What to Do About Contracting Delays and the End of the Fiscal Year

If you sell to the federal government, you’re entering the last month of its fiscal year.  Statistics show September has two times the number of contract awards on average more than other months.  Yet, it appears this year, contract delays will be high, and for many of you, September may not be a strong finish.  In an article in Washington Technology, Dawn Jordan provides some statistics originally produced by Input on the current state of contracting as we finish up the fiscal year:

  • In year-over-year comparisons, the number of awards for each of the first six months in 2011 was down versus the same month every year dating back to 2005.
  • Using the total number of awards made in 2010 as a guide; in the first six months in 2011, 30 percent of awards had been made.
  • Both the civilian and defense sectors have slowed but the greater impact has been on defense.
  • In each of the past three years, over 80 percent of the RFPs issued were awarded in 12 months. Based on the first half of 2011, it appears the percentage of RFPs awarded within 12 months will be closer to 65 percent.

There are a variety of reasons behind this.  Contracting staffs appear to be smaller.  The whole budget debate and continuing resolution process seems to have had a significant impact.  And the number of protests have increased over the last few years, causing award delays.

So what is a contractor to do during times like these?

Pedal to the Metal

First, don’t let off the gas with existing prospects.  You have to keep pushing forward, building relationships and highlighting customer value.  Know what is happening in procurement and where your deal stands.  In many cases, the procurement process will eventually unstick and you’ll be ready to move rapidly.

Build a Pipeline

Second, now is a great time to pursue new prospect relationships and build your pipeline.  While you’re visiting a current prospect (and hearing about yet another delay), ask who tin other agencies or departments might also benefit from having a problem solved.  Sometimes, it just takes asking.

Make New Friends

Third, while we’re thinking about relationships, now is a good time to build relationships with current/potential partners.  Government selling is all about teaming, and finding the right partner can make the difference between success and failure.  Too many times, contractors don’t have partners on their radar until they are scrambling to plug a hole in an RFP response.  Build relationships before you’re under the pressure of a proposal deadline.

The last month of the year can be a frustrating, but exhilarating time of the year.  This year, don’t let contract delays and budget wranglings get you down.  Build for the future.

No “I” in “Government Sales Team”: Creating High-Performance Selling Organizations

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For many years, we have worked with and studied companies that sell products and services to government agencies.  Some of these have been highly effective organizations.  Others never really understood how to win in the space.

Want to know one of the strongest indicators of government selling success?  Well, it’s not the sales team’s ability to make slick presentations.  It is not cutting-edge marketing campaigns or great search engine optimization strategies. It is not a huge price advantage or airtight patents that fend off competitors.

No, one of the single strongest predictors of government selling success is the organization’s aptitude for energizing a team of people around revenue generating opportunities.   Now the “team” we refer to here extends beyond the Sales department.  Of course, they bear the ultimate responsibility for winning the business.  However, in the world of government markets, salespeople simply cannot do it alone.  Find a company that consistently wins government business, and you’ll find a company that has succeeded in aligning a variety of resources and disciplines to support the deal capture process.

In consulting with companies seeking to generate more government business, we follow a process of examining several key resource areas.  Our ultimate goal is to provide insights on ways to better align various departments in order to provide the best chance at winning more business.

Here are some of the key functional areas we examine and just a few of the critical questions we attempt to answer during the discovery phase.

Marketing (for lead generation, branding and product development input)

  • Are lead generation processes in place, targeted, and effective?
  • Are results measured?
  • Are managers held accountable?
  • Is the relationship with Sales or other areas strong, or does conflict exist ? Why?
  • Is branding consistent with and supportive of strategic goals?
  • Do marketing tactics/materials align with the sales process (do the right materials exist for each step in the sales process)?
  • Are broad-market needs making their way into product development?

Sales (for customer relationship-building, pain identification and value portfolio definition)

  • Is a clearly defined sales process adopted and well understood?
  • Are incentive/compensation plans aligned with goals?
  • Do salespeople have the right skills/traits/motivations?
  • Do salespeople know how to effectively diagnose prospect pain/fear/motivations?
  • Do they know how to align company offerings with prospect needs?
  • Can they effectively manage and nurture the variety of required relationships?

Sales Engineers (for technical clarity and detailed customer need assessments)

  • Do sales engineers have the right skills/traits/motivations?
  • Can they effectively support customer relationship-building?
  • Can they translate complicated technical details into non-technical concepts?
  • Can they accurately assess problems and pose realistic solutions?

