The end of the federal government’s fiscal year is upon us. Fiscal year 2019 ends on September 30th. If you’re a government contractor, this is likely not news to you. But what might be news is how your company can prepare for the end of the federal fiscal year and take advantage of opportunities to increase revenue.
Many government agencies increase spending in August and September, so if you were thinking you could wait until October to get those proposals ready, you might want to reconfigure your schedule. With this in mind, let’s dig into the reasons for the increase in contracting opportunities as well as some of the ways you can position your company to reap the benefits.
Why does the government increase spending this time of year?
Like many private corporations, government agencies have a “use it or lose it” mentality when it comes to fiscal year-end. Having money left in the account at the end of the year likely means that amount will be subtracted from the budget for fiscal year 2020 because the assumption is if they don’t use it, they don’t need it. So, the looming end of the budgetary year brings a rush of purchases as departments try to spend their “emergency” or “rainy day” funds.
The end of the fiscal year also means that new funds will be released with the start of FY 2020. So many agencies that have spent all of their funds earlier in the year can now start thinking about how to use anticipated funds when the new budget takes effect.
What can your company do to prepare for the end of the federal fiscal year?
The first step in the process to be able to compete for federal contracts is to register your business in the System for Award Management (SAM). Basically, any person who wants to do business with the federal government needs to complete the SAM registration. This includes small businesses providing services such as construction, architecture, and engineering, as well as other product vendors.
If you’re reading this, though, you’re likely registered already as a pre-approved vendor and are very familiar with SAM. So let’s talk about how you can make the next few weeks count.
1. Focus on deals that you can close fast.
Because you are dealing with a hard deadline, it’s time to focus your efforts on deals that are ripe. These might be deals you’ve had in the pipeline for a while and just need a little shove. Or perhaps you can identify products and services customers are asking for now and target agencies with similar needs.
However, before you go too far chasing down money that isn’t there, do some research at the Congressional Budget Office (CBO). Learn what appropriations have been withdrawn and think about how they might affect your bids. For example, according to the June 2019 monthly budget review, defense spending was up 8 percent, with the largest increases being in operation and maintenance, procurement, and research and development.
2. Be on the lookout for new contract opportunities.
Most federal agencies post requests for proposals on websites such as FedBizOpps.gov or the Contract Opportunity Finder on usa.gov. With these services, you can create a free account using your email address, choose basic keyword or industry-specific searches, and set up daily alerts.
To avoid the inevitable missteps involved in DIY-ing the process of researching opportunities, however, growth[period] offers opportunity identification as a client service. We begin by matching your firm’s core competencies with market areas and identifying opportunities in each space. Next, we research lateral markets to determine performance cross-over opportunities. Our research staff will keep you updated on all forms of contract and funding opportunities.
3. Stay persistent.
If you’re used to doing business with the private sector, you may be surprised to find that no response to a bid for a government contract doesn’t necessarily mean that you are out of the running. While it does take a fair amount of time and effort to have your bids considered, it is worth it to keep submitting.
If this is your first time applying for a government contract, this is a great time to give it a shot since there is an increase in opportunities at fiscal year-end. You’ll want to pay attention to the specifics of each Invitation for Bid (IFB), Request for Proposal (RFP), Request for Tender (RFT), or Request for Quotation (RFQ) and be sure to address them in your submission. Once you understand the terminology, requirements, and qualifications it gets easier to submit.
Will there be another government shutdown?
This is a fair question to ask, in relation to what you need to do to prepare for the end of the federal fiscal year, especially if last year’s December federal government shutdown came as a surprise and left your company scrambling. Of course, we don’t have a crystal ball, but Congress passed and the president signed into law a two-year budget deal that increases federal spending and raises the spending ceiling.
The legislation eliminates the threat of a debt default until after the 2020 election and reduces the chances of another government shutdown. This is good news because if Congress had not taken action, the Treasury Department was projected to run out of money to pay its bills as early as September, which would have resulted in a default on U.S. obligations and likely shattering of financial markets.
Still, Lawmakers will return to the Capitol after Labor Day to hammer out the North America trade deal, the outcome of which remains uncertain, and a thin legislative agenda. They will also need to pass individual spending bills to avoid a government shutdown on October 1st.
So, while disaster appears to have been averted for now, none of the above guarantees there won’t be a government shutdown in the near future, which is all the more reason to go for FY 2019 contracts in the next several weeks. At growth[period] our team is ready to help you position yourself to take advantage of these opportunities. If you’re ready to try a new growth strategy, connect with us. We’re focused on your growth.