Contractors race for year-end business, while agencies rush to spend

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Federal agencies are moving into the spend it or lose it stage of the fiscal year with just two weeks to go. But it looks as if when the books are closed, contract obligations for fiscal ’22 will have been bigger than last year, current year. The Federal Drive with Tom Temin gets details from federal sales and marketing consultant, Larry Allen.

Interview transcript:

Tom Temin: So while people are pushing for sales, agencies are pushing for spending?

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Larry Allen: Tom it looks like we’re we’re sizing up the last couple of weeks of the current fiscal year to be a traditionally strong one. I took a look at the numbers recently that are posted on the federal procurement data systems site. And while those aren’t as accurate as people would like them to be, they’re a good barometer. And what they showed was especially for the top civilian agencies, they’re on track to either match or exceed what they spent in last fiscal year. There was a lot of concern at the beginning of this fiscal year, even six months ago, that agencies would be able to obligate all of their appropriated dollars with the lateness with which Congress passed appropriations bills. So hats off to the acquisition community for being able to work very hard and very quickly to get as much obligated contract dollars out the door, being able to meet or exceed last year’s dollar totals, something I think very few contractors would have forecasted if you were talking to them back the beginning of the summer.

Tom Temin: And you cite one agency that you looked up that still has a $9 billion leftover so far, with two weeks to go and which agency is that? And what’s likely to happen there?

Larry Allen: Tom, that’s the Department of Veterans Affairs. When I looked at $9 billion in terms of lag between where they were at the end of last fiscal year and where they are right now. That’s a lot of money. And I anticipate the Department of Veterans Affairs will close that gap. Spending on veterans is something that Congress appropriated money for. It’s something that’s got bipartisan support. Conversely, if the Department of Veterans Affairs were to leave several billion dollars on the table unobligated, I think they know and everybody knows that Congress would shift into its oversight capacity and ask why appropriated dollars weren’t actually put into use supporting veterans for health care benefits and a variety of other programs. So I expect that we’ll see the VA close that gap and end up at are pretty close to where they were for FY21.

Tom Temin: Is there anything that contractors at this point can still do? I know, we’ve talked about some of the last two months types of efforts last six weeks types of efforts. Now we’re really in running down the third baseline toward home plate.

Larry Allen: We really are. And I think that this is the time when if you haven’t heard from that potential customer, it’s time to pick up the phone and give them a call, see where they are, what their plans are, they still planning on doing that acquisition this year, or are they doing it, they just for whatever reason aren’t going to be doing it with you. But you need to know that, Tom. You need to reach out. You can’t be in reactive mode. If you’re a contractor, you need to be proactive and get out in front of people. The other thing I would recommend, while you’re calling some of your top customers, call some of your top partners. Make sure that they remember you. Make sure that if there have been projects that you all have been planning on over the last few months, that those are on track that those might actually happen. Don’t sit back and wait for the phone to ring; make sure you’re out dialing it up yourself. And in the meantime, I actually think that it’s definitely worth having somebody if you’re a GSA contractor of any stripe, it’s worth having somebody look at the eBUY system on GSA. It’s not always your highest return on investment time. But there are always bluebirds that can be had via eBuy. And the eBUY system will be up and actionable all the way through the end of the fiscal year.

Tom Temin: And I think yearly, we say that you can help your federal customer by making sure that they can be directed to the most easy to use vehicle and in some way helping them help you.

Larry Allen: That’s exactly right, Tom. You never want to assume that your federal buyer knows how to buy from you. Sometimes federal acquisition professionals will definitely have an idea about the contract vehicles and acquisition methods they want to use. But sometimes they don’t. It could be a case where 90% of the time they’re used to doing one type of acquisition, but to get what you’re selling, they have to use something that they’re not familiar with. Be proactive, be the better educated contractor. Help yourself by helping your customer understand the how question, how do I buy from you. Don’t overwhelm them with acquisition options, but do give them two or three good possibilities whether it’s a standing IDIQ contract, whether it’s a small business set aside, or if there’s a real legitimate case for sole source, urgent and compelling need. That type of thing can work too.

Tom Temin: We’re speaking with Larry Allen, president of Allen Federal Business Partners and because it’s such a strong sales season, you are reminding people that there’s a big difference between government business which we’ve been talking about and government affairs, which, especially in the larger or more unusual types of businesses that a contract might be in, they need to maintain that distinction.

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Larry Allen: Tom, what I’m really talking about here is that government business people and their government affairs colleagues, and the same companies can often times cross wires. And that doesn’t need to happen. Government business, people who are out pursuing their work in a business helping to close business and drive up their revenue. And the government affairs team has their own charge, too. Both sets of individuals are important to their company, both have special talents and special relationships. Ideally, if you’re going to use government affairs in your government business, it’s going to be to leverage the government affairs people’s relationships, their knowledge, their ability to get into senior parts of an agency or even up to Capitol Hill. Not this time of year, obviously, but in a different time of year, directed spending is back and alive in Washington. And it’s that type of thing that government affairs people can help with. But if you’re a government business person, you have to realize that your government affairs team isn’t there just to be an augmentation of your business development operation. They’ve been charged by your company with doing a whole host of things. It could be tax, law, labor, whatever it might be, they have their own list of priorities, their own list of relationships that they want to protect, just like the business people want to protect their relationship. So, Tom, the bottom line here is communication. If you communicate well, then both of these parts of the company can work together. If you don’t communicate well,  I’ve seen some recent experiences where companies have actually made themselves not look too smart in front of their prospective government customer wondering why those parts of the company don’t get their act together before they go knock on the door of the potential customer agency.

Tom Temin: Sure. Jerry Connolly is not on the source selection board anywhere.

Larry Allen: That’s right. He’s a very important person, and potentially about to become more important, the next Congress, but he’s not a contracting officer.

Tom Temin: And finally, with this continuing resolution about to happen, there is some specifics in it that the White House is seeking, what are the top two or three things contractors should look for to maybe get some business out of that whole affair?

Larry Allen: What we’re talking about here is this continuing resolution that is likely to go through the middle of December, which I think is good news. You don’t really like continuing resolutions, but if you’re going to have them, you’d rather have them for a period of months than a couple of days, because that gets very stop and start and that’s not helpful. So the administration here is looking for things like increasing aid for Ukraine, disaster relief assistance. I think we saw the headlines recently about water problems in Jackson, Mississippi, that would be an example of that. And also, they’re supporting at least for now, a plan to expedite energy permit making to increase domestic energy consumption. Those are all things that could potentially impact a contractor’s federal business, depending on what type of business they’re in. Certainly Ukraine has some play for the Defense Department, maybe the State Department disaster relief as FEMA. One of the things the administration also wants Tom, but as of right now, isn’t very likely to get is significant extra money for COVID relief, but I wouldn’t hold out a lot of hopes for that. And that has strong opposition from congressional Republicans. So focusing on the areas that are likely to make it through, there might be some things in there for contractors that will enable them to start the year off a little bit better than they otherwise would.

Tom Temin: Larry Allen is president of Allen federal business partners. As always, thanks so much.

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

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