Federal contractors face uncertainty on many fronts. Most prominently, an ongoing global health crisis, a worsening economic recession, and government instability coalesced to create a challenging economic environment.
Even so, the future isn’t entirely plagued by bad news. The federal government spends trillions each year on contracts for goods and services carried out by the private sector. Despite ongoing fiscal disagreements, federal contract spending is expected to increase slightly in 2021, representing a rare bright spot for businesses looking for ways to thrive in the year ahead.
To remain competitive in 2021, federal contractors will need to market their efficacy by accounting for expenses, personnel and resources more precisely than ever before.
For companies reliant on federal contracts as part of their business model, here are the priorities to maximize their marketability in the year ahead.
Federal contractors should be prepared to collect and share comprehensive spending and compensation data with federal regulators. Companies need to develop or acquire processes, tools and systems that are easy-to-use, broadly compatible and integrated into existing technologies to achieve this.
Time tracking and expense management protocols serve as de-facto data hubs, providing easy-to-understand, critical insights into company behavior. In doing so, companies should be prepared to produce data related to budgeting and analytics, policy enforcement and compliance-ready audit trails.
Perhaps most importantly, federal contractors should expect to be held accountable for equity and diversity initiatives, and cybersecurity standards. Specifically, it’s anticipated that federal regulators will focus their efforts on access and opportunity, including:
Of course, the expansive SolarWinds data breach serves as a reminder that government contractors should expect to be targeted by bad actors and held responsible for cybersecurity lapses.
For these initiatives and the many more that will emerge throughout 2021, federal contracts should be prepared to make their data visible and comprehensive, as these metrics are the first step to demonstrating value to government agencies.
While federal contract spending is expected to increase in 2021, agencies will face immense pressure to maximize return on investment. Organizations can win and retain federal contracts by demonstrating value at every level.
Undoubtedly, this process will look different than before. For example, companies are unlikely to accrue significant travel costs or other pre-pandemic expenses. In contrast, it’s estimated that the number of remote workers will double in 2021, so time and expense reporting needs to accommodate a distributed workforce, which presents unique challenges and responsibilities.
That’s why equipping employees with mobile-first expense reporting and time tracking capacity not only supports productivity efforts, but it allows companies to convey the efficacy of their services.
Time and expense reporting can support these efforts by generating clear and complete records, allowing companies to convey:
Precise project cost
Employee compensation for work completed
Overhead and expense requirements
Prepare for uncertainty
This year has been a painful and continual reminder that uncertainty and disruption are inevitable. A global pandemic, natural disaster, or economic recession could always be just around the corner. In response, companies need an approach and method for time and expense that is equally as versatile, ready to adapt at a moment’s notice.
For instance, last year required federal contracts to enact a rapid transition to remote work. This year’s disruptive moment is unknown but will undoubtedly emerge.
Moving forward, companies should be prepared to adjust their compliance on the fly, ready to meet the shifting requirements that could accompany a new year and new government.
In a challenging economic environment, federal contracts are a critical revenue stream for many organizations. To thrive, they will need to demonstrate compliance, value and integrity. In other words, companies should view time and expense audit compliance as a prerequisite to success, allowing their clear and comprehensive records to demonstrate excellence in every way.
Chris Harley is vice president of sales for DATABASICS, an enterprise-grade time and expense management solutions provider for federal contractors such as CALIBRE Systems, CACI, L2 Defense, Aerovironment, Stellar Solutions, and Chemonics. Connect with Chris on LinkedIn or follow on Twitter @DATABASICSinc.