DorobekInsider: Stories of the Decade: Looking at the changing government marketplace

All month on Federal News Radio 1500 AM’s Daily Debrief with Chris Dorobek and Amy Morris, we are looking at the Stories of the Decade — taking a look at the stories/developments/ideas/events that defined government in the past 10 years as we end the first decade of the 21st century. (Read how the idea for the series came about — and suggest ideas for guest or topics from my initial DorobekInsider post talking about how this series came about. Read that here.)

We are pulling all of our Stories of the Decade conversations together in one place — and we have had a number of great conversations

* Former Rep. Tom Davis talking about 9/11, Hurricane Katrina, and procurement
* Federal News Radio’s senior correspondent Mike Causey on how the Thrift Savings Plan really came into its own in the past 10 years
* NextGov’s Bob Brewin on how health information technology has saved lives — and money
* Steve Radick of Booz Allen Hamilton about Gov 2.0
* Government marketing guru Mark Amtower, the host of Federal News Radio’s Amtower Off Center, talking about the changes to government marketing in the past 10 years

Today, we spoke to Ray Bjorklund of market research firm FedSources talking about the evolution of the government marketplace — and the decade of the frenzies — a fascinating take.

He actually sent us a great explainer — essentially, his thought, but it was so good, I thought it was worth sharing:

Not sure there’s a single “issue,” but I suggest address the decade behind us as the “decade of the feeding frenzies.” The decade has brought us wondrous new technologies for convergence, mobility, and social networking and aggravating, enhanced threats against those technologies.

But sandwiched between two recessions that have contributed to increased competition for federal contracting dollars, we have witnessed wishful pursuits of business that have many times been less than rational. In the months following 9/11, we saw small companies betting their whole business and large companies betting entire business units on “homeland security.” After “boots and suits,” what was left did not meet expectations. The ensuing wars have yielded new opportunities for technology contractors, but “beans and bullets” have been more important. The rise of the Intelligence Community also brought new opportunities, but evolved into more of a tightened re-alignment of existing resources. The feeding frenzies often targeted left the participants less than satisfied.

Healthcare reform has been a big topic, and healthcare IT was to be a big thing. After establishing an Office of the National Coordinator, the wheels fell off that wagon when the participants and collaborators found information exchange was a hard thing to do. Health information technologies incentives were tacked on to the ARRA and so we’re starting over again, but most of the appropriations for those provisions are going to commercial healthcare providers and practitioners who haven’t shown a lot of excitement about them.

And then there’s the icing on the cake: the stimulus bill. When industry got excited about the $787B price tag and decided to chase those dollars, many of the companies in pursuit were slow to realize that less than 8% of the economic stimulus would be destined for federal contractors. And, typically, directed toward existing contractors working existing programs. There are many (appropriate) instances of less-than-fully-competitive acquisition procedures.

We’ve certainly seen ups and downs during the past decade, but the net-net of it is that growth in contract spending has only risen 2% in that time (CAGR GFY2001-2009). The federal market is still a great place to be—where you can make meaningful contributions to our national security and well-being, and be reasonably compensated for your contributions. But you have to be rational about approaching the market so you don’t end up committing to a feeding frenzy when there’s not enough in the trough for everyone.

Great information!