Concerned about unpredictable and changing government buying strategies, contracting executives are focused on improving their strategies to win business, according to a new survey of industry officials.
Simply having superior products and services no longer gives a company the leg up needed to win contracts. The government is awarding fewer large contracts, increasingly buying through smaller task orders, structuring contracts with short-term goals and focusing on small business contracting.
At the same time, government funding is becoming more unpredictable. Years of short-term funding through continuing resolutions and the threat of sequestration — a roughly $1 trillion cut — have thrown old, familiar government spending cycles into turmoil.
The changes, business leaders indicated, are making it more important than ever that they fine tune their practices for pursuing new work.
Deltek surveyed 244 business unit heads, chief executives, chief operating officers, business development leaders, proposal managers and others from 138 companies that provide information technology or professional services to the federal government and have annual revenues of at least $25 million.
Leaders singled out one solution for dealing with the changing procurement environment: strengthening their company’s internal business development and proposal capabilities. Generally, these business development pipeline processes are critical to creating competitive advantages and reliable ways to generate contract wins.
Fifty-five percent of mid-size contractors and 54 percent of large contractors surveyed said improving these abilities is important.
Forty-eight percent of mid-size contractors also noted they would like to make better use of processes they already have, citing that they would like to see more consistent implementation.
For contractors concerned about financial performance, these kinds of improvements are viewed as a key way to improve revenue, profit and stock price.
Angie Petty is a senior principal analyst at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.