Three Steps Government Contractors Can Take Now To Build Their Federal Business Pipeline in 2020

January 2020

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Calendar Year (CY) 2020 starts very much like Fiscal Year 2020 (October 1, 2019 - September 30, 2020) did for government contractors. Federal agencies are operating under a Continuing Resolution (CR), slowing the pace of business for now, but positioning the government for a busy back half of the year when billions of dollars must be spent or obligated. This dance should be familiar to experienced contractors as the music here is the same as in 2017 and 2018. As the CY kicks off, here are three steps that government contractors can take right now to maximize their federal business:
 

1. Get In Front Of New Customers To Tell Your Story

The first quarter of CY2020 is a period where government agencies have both the time and the desire to hear about your new product or solutions offerings. This type of discussion is different from one necessarily centered on a specific procurement, and instead should focus on educating a new contact about your most current capabilities and what differentiates you from the competition. Engaging your marketing professionals and/or consultants to showcase your firm in the best possible light will increase your chances that when a specific opportunity does arise, the new contact will think to reach out to you first. In the federal procurement process, it’s critical to convey to your new contact about how they can buy from you, too. In fact, that can be as important as what you’re selling for the reasons detailed below. 
 

2. Seek New Channel Partners

When it comes to how customers can buy from you, now is the time to enhance or build new relationships with channel partners that have special status as a preferred federal supplier. For example, does your firm have relationships with Alaska Native Corporations (ANCs)? How about Service Disabled Veteran Owned Small Businesses (SDVOSBs)? If you want to increase your business at the VA for one, it’s essential to have a SDVOSB partner. Making sure that you have multiple ways for federal customers to reach you is essential so now is a great time to develop relationships with new partners or enhance existing ones. Like any traditional joint venture, invest time to vet them to ensure that they’re a good fit for your company. It’s also never too early to talk strategy and tactics for joint new business acquisition. When that end-of-year set-aside occurs you have a clear way forward to bid on an opportunity from which you would otherwise be shut out.


3. Don't Ignore Current Opportunites

Despite the CR, it’s important to remember that the government is still open for procuring business. Smart companies do plan for the future, especially when that is where most of the revenue potential is, but they also know that there are active procurements to pursue right now. While most new projects are funded by appropriated dollars and are therefore on hold, existing systems and missions must be supported. For all of the talk about transforming IT, for example, the majority of federal IT dollars are spent to upgrade or maintain existing infrastructure. While this work may not be as glamorous as a new solution with all of the bells and whistles, it is good business nonetheless. Another way to generate revenue during the CR is to investigate working capital funds and non-appropriated accounts. Many agencies do have access to non-appropriated dollars so this can allow new projects to at least be started. Don’t assume that your federal customer knows about these alternatives, either. A little research on your part can help your customer find ways to move ahead that benefit both of you.      
   
One final note is to be prepared for when Congress does provide final appropriations for FY20.  The Department of Defense, at a minimum, should receive such funds because it has never gone an entire year operating under a CR. Furthermore, compromises from the House and Senate Appropriations Committees are also possible that would allow other agencies to be funded. There will be a lot on your plate when federal customers have to spend a full year’s worth of money in less than half the time so take the time now to plan by following the steps outlined above.
 


Contacts

Aaron Raddock
Partner, Government Contracting
Industry National Co-Leader
703-336-1693 / araddock@bdo.com
  Meredith Pilaro
Government Contracting
Tax Practice Leader
703-770-6357 / mpilaro@bdo.com

 
Larry Allen
Managing Director
703-336-1409 / llallen@bdo.com
  Derek Shaw
Managing Director
703-336-1501 / dshaw@bdo.com

 
Eric Fahr
Partner, Atlantic Region
TAS Financial Leader
703-770-6328 / efahr@bdo.com
  Amy Thorn
Partner, Government Contracting
Assurance Practice Leader
703-770-6318 / athorn@bdo.com

 
Kim Clark Pakstys
Managing Director
703-770-9049 / kclarkpakstys@bdo.com
  Alison Torres
Principal, Atlantic Region
TAS Tax Leader JD
703-770-1063 / atorres@bdo.com