be going out in the form of grants to local jurisdictions predicated on meeting some new criteria (not germane to our discussion).

So I asked my friend these questions:

· How much of your business is the education segment?
· How many of the 13,506 school districts do you currently sell to?
· How are you planning on reaching the decision makers in each of those districts who are interested in what you sell?
· What makes you think that increase will be spent on what you sell?
· Would this mean you will spend less money marketing to the agencies that spend more with you?
· Now, do you still want to increase your marketing to the education segment?

I don’t know what my friend will end up doing, but here are the real issues:

· A 9% increase for the Department of Education translates into $4.5 billion, pocket change in terms of the federal budget.
· Even if the money is divided equally amongst the districts (which will not happen), the increase will not amount to a large pot to go after.
· If you have a limited marketing budget (and most companies do), you are better off making certain current customers are better served first before going after new customers.

Sometimes there is something to read between the lines, and sometimes there isn't.

2010 forecast for THE FEDERAL, STATE, and MUNICIPAL MARKET- free webinar

This will provide great info for companies either in the government market, or those seeking to enter the government market in 2010. Real information from two experts Michael Balsam of Onvia and me) - and it is free.

https://onviaevents.ilinc.com/perl/ilinc/lms/register.pl?activity_id=vxbtzmt&user_id=

Here are the dollars:

$5.5 trillion a year.
$105 billion a week.
$15 billion a day.
$625 million an hour.
$10 million a minute.
$175,000 a second.

Spending by federal, state, and municipal governments now represents almost half of total U.S. GDP, and that percentage is expected to increase in the coming years.

Companies that ignore the government sector are significantly disadvantaged.

The Next Economy: 2010 Government Market Outlook Report and Webinar will give you the insight your business needs to capitalize on the enormous opportunity in the government marketplace.

Register to get industry insight on:

-Government investments in Infrastructure, Energy, and Information Technology - from regional health information networks and intelligent transportation systems to smart power grids
-Continued impact of Economic Recovery funding
-Subcontractor and supplier opportunities due to lower barriers of entry
-and much more

https://onviaevents.ilinc.com/perl/ilinc/lms/register.pl?activity_id=vxbtzmt&user_id=