As the 2015 federal fiscal year heads to a close, smart government contractors should focus on three things. All are worth a look unless your firm is planning to close up shop for good at the end of September.
1. Maintenance and System Support are the Lowest Hanging Fruit of What’s Left
Although there may be some spending on new priorities between now and September 30, if you haven’t already heard about it, your chances of getting any of that business are slim. Now is not the time to discover deals that others may have been working for months.
Who cares, anyway? Most federal IT spending is tied to the maintenance and capabilities of existing systems. These projects can range from sizeable to small, and are typically done late in the year after most new projects have been blessed and initiated.
You don’t have to offer “state of the art” solutions, either. Usually, feds that maintain existing systems are just fine with “state of the market” offerings that help enhance functionality but at a budget-friendly price point.
While keeping existing systems working may not grab headlines, they can generate decent business to your bottom line.
2. October 1 is a Big Federal Spend Day
Think the government stops buying on September 30? Think again. Traditionally, October 1 is a huge government business day. Hundreds of millions of dollars are obligated on this day alone. Why? Federal offices enter into new lease or maintenance agreements, renew options (provided money has been made available by Congress) and make “routine” purchases of other kinds needed to start the fiscal year.
New agreements to roll over existing projects should be made ready now so that you and your customer are ready to go when FY’16 starts. Even if your customer doesn’t have year-long funding (they won’t), new terms and conditions can be agreed upon at the start of the year. Funding will be provided via Continuing Resolutions until Congress finally passes appropriations bills, but that’s no reason not to get as many other terms set as possible up front.
This year, October 1 falls on a Thursday, so October 1 and 2 could be good revenue-generating days. Take your break after that. The rest of the first quarter can, indeed, be slow.
3. The Start of the New Year Could Bring Problems
Congress is upset right now over Planned Parenthood issues, as well as a pending need to increase the federal debt ceiling. Who knows what other issues may come up after Congress returns to work after Labor Day? Many budget-watchers say that a short-term shut down is possible. This, of course, plays havoc with your federal business, not to mention your federal customers’ livelihoods. It’s important that you plan ahead for what could be a delayed start to FY’16 and what will, in any case, be a start that is funded by temporary money.
It’s too early to say when Congress might pass all appropriations measures. In the meantime, remember your customer and what they’re likely concerned about. A little empathy and understanding now can help build beneficial relationships in the long term.
So, while you’re working hard to close business this year, it’s time, too, to keep an eye out on what could happen in October. It may not be pretty, but, to quote Hyman Roth of Godfather fame: “This is the business we’ve chosen.”