Proposal Writers (to document the translation of company solutions into customer benefits)

  • Can proposal writers dissect a complex RFP and grasp how to communicate value?
  • Do they write effectively with clarity and accuracy?
  • Are they detail-oriented and committed to error-free work?
  • Are they able to create effective visuals that help tell a complex story?
  • Can they manage tight deadlines and work well under pressure?

Partners (to access unattainable deals and vehicles)

  • Does the partner provide a more favorable conduit to a customer segment?
  • Are procurement vehicles and labor rates appropriate?
  • Are appropriate agreements in place to protect all parties?
  • Are financial terms appropriate and motivating?
  • Does the relationship create clear value for both partners and for the customer?
  • Does adequate support exist between the parties?

Management (to set priorities/policy that can hurt or help you)

  • Does management understand the unique complexities of selling to government?
  • Do they send conflicting or changing messages on priorities and goals?
  • Does the company’s organizational structure and resource allocation support success?
  • Are compensation programs appropriate and adequate?

Business Intelligence (to manage and gauge market feedback)

  • Are processes in place to capture market feedback?
  • Are technology tools deployed to house and analyze this feedback?
  • Is analysis routinely injected into decision-making and product design?

A high-performance car will be slower, less efficient and less desirable to drive if its wheels are not well aligned and properly balanced.  The same holds true with high-performance organizations.  If any of the functional components highlighted above are out of step with the others, the result will be a less than optimal revenue-generating machine.

If your government market-focused organization needs a diagnostic, a tuneup or even a complete realignment, Government Selling Solutions (GSS) can help.  For more information, visit www.govsellingsolutions.com.

How Will Federal Budget Cuts Impact Government Contractors?

The new Budget Control Act of 2011 launches with almost a trillion dollars in spending cuts.  Where are the cuts and what impact will these have on contractors?

It turns out this is not an easy question to answer.  First, let’s examine what we know (see article by CNN’s Jeanne Sahadi for additional detail).  The legislation caps domestic and defense spending, which results in $917 billion in reductions over a ten-year timeframe.  Of these, $350 billion is taken from the defense budget.

The framework then calls for more deficit reduction (between $1.2 trillion and $1.5 trillion worth) to be determined by the end of this year and enacted over 10 years.  This second round of deficit reductions would be set forth by a special bipartisan joint committee of Congress. The committee has until Thanksgiving to come up with its proposals.

If Congress approves between $1.2 trillion and $1.5 trillion in cuts, the debt ceiling will be increased dollar for dollar.

If the committee deadlocks or comes up with less than $1.2 trillion in cuts (or if Congress votes down the committee’s proposals) the debt ceiling will be raised by $1.2 trillion.

What does not appear to be open for additional cuts are the following:

  • The wars in Iraq or Afghanistan or “similar activities”
  • “Entitlement” programs, (Medicare, Medicaid, and Social Security)
  • Debt payments

So back to the question of what impact the deficit reduction legislation will have.  Here are a few thoughts:

Contractors will feel the pinch of budget reductions in areas of discretionary spending and Defense.  There will simply not be as much money to go around and certain programs will see significant reductions or be eliminated altogether.  As defense resources are withdrawn from the Middle East, expenditures will be reduced.

Long-term contractor planning will become even more difficult. Tying of budget reductions to increases in the debt ceiling will add even more uncertainty and complexity to the process, making long-term contractor planning a challenge.  Every year will be even more of a battle as the stakes are now even higher.

States will feel the cuts particularly in areas of public safety and homeland security.  These areas already took a hit in the 2011 budget and will likely receive continued scrutiny/attention.

Smaller service-oriented businesses may find new opportunities.  While smaller businesses on the manufacturing side may find it difficult to achieve cost advantages due to lower economies of scale, smaller businesses on the services side may actually leverage a cost advantage due to lower overhead and lower labor costs.

IT spending is expected to actually increase across the federal government.  This is one bright spot and will be particularly true where clear cost savings or efficiencies can be illustrated through the adoption of technology.

While there is little doubt contractors will feel the effects of this latest budget wrangling, there will still be massive opportunity to provide valuable goods and services to the nation’s largest single customer.  Sure it’s going to be more difficult, but when was the last time a government buyer DIDN’T talk about funds being a problem?  When was the buying process NOT complex?  Things will settle in, and contractors who can illustrate real value will thrive.  Staying focused on building relationships and relieving pain WILL get results even in times of change.

Lorin Bristow

Government Selling Solutions (GSS) helps government sales teams reach their full potential through sales training, sales and marketing consulting and capture team participation.

www.govsellingsolutions.com