What to know as Q4 2021 federal spending boost gets underway

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No matter how late Congress is in enacting the federal budget each year, one thing never changes: The fiscal year ends Sept. 30. That means the federal fourth quarter and the use-it-or-lose-it spending boost are on. For annual advice on how to deal, federal sales and marketing consultant Larry Allen spoke to Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: And we should return to the fact that yes, in the fourth quarter contractors have some things to do to maximize making their numbers. Let’s review those again.

Larry Allen: Tom, I think that what you do as a contractor during the fourth quarter kind of depends on just where in the fourth quarter we are right now, there are certain things that I think companies need to focus on, some of those may carry through, but there are going to be some that drop off the closer we get to your end. But right now, I’m telling contractors that they really ought to look at three things. The first thing is coordinating their marketing message with their sales team activities. Now, that may seem obvious, but how many times we’ve driven down the road listen to what sounded like ads from three years ago from a contractor that they dragged out again, to rotate around a year. And that doesn’t really match what they’re selling today. In all likelihood, federal priorities have shifted, federal budgets have shifted. So your marketing message needs to be teamed up with what your sales people are saying. So that when you’re sitting in front of a federal customer, federal prospect, they’re hearing the same message from you, and that that message matches with what their priorities and needs are. That’s the number one thing that I think, at the beginning of the fourth quarter, you really ought to make sure that you’re doing to other things more on the contracting side, government has kind of telegraphed that they’re going to be changing some of their acquisition methods during the fourth quarter, Tom. Now, I’m not suggesting that indefinite delivery, indefinite quantity, contracting things like multiple award schedule, or NASA soup or other GWAC sales are going to go down, those sales are going to continue to be really important through the end of the fiscal year, just as they are every fourth quarter. What I am starting to see though, is contractors saying, hey, that acquisition that we were falling in our pipeline, it was scheduled to be GSA Alliant by now the agency is telling us they’re pulling it off the streets, and they’re going to repackage it as a small business set aside, that’s going to be to match administration goals to try to increase the number of dollars that go to small minority businesses. In other words, the channel you thought would be your fulfillment is switching on you. And you better line up with that. That’s exactly right, Tom. And so if you, instead of having that Alliance contract, which is always going to be important, you also want to make sure that you’ve got small disadvantaged business partners, or veteran owned partners, or whatever it is, your customers telling you look, this was going to be the acquisition method. This is going to be the new acquisition method. You want to be flexible enough and have the capability so that you can still participate in that piece of business you’ve been tracking. The third priority is to keep an eye on the RFPs and RFQs once they are issued, there could be some new terms and conditions in their time, things that maybe match up with presidential executive orders. It’s possible that not right now, but possible later on this fourth quarter, we could see some executive orders on Made in America have some proposed or interim rules on climate change some interim rules on small business use again. So you really want to understand as a contractor what those new requirements are. While we thought by this time last year, we would have CMMC rules and there may be some CMMC rules in RFPs, even though the CMMC process has gotten off to a very, very slow start. So whatever it is, you want to make sure that you know what your company is signing up to comply with, that it can comply. It can comply that a business discussion needs to be had.

Tom Temin: We are speaking with Larry Allen, president of Allen Federal Business Partners. And you mentioned some rules in the making deriving from presidential orders. This climate one is interesting, because it may not be that the requirement you have to fulfill is related to what it is you’re selling, but it’s more your behavior as a company.

Larry Allen: Well, that’s right. And in May, President Biden issued an executive order on climate change. And the acquisition community is kind of expecting either a proposed rule or maybe even an interim rule to come out this summertime right in the middle of fourth quarter that would potentially require contractors to do two things. One, it would require them to publicly disclose greenhouse gas emissions. Which means that you will be having to track greenhouse gas emissions if you’re going to be able to disclose them. And second, that you track and publish the social cost of greenhouse gas emissions. And those can be considered in procurement decisions. I’m not sure what the definition of social cost is Tom, or our company is supposed to consistently track emissions unless there’s an existing industry standard. But we could see this coming into procurements this summer. And thereafter, while it’s primarily focused on product contractors, there’s no exemption right now for anybody selling services. So if you’re a services company solutions company, this requirement would still apply to you. And it suggests that you better be out tracking greenhouse gas emissions for your buildings, for your transportation related activities, whatever else it is that it takes for you to deliver that service or solution to a customer.

Tom Temin: Sure, you’ve got to count your employees on the contract, they breathe, and therefore they’re producing Co2. And I guess if you’re a reseller, you would be in that situation, perhaps what it is you are reselling, you could have to trace it back through your supply chain. And then there’s delivery trucks that have tailpipes. I mean, when you think about it, only the imagination limits how far this thing could spider out. But it’s all a gigantic compliance effort and reporting effort. And probably there’s a template somewhere for each employee that breathes equals 12 social units or something. I don’t know that. That’s the kind of thing they’re going to be getting into.

Larry Allen: There’s no question there, there’s going to be a great deal of specificity here. Climate change, and the administration uses the term climate crisis more frequently, Tom, that gives you an indication straight away of the degree of importance they tied to this issue, it’s going to drive up the costs throughout the acquisition system. It’s something that both buyer and seller need to be prepared for and aware of, and it could very well start coming soon, to a procurement near you before the end of this fiscal year. And as we near the end of the end, and we’re not there yet, we’re only in early July. But let’s say as you get towards late August and September, you probably need not only a variety of channels, you might need to dance to but I mean, on the government side, and on the federal on the contractor side, you have to find available contracting officers that can handle the workload. Well, that’s another challenge. And certainly, we see this, every year, we see certain contracting shops closing early, that’s enough, we can’t take any more acquisitions in. Thank you very much. So if you want to get that acquisition done, again, whether you’re operational agency or government contractor, you have to go shopping now for another acquisition office. A lot of times, Tom, that takes people to the assisted acquisition offices of either GSA or the Department of Interior. And yet, those groups have their own rules about cut off times, too. So right now would be a very good time to talk with anybody that you know in assisted acquisition, to see if they’re still taking new projects, even now, at the beginning of the quarter. Some, well, some may not. But if you have an important project, you want to make sure it gets acquired this fiscal year for lots of reasons. Assisted acquisitions may be an important way to go. That’s way to augment an agency’s internal acquisition workforce. And every year that’s required more, I suspect it will be required just as more of this year. This is going to be a traditionally hot fourth quarter, full appropriations, a lot of money, particularly in the Department of Defense, and will set us up well, I think for next year to go through this but maybe with a different accent on civilian agencies. But the bottom line is a lot of activity to be done between now and September 30. Take those vacations and family reunions in October and for now focus on what the world the work is that you’ve got to do.

Tom Temin: Larry Allen, this president of Allen Federal Business Partners, as always, thanks so much.

Larry Allen: Tom, thank you and I wish your listeners happy selling.

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