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Top 10 acquisition trends of FY17

September 1, 2017 By Andrew Smith

As the final push for fiscal 2017 contract obligations comes to an end, it’s helpful to take a step back and assess the contracting environmental trends that have emerged over the past year. Each trend lends itself to further study, so here’s a high-level look at the top 10.

1. Federal sector spending has bottomed out, with anticipated growth.

Following years of declining spending, it is beginning to appear like this decline has bottomed out, with a growth in federal spending on the horizon. While there is considerable talk, firm steps are in motion for increased contract spending, particularly in defense, with reduced civilian agency spending. Clearly, a reevaluation is occurring from the dramatic budget cuts proposed for many civilian agencies, while the Department of Defense will reap increases in the short term.

Keep reading this article at: http://www.federaltimes.com/acquisition/2017/08/25/top-10-acquisition-trends-of-fy17-commentary/

Filed Under: Contracting News Tagged With: acquisition workforce, category management, government trends, incumbent, spending, trends

What to expect as the curtain comes down on federal fiscal year 2017

August 3, 2017 By Andrew Smith

Government Product News asked Chuck Schadl for his take on government selling opportunities as the federal fiscal year draws to a close on Sept. 30. Schadl is Group Manager for Government Contracting Services at the Georgia Institute of Technology. Here are his views.

The federal government’s year-end spending sprees are legendary as agencies try to commit contracting dollars – lest they have to turn their leftover budgets back to the U.S. Treasury.

A study conducted last year, however, shows that spending just before September 30 seems to be trending downward, with more attention being given to better planning the spend that begins anew on October 1.

The study, “Positioning for 2017: Competitive Outlook in Defense and Civilian Agencies,”shows that for the past two years both defense and civilian agencies have softened their year-end spending spike. Big data and analytics firm Govini conducted the research.

That said, there’s still a disproportionate amount of contract dollars obligated in the fourth quarter of the federal fiscal year – at least 30 percent.

What can vendors do now to perhaps capture year-end money, as well as set the stage for the new fiscal year?

Keep reading this article at: http://americancityandcounty.com/federal/what-expect-curtain-comes-down-federal-fiscal-year-2017

Filed Under: Contracting Tips Tagged With: capabilities, capabilities statement, capability, contractor performance, discretionary spending, fiscal year, incumbent, past performance, performance, relationship building, spending, supplier relationships

Incumbents ruling less of the day in federal contracting

July 13, 2017 By Andrew Smith

The Obama administration’s push over the last eight years to inject more competition into the federal procurement process seems to have resulted in two major changes across the vendor community that are only now becoming clear.

First, the incumbent win rate dramatically dropped over the last year.

Second, contractors diversified into other markets, including state and local and commercial sectors, at a more aggressive rate than in the recent past to deal with the shrinking federal procurement pie.

“This gives a strong indication that competition is increasing and possibly driving down pricing and profit percentages on federal contracts,” stated the 2016 federal contractor survey sponsored by Grant Thornton released on May 30. “Companies should be looking at their current pricing techniques to determine if adjustments are necessary to win greater percentages of proposals.”

Keep reading this article at: https://federalnewsradio.com/reporters-notebook-jason-miller/2017/06/incumbents-ruling-less-of-the-day-in-federal-contracting/

Filed Under: Contracting News Tagged With: competition, competitive advantage, federal contracting, Grant Thornton, incumbent, pricing

How much are agencies spending on new contracts?

May 25, 2017 By Andrew Smith

The federal government rarely seeks truly innovative solutions when it bids out new contracts, according to a report released on May 16th.

Federal market research and analysis firm Nation Analytics’ “Government Services Competitive Intelligence Report” examined 246 task orders and contracts for federal services—each worth $50 million or more—awarded across the federal landscape in fiscal 2016. It includes federal service acquisitions, such as IT, professional services and operations and maintenance of facilities, but not one-time acquisitions such as weapons systems or construction projects.

Only 35 contracts of those contracts were for new requirements, according to the report. Agencies spent the other $49 billion, or 90 percent of the federal services spend, on the recompetition of work already being performed by existing contractors.

Keep reading this article at: http://www.nextgov.com/cio-briefing/2017/05/how-much-are-agencies-spending-new-contracts/137899

Filed Under: Contracting News Tagged With: existing contracts, federal contracts, incumbent, new contracts, spending

Mega-contractors don’t dominate DOD

May 11, 2011 By ei2admin

With the rampant merger and acqusition activity in the market, the conventional wisdom might say that the defense industry will be dominated by a few mega-players.

But not so says a new study from the Center for Strategic and International Studies.

“There is little evidence in the data that the defense industry is consolidating into an oligopoly dominated by a small number of incumbent firms,” the center’s Defense Industrial Initiatives Group wrote in a report released on May 6. The report analyzed DOD’s contract spending and its supplier base.

In fact, the report states, contractors have been coming and going throughout in the past decade, despite the fact that the top five defense contractors retained their position from 1999 to 2009.

“There were dynamic changes in the composition of the top 20 contractors in the industry” during the past decade, the report said.

