The End of Year Spending

The end-of-year spending spree, a time-honored tradition in the federal government, appears to show no sign of abating.

Although in theory agencies take a more strategic approach to information technology spending than they did, say, a decade ago, most still end the fiscal with a flurry spending in effort to use the last of their appropriated funds. As always, they fear having their budgets reduced in the next fiscal year if they do not use all the money available in the current one. In other words, use or lose it.

The End of the fiscal year is not as close as many would be expecting, normally the end of the fiscal year will be September 30^th, midnight. What this mean is all agencies must spend their budget prior to midnight September 30^th. As I’ve continued to share with you, spending nearly 600B in 5 months is just about impossible. Recently the House voted early Friday 219-203 to pass a continuing resolution that funds the government through Nov. 18, setting up a battle with the Democratic-controlled Senate.

Continue to position your companies for ongoing fiscal year 2011 spending at least through Nov. 18.  

5 Things You Need to Know to Close Deals as Fiscal Year Ends

Just a few weeks remain in the most turbulent federal fourth quarter in memory. On Oct. 1, a new fiscal year will launch without a budget of its own. In the meantime, you’ve still got fiscal 2011 to close out. At this point, your sales group must swerve into expediting mode in order to close as much business as possible in the remaining month until the end of the fiscal year. While marketing and business development really can’t do much for the current fiscal year, you still have time to close sales.


Here’s how: Concentrate your expediting activities on making sure contracting officers receive complete, sign able packages they’ll be willing to move on. Keep in mind, they are in a mode of only signing and moving packages entailing the least friction for them.


To ensure closure, make sure you can affirm the following statements...

How Sept. 11 Changed Government Contracting Forever

When terrorists hijacked four planes to use them as weapons and killed thousands of innocent people in the process, a chain reaction started that quickly swept across the country. Today we live with many of those changes, from heightened security checkpoints at airports to more requirements to get a driver’s license. Government contractors saw their market changed overnight, with a rush of government spending on new security priorities, creating an abundance of business opportunities. Ten years later, contractors still feel the impact, including the types of business opportunities available, the role of the financial markets and the relationship between contractors and government agencies. But other changes have been at work as well. Some are counteractions to the reaction to the Sept. 11 attacks. Others would have happened anyway. Either way, contractors have been in a near-constant state of evolution over the past decade. That condition is likely to extend well into the next decade.


A Need for Speed
The biggest game-changer was the sudden awareness of the security vulnerabilities that threatened the United States and the need to address those vulnerabilities. Before the attacks, terrorism was thought of as something that happened somewhere else. “What Sept. 11 brought home was that we were vulnerable. The government reaction was to rapidly start addressing security issues, which meant the allocation of funds and the awarding of contracts. First, there was the creation of the Transportation Security Administration and then the Homeland Security Department. Other agencies such as the Justice and State departments increased their spending on security. More money also began flowing to state and local governments in the form of grants. The heightened security concerns also led the United States to launch the wars in Afghanistan and Iraq, and supporting those efforts also helped fuel an explosion of spending with government contractors. In fiscal 2000, the contractors on Washington Technology’s Top 100 rankings had an aggregate of $26.8 billion in prime contracts. In fiscal 2010, the number had climbed to $132 billion. Much of that growth was driven by the need to support warfighters and to support intelligence and homeland security initiatives. “The clock speed of contracts and task orders increased significantly,” “With 9/11, money moved very quickly, and companies had to adjust and modify their business development efforts and response times.”The government wholly embraced the use of indefinite-delivery, indefinite-quantity contracts because agencies could move quickly to address a need. That trend has become a fact of life in the government market as these large task-order contracts have become the vehicle of choice for buying services and products. “The increased use of IDIQ contracts and the quicker turnaround of those activities has changed how we do contracting,”

DOD Urged to Speed up Small Business Contracting

Defense Secretary Leon Panetta has warned the Defense Department's senior leaders that they will not reach the small business contracting goal for the fiscal year if they keep moving at the current pace.

“With only six weeks left in this fiscal year, we are falling short of meeting our departmentwide small business contracting goal of 22.3 percent,” he wrote in a memo on Aug. 24. “Secretary Panetta urge senior leaders and everyone in their organization who is involved in the acquisition process to review all planned acquisitions for the remainder of the year to identify opportunities for increased contracting with small businesses."

Ashton Carter, under secretary of defense for acquisition, technology and logistics, would issue more guidance, Panetta also wrote.

“Dynamic small businesses play a central role in strengthening the Department of Defense industrial base and improving our acquisition outcomes,” he wrote. “Small businesses not only lead the nation in innovation, they are also proven drivers of competition and incubators for business growth.”

In a letter sent to Panetta on Sept. 2, Sen. Mary Landrieu (D-La.), chairwoman of the Small Business and Entrepreneurship Committee, offered her full support because Panetta had made small-business contracting a priority. She recommended that DOD consider small businesses when officials write policies that influence how acquisition officials and program managers interact with contractors.