Q1 Federal Outlook – Work Now Brings Benefits Later


We recently participated in a conference call with a client trying to sell a new offering into the federal market. The list of “hot prospects” was short and significant, near-term projects were similarly situated. Senior executives from some of the company wondered “what’s going on?” Welcome to the first quarter of the federal fiscal year.

Remember those articles in September that talked about a “Continuing Resolution?” That is what funds the government from now until at least mid-December. While the government is open for business, no new projects can start. Although this has been said before, it needs to be repeated, and perhaps shared with non-federal executives you work with. Continuing Resolutions (CR’s) are great for keeping existing projects going, but no new projects can start until an actual appropriations bill is passed. If Republicans take control of the Senate, that likely will not happen until we are well into the 2015 calendar year.

Smart government contractors are working on at least three fronts right now.

First, they are taking the opportunity of a slow start to get educated on trends, budgets, emerging priorities and new federal people. This is the single best time of year to get training on federal business. Countless classes from nearly every group you can think of are being offered on topics ranging from FY’15 IT budget priorities to contract compliance. This knowledge is the foundation upon which you can build your FY’15 business.

Second, companies are out meeting with contacts in federal agencies discussing what is coming down the pipeline once appropriated dollars are available. Your firm likely has several customers that are willing to share their planning with you. Ideally, these discussions are two-way affairs, meaning that you have the chance to shape an upcoming project, rather than just know it is coming. Don’t forget to meet with other contractors now, either, as those discussions can lead to similar business development opportunities.

Third, there is on-going work to be done. Anything your customer started work on can continue.  If you’re the prime on that project, you should see it moving ahead. If you’re not the prime, ask around to see who is working on it, if there’s an opportunity to subcontract to them, or if the federal agency is using an incremental approach to their project that allows for you to compete on the upcoming phases.

There are also some government projects that aren’t beholden to annual appropriations. Some projects have multi-year funding, while others are considered “mandatory” spending that must take place to matter what. Some Department of Defense (DoD) projects have multi-year money, while IT projects that support Medicare, Medicaid, VA benefits and Social Security likely fall under the umbrella of “mandatory” spending.

While the first quarter of the federal fiscal year is slow compared to the last six months of the year, the government is open for business. Note that the call we were on had short, but real, list of projects.

So, whether it’s training, foundational development, work on current projects, or some combination of all three, see what’s there that might be a good opportunity for you. There is always something happening in federal IT.







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