TREND WATCH: “Net Zero” Energy Buildings

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In October, 2009, President Obama signed E.O. 13514 setting sustainability goals for federal agencies.  The order reminded agencies of the existing requirement that buildings be designed to achieve “net zero” energy use by 2030, which means the buildings should produce as much energy as they consume.  An article in NextGov highlights the General Services Administration‘s (GSA) effort to begin converting existing facilities to attain net zero usage.  The GSA aims to be a sort of “proving ground” for new green technologies and processes.

According to the article, the new norm in the future will be net-zero, and GSA is starting down that path.  Steve Leeds, the agency’s senior sustainability officer said GSA has announced plans to convert two existing buildings to net-zero status. One is the Wayne Aspinall Federal Building and Courthouse in Grand Junction, Colo., which will become the nation’s first net-zero historic building. The second is the San Ysidro Land Port of Entry in California, the nation’s busiest border crossing, which will be net-zero by 2014. When those two federal buildings are complete, they will bring to eight the number of net-zero buildings nationwide both private and public.

IMPLICATIONS

While “green” has been a hot topic for a number of years, we are clearly beginning to see real movement in deploying the technologies that make efficiencies possible. “Net zero” is fast becoming the standard by which success is measured as opposed to simple energy savings.  Achieving this will likely take a multi-faceted approach as no single method or technology will make this possible.  Look for continued growth in this sector and consolidation among players as agencies look for “one stop shops” to help deploy the variety of energy efficiency approaches.  Also, vendors with retrofitting capabilities will have the advantage over  those geared for new construction only.

GSA Releases Figures on Local & State Use of Schedule 70 for Q2

According to INPUT, the General Services Administration (GSA) released figures on state and local government’s use of GSA Schedule 70 for Q2 of FY 2010.  Orders are down slightly from Q1.  Despite this fact, Schedule 70 orders remain up 10% over this time last year.

Source:  INPUT

A part of the GSA’s “cooperative purchasing program” Schedule 70 permits state and local governments to purchase a variety of IT products (software, services, etc.) along with other public safety solution through the federal GSA schedule.

Though the quarter to quarter slowing reflects spending scrutiny and budget cuts in most every state, the overall outlook for Schedule 70 items continues to look positive for government contractors selling to state and local agencies.

-LBB

Top 10 Selling to Government Posts for 2009

No year end would be complete without a plethora of “Top 10” lists.  So,  we thought it would be interesting to present to you the Top 10 most read posts by our followers. 

Here they are in reverse order:

10.  Cloud Computing–Top IT Trend in Government
The movement of government IT professionals to adopt cloud computing solutions and methods.

9.  Closing the Government Contract
Do closing techniques really work in government selling?

8.  The Case of the Mysterious 18.2% from State Stabilization for Public Safety
We were among the first to identify this unusual source of funds (worth billions of dollars) for public safety.

7.  Report Unveils State Spending Plans
As the year progressed, states began waking up to the potential within the State Fiscal Stabilization Fund for public safety.

6.  Another Boost for Police Technology?
Our post on the House approving $1.25 billion over five years for the Community Oriented Policing Services (COPS) program.

5.  Grant Support Program Announced
Ingram Micro rolls out a program for channel partners helping them identify grant opportunities–a growing trend.

4.  Broadband Grant Award Date Gets Pushed
For many following the broadband saga, this post announced that awards would be pushed until February 2010. 

3.  ARRA Grant Recipient Registration Site Open
Post announcing the opening of the FederalReporting.gov site for recipients of ARRA awards.

2.  Rule You Can Break:  The GSA Schedule
Many believe being on the GSA is the only way to do business with the Federal government.  We provide an alternative view.

1.  Three Types of Buyers in Government Agencies
Contractors must appeal to three different types of buyers within government agencies to be successful.

Amidst one of the worst economies in decades, the year has been difficult for many businesses.  Yet, for those selling to government, bright spots have emerged and signs of hope continue.  We are grateful for those of you who follow our blog regularly, and we invite you to continue (and share it with a friend).  We’ll do our best to offer valuable insight on how to succeed in the dynamic world of government markets.

Here’s to a happy and prosperous 2010!

All the best,

Rick & Lorin

States Facing Huge Shortfalls in Budgets

Thirty-six states are facing budget shortfalls totaling $28 billion according to a new report from the National Conference of State Legislatures.  This only five months into the new fiscal year.  The report predicts there will be another $56 billion in shortfalls across 35 states in ’10-’11 and $69 billion in shortfalls across 23 states the year after that.

