Fiscal Cliff Averted? What’s the Real Fallout for Government Contractors?

President Obama just signed into law a bill averting the much discussed fiscal cliff.  So we can all breathe a sigh of relief and get back to work as government contractors, right?  Well, yes and no.  First, the “no” side of the equation.  Though bypassing a looming crisis, Congress postponed dealing with some of the key issues that spawned all this fiscal cliff stuff in the first place.  Our leaders deferred the $1.2 trillion in spending cuts (known as “sequestration”) for two months.  Further, they didn’t raise the debt ceiling even though the Treasury technically hit the $16.4 trillion limit Monday.  These things we’ll need to be addressed just about the time the continuing budget resolution runs out and a new budget battle will be underway.  Looks like more fireworks are in our future.

Now the “yes, we can get back to work” side of the equation.  While an environment of uncertainty such as has been created by the fiscal cliff battle can certainly have a negative impact on programs, I can assure you the federal government isn’t going away anytime soon.   It will still buy billions of dollars worth of stuff every day–hopefully some of it from you.  The main point: uncertainty is nothing new to experienced contractors.  There is always a cloud of precariousness hanging over government contractors:  funding battles, continuing resolutions, political turnover, contract expirations, bid protests, etc.  All of these serve to make government markets a bit rocky.  It’s something you deal with and navigate, meanwhile being thankful for the good characteristics like long-term contracts, and a customer that pays religiously.

So, amidst all the turmoil and uncertainty, just do what you do best.  Build relationships, solve problems, create value.  Do it well and you’ll build bridges across this and any future “cliffs” that may lie ahead.

Key Trends in Government Contracting Unaffected by the Election

A technology client recently asked us to summarize our opinions on key trends in federal government contracting.  We were happy to do so…and share the benefits of this with you.  Here are several key trends we’re seeing in government contracting:

  • More emphasis on shared technology and infrastructure (i.e. cloud computing)
  • More  justification that the chosen procurement vehicle is the best approach of all available contracts
  • More firm fixed-price (FFP) contracts
  • Greater emphasis mobility and working from home (teleworking)
  • Greater focus on IT security given more mobility and teleworking

Technology is driving many of these things as access, sharing, mobility, security, and other related trends converge.  We also don’t believe the election outcome will change the trajectory of any of these trends in a significant way.

What do you think?  What trends are you seeing that support or contradict this list?

 

 

Satisfaction with E-Government at All Time High

According to an article on GovTech, E-government approval has reached an all-time high, government analytics firm ForeSee announced July 24.

On a 100-point scale used by the American Customer Satisfaction Index (ACSI), the second quarter of this year earned a score of 75.6, taken from 300,000 surveys. The rating is up from 75.2 last quarter and up from a score of 70.9 in 2003.

Despite steady progress in satisfaction with government websites, the firm said there is still much room for improvement.

“Customers already interact with friends, family, companies and brands on multiple platforms. As consumers access the Web from mobile devices in greater numbers, it is natural for them to expect to interact no differently with the government,” ACSI Founder Claes Fornell said in a press release. “The federal government needs to connect with its users on multiple platforms or risk alienating them.”

The three websites with the highest user satisfaction rates are from the Social Security Administration: iClaim (92), Retirement Estimator (90), and Medicare Prescription Drug Plan Costs (90).

States Look to Develop More Mobile Apps

With more than 91 million smartphone mobile devices in the country, states are pursuing the development of mobile applications to meet citizen needs (discussed in Govtech here).

According to a February 2012 survey of 100 members of GovTech Exchange, an online community of senior-level IT pros from state and local government, many states are already moving forward.  The survey found that 38 percent of respondents planned to launch new mobile offerings within 12 months.  Of those planning new deployments, 55 percent said they will use development approaches that allow a single source of content to be viewed by multiple device types and operating systems.  Roughly half said they’ll create the apps using in-house developers, while the other half planned to work with outside developers.

 

New Realities of Government Contracting

A solid article by Steve Charles in Washington Technology, discusses the “new realities” of government contracting.  Some of the more interesting points include:

  • A greater preference for firm, fixed-price contracts
  • More scrutiny surrounding the use of interagency contracts requiring written justification that the vehicle chosen is the “best procurement approach” of all available interagency contracts
  • Greater focus on shared technologies, infrastructures and commodity purchases
  • Movement towards mobility and teleworking

We concur with all of these points.  Most of these trends are in line with what is happening in the private sector as well.  Technology is driving many of these things as access, sharing, mobility, security, and other related trends converge.

What do you think?  What trends are missing from this list?  We’d love to hear from you.

 

Government with its Head in the Cloud

Cloud computing icon

Image via Wikipedia

Michael Koploy,  e-Procurement Software Analyst for Software Advice, writes a solid article on cloud computing in the public sector in his State of the Union: Public Sector and the Cloud.  He makes a good case that the key to government movement toward cloud services is, and will continue to be, cost reduction.  With huge debt and significant budget cuts, government IT managers will no doubt be drawn to cloud services as a lower cost approach to on-site management.

So why aren’t government IT managers flying full speed into the cloud?  Michael says threats to security, and a loss of ownership are key barriers.  It only takes a couple of well-publicized security breaches to make IT decision makers in the government squeamish.  Recent hacking incidents raise questions about just how safe the data is when it’s “outside the walls.”

From our perspective, we continue to be bullish on contractor cloud opportunities.  The commercial world is embracing it dramatically, and, like other trends, government will lag behind, but follow.

It goes back to one of our key principles related to selling to government buyers:  they don’t like risk.  IT contractors will need to double efforts at securing networks, data, etc. (and double efforts at convincing buyers).

Relationship Building Strategy: Leveraging Shared Values

If you’ve been in sales for any length of time, you have probably heard the rapport-building advice that upon entering a prospect’s office, you should look for ways to connect with what is important to him/her on an individual level.  Pictures of family on his desk?  Talk about your kids.  Golf trophies on her bookshelf?  Tell her about your trip to Pebble Beach.  The theory?  Practicing this method provides common ground between you and the prospect–important for laying a relationship foundation.

It’s decent advice on the surface, as honing in on prospect passions is clearly an effective method for easing initial introductions.  However, deeper relationship building requires expanding this practice beyond the initial meeting.  Salespeople should move past thinking the method is just an ice-breaking gimmick. Instead, sales pros should focus on ways to build a deeper shared value framework between you as the seller and your prospect (or strategic partner) over the long-term.

Here’s one process for doing this:

  • Observe.  Make a concerted effort to become more aware of interests and values.
  • Capture.  Make notes about the interests/values you uncover and capture these in your contact database.
  • Review.  Revisit the values you have observed regularly so you’re tuned in.
  • Collect.  Be on constant lookout for things you know will pique your prospects’ interest or tap into mutually shared values.  Simple things like news articles or pertinent websites are great.
  • Share.  Commit to passing along content that will be of interest to prospects and reinforce shared values.
  • Be Genuine.  Don’t overdo it.  Trying to “force” shared values where none really exist will backfire on you.

Leveraging shared values takes some effort, but it will help you develop deeper prospect relationships–the absolute key to “owning an RFP” and winning deals.