With all those congressional hearings, it’s noisy on Capitol Hill this week. But contractors who listen closely will hear the sounds of opportunity, as agencies discuss their spending plans for 2024. For more on how to sharpen your hunting skills, the Federal Drive with Tom Temin spoke with federal sales and marketing consultant Larry Allen.
Tom Temin I guess people should know what to listen for and where to look for clues to spending in 2024?
Larry Allen Tom, the action right now is in the House and Senate Appropriations Committees as they go through their annual ritual of hearing from cabinet secretaries and other senior executive branch officials talking about the president’s FY24 budget request. And while some people claim that that request is dead on arrival, the fact is, Tom, there’s going to be a lot of what’s in that budget request that makes its way through either in part or in whole at the end of the congressional appropriations process. So if you’re a government contractor, this is a great time to pay attention to what is happening up on Capitol Hill. Listen to what it is the cabinet secretaries say, not just in their prepared remarks, but in the questions and answers they have with members of the appropriations panels. Also, I think it’s important to hear just what’s on the mind of the appropriators. They’re going to have an impact on how legislation is formed, Tom, that’s going to shape the way the money is spent in the next fiscal year. So if you’re paying attention right now to both what the executive branch is saying and the questions that congressmen and senators are asking, as a contractor, you’re going to begin to get a better idea what your following year could look like.
Tom Temin Yes. And besides just simply learning the specific programs and spending lines that are contemplated by the agencies or by Congress, you can also get a sense of the tone of what’s driving the agency, and that can inform your business development so that you can talk the language to an agency that it wants to hear.
Larry Allen Tom, you’re absolutely right. Talking the language couldn’t really be more important for a government contractor. This is where we get issues today like we’re talking about in the I.T. world, zero trust and cybersecurity. And, you know, years ago it was cloud and data storage and things of that nature. So the buzzwords change over time. And right now is a good way to find out what your customer agency buzzwords, what their emphases are. And one of them is going to be customer experience. But there will be others. So if you’re looking at what the agencies are saying on the Hill, you don’t even have to read all the testimony. Look at the summaries, the press releases, and again, the questions and answers after the testimony is done. I think you can get a lot of clues about how you can shape your message, how you can fine tune your sales approach and where the opportunities are going to be next year.
Tom Temin And we should also point out, as you are pointing out, that here we are in just about the doorstep of April and the fiscal year 2023 is already shifting to cleanup from acquisition of opportunities at this point.
Larry Allen Right. Surprise, we’re just about at quarter three. And I think that means a couple of things for government contractors. One of the first things that means, Tom, is that the window for having those new meet and greet meetings is going to start to come to a close. It never really stops, but it becomes more difficult to get meet and greet meetings from, say, about mid-June on. The time to have those new background discussions as at the beginning of the year, up until right about now. So if you don’t have those meet and greet meetings with new prospects on the calendar, you have a very short period of time to do that. So I recommend that you get that done now, because in about five or six weeks you’re probably not going to be able to do that anymore for this year.
Tom Temin We’re speaking with Larry Allen, president of Allen Federal Business Partners. And there’s another phenomenon, and that is that because the greater economy outside of the federal market is pretty rough right now and agencies don’t know what’s going to happen with monetary policy and so forth, Borrowing is getting difficult. There’s a bank crisis that nobody can seem to quite tamp down to zero. And so that affects how companies that have large commercial market components, sometimes when they cut back the marketing and development efforts commercially, federal gets sort of swept into that general tightening. And that can be a real mistake, can’t it, with respect to getting revenue for your company?
Larry Allen It really can be. That’s one of the things that I talk about with companies all the time, is that if you’re out of sight, you’re out of mind, Tom. You can have the greatest solution that you want. But if people don’t know about it or they haven’t heard about it lately, chances are they’ve heard about a lot of other things since you last went to talk to them. Now is the time to coordinate your marketing and sales message, make sure that people know about your solutions, and not just about the solutions themselves, but how they meet an agency’s specific needs. Tom, I am amazed constantly by the number of companies that go to the federal market who tried to do marketing on a shoestring or really don’t do much at all, and then are surprised that they don’t get the results they’re looking at. I’m not a big believer in spending tons of money, but sometimes you do have to spend a little bit of money to make a lot more money, and that’s what I’m talking about.
Tom Temin And switching to the contractor side here, you have noted the Office of Strategic Capital, set up by the Defense Department. I wanted to discuss that with you because it’s one of these trending ways that contractors, especially small business, can get access to capital and also access to federal contracts outside of the regular [Federal Acquisition Regulation], and all of that entailment.
Larry Allen Right. Tom, this is the small business investment company. And as you mentioned, it’s being run by the Department of Defense’s Office of Strategic Capital. One of the things that really caught my attention about this project is that it’s another source of funding for small businesses that’s independent of the annual appropriations process. How many times have we talked about projects that can’t be started at the beginning of a fiscal year because the government is operating under a continuing resolution? It happens every year. And one of the things I talk to companies about is, well, you have to look for non-appropriated funds so that you can at least get something started. Capital funds are one way to do that. So this small business investment company, operated out of DoD in coordination with Small Business Administration, could be another channel for small businesses to explore, that’s independent of that regular appropriations process, particularly if you’re a small business that has a really innovative product. Maybe it’s not in full production right now, but it’s a way for small businesses to participate in the market that wasn’t really there before. And I think that any time you have an opportunity to look at a capital fund or a non-appropriated funds source, it’s really worth exploring.
Tom Temin And it also might be advantageous relative to the regular small business contracting that happens in the standard acquisition cycle because there are picking and choosings going on right now among various types of small businesses. And if you’re not one of the favored classes, even under the general area of small business, this also might be an enhanced opportunity.
Larry Allen Tom I think that’s exactly right. I mean, so often there’s a temptation to look at small businesses as a monolithic entity, but right now we’re really seeing that there are different types of small businesses; that point is really being driven home. So if you’re not one of the small business socioeconomic groups that’s currently in political favor, you have an opportunity to go somewhere that, maybe go to the outside lane and still get to the finish line. And this could be the outside lane for some of the small businesses. And you really want to be aware as a small business that, I would call it sometimes the flavor of the month. We had a flavor of the month in small business contracting couple of years ago. Now there is a different flavor of the month. So if you’re not in it, you have to work a little bit harder and look a little bit deeper in order to get business done.
Tom Temin Above all, don’t try to be plain vanilla.