Many economists think the U.S. economy is beginning to rebound.  But historical analysis shows state budgets continue to struggle long after a national recession ends according to a post on www.stateline.org.

“Even if the recession is over, state budgets are still in appalling condition and are going to be that way for quite a while,” said Corina Eckl, fiscal director at the National Conference of State Legislatures. “For many states, revenue recovery is not even in the forecast.”

“The states are facing nearly unprecedented declines in revenue collections,” said William Pound, executive director of the NCSL. “Coupled with probable declines in federal stimulus support over the next two year, the state fiscal picture is bleak.  We’re heading into an era of retro budgeting, where state spending is receding to levels five to 10 years ago.”

NCSL asked legislative fiscal directors to calculate when their state entered into the recession and when they expect to come out of it.  Twelve states expect recovery in the first half of CY 2010, with nine others expecting it in the second half of the year. Two states—Iowa and Louisiana—think recovery is more than a year away, projecting a rebound in the early months of CY 2011.

According to the http://www.stateline.org post, budget shortfalls are the result of an “erosion of revenues from falling income and sales tax collections and rising expenses associated with growing Medicaid enrollments.”

-LBB

For vendor implications, see our post on Sales & Marketing Management magazine’s “Sound Off” blog.

To receive Galain Solutions’ FREE REPORT “Five Sales Rules to Break When Selling to the Government,” email info@galainsolutions.com or visit http://galainsolutions.com/economicstimulus.html and complete the form.

Improper Payments to Federal Contractors Rise Sharply. What Will it Mean for Vendors?

Improper payments by federal agencies has increased 36% in the past year according to an article in Government Executive.  Improper payments increased to $98 billion in FY 2009  up from $72 billion in FY 2008.   Office of Management and Budget (OMB) Director, Peter Orszag said the increase was caused by better measurement of improper payments, and increased federal expenditures due to the stimulus.

A large portion of the increase came from programs such as Medicare and Medicaid.  However other departments also contributed to this growth including the Department of Homeland Security.

It is expected that President Obama will issue an executive order sometime next week to include three components for addressing these improper payments:  “increased transparency and public participation, accountability at the agency level and incentives for compliance.”  Agencies will be expected to reduce improper payments on a year-over-year basis (currently they are only required to track these numbers).

IMPLICATIONS FOR CONTRACTORS

Currently, vendors receiving accidental overpayments (and discovered by the government) are only required to pay back the government without interest or penalties.  The new executive order is expected to subject contractors to suspensions, fines and other penalties if contractors do not disclose overpayments.  

-LBB

 

To receive our FREE REPORT “Five Sales Rules to Break When Selling to the Government,” email info@galainsolutions.com or visit http://galainsolutions.com/economicstimulus.html and complete the form. 

OMB Issues Procurement Guidance for Federal Agencies

This week the Office of Management & Budget (OMB) issued more guidance related to reform of government procurement processes. The OMB memo provides further meat to goals for reducing acquisition costs set out by President Obama earlier in the year.

For 2010, federal agencies must reduce by at least 10 percent the share of dollars obligated through new contracts that are awarded non-competitively (or receive only one bid), or are based on cost-reimbursement or time and materials. The new memo provides guidelines for procurement managers to use for evaluating the competitiveness of their agency’s purchasing practices.

The memo points to the need for purchasing officers to answer three key questions:

(1) How is the agency maximizing the effective use of competition and choosing the best contract type for the acquisition?
(2) How is the agency mitigating risk when non-competitive, cost-reimbursement, or T&M contracts are used?
(3) How is the agency creating opportunities to transition to more competitive and lower risk contracts?

Recommendations provided surrounding these questions are varied, but highlights include concepts such as:

Better planning.  To promote competition effectively, agencies must provide sufficient information in the statement of work and sufficient time for response.  They must understand how the industry works (distribution channels, etc) and what drives costs.

Focus on results.  Agencies should focus on outcomes, rather than detailing how work is to be performed . This will allow vendors to offer more innovative solutions and open possibilities for off-the-shelf solutions.

Use the appropriate contract types.  Agencies should scrutinize projects and only use cost-reimbursement or T&M contracts under specific conditions.

 Limit contract terms and regularly assess contractor performance.  Shorter terms and scrutinized vendors will drive better performance and lower costs.

Engage the market.  Actively pursue the market’s ideas on ways to reduce costs and structure contracts.

These are good suggestions overall, with positive impact on competitiveness–at least in theory.  Contractors should continue to focus on value-creation and service quality, realizing long-term, non-competitive contracts could dry up.  Doing so will ensure companies don’t get lazy in their offerings and taxpayers receive a good return on their investments.

-LBB