However, another expert said it can be misleading to analyze the market by looking at a list of leading contractors. Instead, the true makeup of the market emerges by digging into specific types of goods and services. he said. The trends in competition and contractors emerge when looking at the number of companies capable of handling projects such as building unmanned aerial vehicles or surveillance satellites.

“Gross tabulations like ranking lists have never been effective predictors of the erosion happening to the defense industrial base,” said Bruce Williamson, an economist at the National Defense Business Institute at the University of Tennessee in Knoxville.

Either way, defense officials are concerned about the consolidation of companies.

“The department [DOD] is very conscious that the top tiers of the defense industry have already consolidated significantly,” Frank Kendall, principal deputy undersecretary of defense for acquisition, technology, and logistics, told the Senate Armed Services Committee on Emerging Threats and Capabilities Subcommittee on May 3.

And officials are predicting more merger and acquisition activity.

“We do expect some increased activity at the middle and lower tiers — activity that we will monitor closely,” Kendall said.

In further studying procurement data, CSIS found heath care companies rose closer to the top of DOD’s suppliers with the strong overall services contracts and energy companies and ground vehicle producers grew in the products side.

The services sector was the fastest growing sector, and the list of contractors changed significantly from 1999 to 2009.

“This indicates that there is a healthy circulation of contractors in and out of the top positions by value of contracts awarded,” the report states.

CSIS also found the mid-sized companies still were squeezed by larger corporations and small firms.

 

About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week. This article appeared 5/6/2011 at http://washingtontechnology.com/articles/2011/05/06/csis-defense-industrial-base-market-changes.aspx?s=wtdaily_090511

Filed Under: Contracting News Tagged With: competition, DoD, health services, incumbent, small business

How to be a contract loser, guaranteed

December 26, 2010 By ei2admin

Here’s what to avoid if you want to succeed in the government market.

The acquisition storm is coming, and it’s bringing with it an onslaught of new competitors fleeing the sagging private-sector economy, shrunken federal budgets, mounting award protests and new technologies demanding new investment. You could go emulate an ostrich — no one would blame you for the impulse — or you could read what four of the top IT consultants in Washington tell their clients.

Washington Technology talked with Ray Bjorklund: senior vice president and chief knowledge officer, FedSources Inc.; Philip Kiviat: partner, Guerra Kiviat Inc.; Kevin Plexico: senior vice president of research and analysis services, Input Inc.; and Warren Suss: president, Suss Consulting Inc., and asked each one this question:

How would a company in the federal market best keep its existing customers and add new ones in the coming year?

Some of their answers surprised us, but before we get into that, let’s back up a tick. Although the members of our ad hoc panel offered different strategies for achieving success, they spoke with one voice when describing the fastest route to disaster: Failure to take care of your customer.

You think that’s obvious? So did we, but listen to this: “I have so many clients — companies large, midsize and small — whose senior management (and some midlevel management) never talks with the customers — I see it all the time,” Kiviat said.

It doesn’t take long before those customers think their business is being taken for granted and start considering their options.

“You have to keep them happy,” Kiviat said, “and the only way you can do that is by knowing what they need and what they want, by continually asking: ‘How are we doing?’ ”

Don’t confuse the IT business with information technology itself. Technology is not the issue, Kiviat said. “We have so much technology today that, unless you’re on the bleeding edge, you can do many [kinds of IT implementations] quickly and in different ways, depending on the customer. The question they don’t necessarily ask but that you have to answer is: “What do they really want to do?”

If you’re not tending your customer, others stand ready and willing to take on the job. Even the most well-placed incumbents have their vulnerabilities.

For example, Bjorklund said, “I heard about this incumbent that was delivering a high level of service. The agency loved the incumbent contractor; they had a great working relationship. Then it came time to recompete the contract. The agency said: ‘We like you guys a lot, but your competitor came in with a bid that was 25 percent better than yours.’ And they were out.”

Your reaction to technology changes can make you appear either eager and able to take on new business or inflexible and mired in the past. Take, for example, the shift to cloud-based services, which typically requires an investment in infrastructure and technology networks in anticipation of returns.

“Federal contractors are not used to investing upfront,” Suss said. “They’re used to investing in the proposal-and-capture process but generally are reluctant, before an award has been made, to make these kinds of sometimes significant infrastructure investments and establish supplemental capabilities before they know it’s going to generate revenue.”

Not only is that a great way to sour a relationship, he said, but also “inattention to such changes in the competitive landscape may create openings for newcomers.”

And believe it — word of any real or perceived failure to perform well on contracts you have now will travel fast.

“If your past performance is not strong, you become a nonstarter, not only from the agencies’ point of view but also in the view of prime contractors,” Plexico said. “You’ll be digging a big hole for yourself.”

But getting your own house is in order is only the beginning of your to-do list to achieve success, because, Bjorklund said, “no single initiative or strategy will ensure a win. You must pay attention to all the subtleties.”

 — Sami Lais is a special contributor to Washington Technology – 12/7/2010.

Filed Under: Contracting Tips Tagged With: contractor performance, government contracting, incumbent, IT, recompete, small business, technology

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