Federal spending for vendors, services and products in 2009 targeted many areas. The largest two areas were Government Contracts and Federal Grants, comprising approximately 70% of the total spent. However, in 2009, 46% of the total spending went into grants, overshadowing contract dollars by almost 20%.
With an overall rise in grant popularity and spending and a federal goal of decreasing in the percentage of overall contract expenditures, the Government is clearly showing the direction of spending trends likely to occur in 2010. As contract companies prepare proposals for Government contract opportunities, the Government is actually working on shifting more funds to Federal Grants and Government Civilians Acquisition Programs, as mentioned in one of our previous blogs.
As contract centric companies target government contract opportunities, they need to be acutely aware that targeting grants, preparing grant proposals and applying for Federal Gants may be as successful, and as profitable, as traditional contract opportunities.
In addition, knowing current trends on how Federal Contract spending is executed can lead to winning profitable contracts while providing the foresight to pass by potentially unfunded, or poorly funded, unprofitable contracts.
Specifically, 2008 and 2009 saw an increase in multi-year contracts awarded using “excess” or “leftover” funds from other contract and spending programs. While this has created additional contract opportunities, it has also created many contracts that have premature funding shortfalls when next year’s “excess” funding is not as large as the previous years. With the new Government Executive Administration, new contracts solicitations are being scrutinized based on necessity, causing a trend of existing contracts to be “expanded” by adding funds into existing programs, instead of trying to justify new contracts.
These trends indicate that existing contracts, specifically multi-award Indefinite Quantity contracts are likely to see an increase in funding, while smaller contracts utilizing excess funding from previous years are likely to be unfunded, or underfunded. Companies providing services to the Federal Government cannot propose all solicitations and grants. As such, understanding which opportunity is likely to be successful and profitable in the coming years is critical in choosing which contract, grant, or opportunity to target, pursue and expend effort on.
About the author: Jason Wilson, the SGIS Division Manager of the Intelligence and Training Division, is a recently retired US Army Warrant Officer with 21 years of military experience. Wilson has strong relevant operational and institutional credentials and subject matter expertise as well as 19 years of experience in leadership and contract supervision positions.
Specific accolades for Jason Wilson include:
Certified Project Manager (CPM)
5 years supporting DoD and US Army level acquisition programs
6 years supporting and participating in Advanced Concept Technology Demonstrations and Joint Capability Technology Demonstrations
6 years supervising a theater wide contract for Oracle and MS SharePoint development
If you are interested in reaching out to the author via discussion, visit SGIS on LinkedIn.