Contracting

Record federal contract spending during a pandemic

Talk about a mixed bag. There's pandemic and a record season, the federal contracting spending, how ready is your company for all of this?

Tom Temin@tteminWFED

July 21, 2020 3:15 pm

6 min read

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Talk about a mixed bag. There’s pandemic and a record season, the federal contracting spending, how ready is your company for all of this? Federal Drive with Tom Temin got some tips from federal sales and marketing consultant, Larry Allen.

Interview transcript:

Tom Temin: And Larry, you have documented as others have that it’s a really good year for federal contracting now that we are in the height of the season. Kind of ironically, since everything else seems to be falling apart everywhere else you look.

Larry Allen: Tom, I think we are going to be in very good situation if you’re a government contractor moving into the end of the fiscal year. Course, experienced contractors know that the federal fourth quarter is the time of year when the most business gets done anyway. But I think that’s going to be particularly true this year. And I think while we’re going to have a good July and a reasonable August, we’re going to have one really tremendous ride in September. And I attribute that to some of the pandemic impact, Tom. Agencies either didn’t buy things, or they bought only things that were really related to their pandemic response: Personal protective equipment, maybe they bought some laptops for a new work-at-home workforce, those types of things. But those critical projects, the ones that had been on the drawing board since the beginning of the fiscal year, those kind of got pushed out to the right. They haven’t happened yet. One of the examples I could give, things like GSA’s Enterprise Information Systems – their big telecommunications contract. Congress is screaming at agencies to get moving, get on the ball to implement change. And the good news is that there’s money to do this. And there’s also some time, but you’re going to have to move quickly, and you’re going to have to work smart, whether you’re in government or industry.

Tom Temin: Yes because contractors have been hit, in some cases by their own dealings with this pandemic. And so that’s affected, you know, in some cases, their cash flow. In some cases, their ability to field the sales force that you sometimes need to field. Government wasn’t there to any to talk to them anyway. So there’s a lot of almost mechanical things you have to do. I would think just to get repositioned to take advantage of what’s going to happen in September.

Larry Allen: Well, I think there’s a certain part of that, and a distraction for federal contractors and for federal workers alike is the gradual reopening of federal offices, which also means there’s some gradual reopening of contractor offices. This is a time though not to be distracted by things like that, particularly if you’re a contractor, you have to stay focused on your business. You have to stay focused on making sure your customer knows not just what you’re selling but how they can buy for me. And that is going to be so critically important this year, Tom, when there’s a lot of money that needs to be spent. A lot of “use or lose” funds that need to be obligated. And agencies are going to have to look for ways to make smart decisions quickly. So using things like indefinite delivery, indefinite quantity contracts are going to be essential. And as a contractor, you need to be prepared to show your customer how to use that type of contract in a given circumstance. You can’t assume that your acquisition professional knows that because that professional’s doing lots of different types of acquisitions. Maybe they’ve worked on an architect and engineering buy or they’ve been so used to doing emergency procurements for COVID-19 that they have to be reminded “oh yeah, we can use this GSA schedule or we can use NASA SEWP” to get some of the needs that we have to get filled here.

Tom Temin: We’re speaking with federal marketing and sales consultant Larry Allen. And you mentioned the IDIQs and the ones that come to mind besides EIS, but there’s also NASA SEWP, there’s OASIS, there is the – at least the big companies Alliant. There’s a lot of these NITAAC CIO-SP contracts – don’t these agencies that operate these tend to put extra staff on put, out extra guidance, go around the clock if need be towards the very end of the fiscal year to be available to buyers.

Larry Allen: Well, the bottom line is you’re absolutely right, Tom. Pretty much all of these contract vehicles add extra people and have extra help available for federal agencies. That’s really good because sometimes no matter how experienced a contractor is, federal people just like talking to other federal people to get the answers. And whether it’s NASA SEWP that has an outstanding reputation for serving customers at the end of the fiscal year, really go the extra mile for people, NITAA which does much the same or some of the other programs that you named like Alliant and OASIS, there’s plenty of government-to-government help available to lead an agency through the procurement maze and get to a fast, easy and fair, reasonably priced acquisition.

Tom Temin: And by the way, you’re putting your bet on not seeing any more stimulus money from the Defense Department for contractors. I think whatever contractors got in stimulus, in your view is pretty much what they’re going to get.

Larry Allen: That’s right, Tom, we’ve heard that congressional leaders are a little wary about giving government contractors additional relief funds. They feel like they’ve given, particularly DoD contractors, a lot of relief money, and that DoD has yet to put all of that into the pipeline. We had the Head of the House Armed Services Committee recently come right out and say, “I’m not in favor of giving contractors any more money this year.” Put that in perspective – if you’re a contractor, and you’ve been expecting money for like the CARES Act, which was supposed to fund any of your disruption from the pandemic, you’ve got what you’ve got, and you’re going to have to make the most of it with additional revenue and sales that your company can drive. It’s unlikely that you’re going to get a lot more. I would pursue the path that assumes you’re not going to get any more, which means that you’re putting your resources back into business development, back into the things that you can control. Look, we’ve had some increased budgets in DoD. Congress is poised to provide over $720 billion in funds for DoD for next fiscal year. So the money is here now and it looks as if it will be set up to be there next year as well. Go out, make sure that you are promoting your solutions, promote what you have now because remember, this is a risk averse federal buyer. They’re not looking to totally redo. They’re not looking to tear down their house and build a new one. They’re looking to renovate what they’ve got in a lot of circumstances. So offer those solutions and importantly, whether it’s an IDIQ, or a small business set-aside, or a nontraditional procurement like an other transaction authority buy, be prepared to show your client how they can get to you quickly and easily.

Read more: Contracting

Tom Temin: Federal sales and marketing consultant Larry Allen, thanks so much.

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

Tom Temin: We’ll post this interview at FederalNewsNetwork.com/FederalDrive. Hear the Federal Drive on your schedule. Subscribe at Apple Podcasts or Podcastone.