Experts: Vendors, be prepared for spike in demand during ‘federal buying season’
Businesses that sell to federal agencies know that the government market is nothing to sneeze at. After all, federal government purchases of goods and services should reach $1.11 trillion in 2009, rising to $1.12 trillion in 2010, according to a January Government Product News forecast. More importantly, the federal government’s fiscal year ends September 30, and that means loads of selling opportunities for savvy government marketers between now and September 30.
GovPro.com asked experts if they see an acceleration in purchasing before government agencies’ fiscal years come to an end. Here is a small sampling of responses.
Dave MacLean, vice president, federal government business, Staples National Advantage — “Yes, absolutely, absolutely. The rate of spending increases by at least 50 percent during the last couple of months in agencies’ fiscal years at the federal level. Just knowing human nature, I would absolutely surmise that it would be the exact same issue at state and local governments, because if they are not spending their budget, they are going to lose it.”
Mark Amtower, a nationally known federal government sales consultant — “There is a minor spike in spending in federal agencies in August–September.”
Joyce Bosc, president and CEO of Boscobel Marketing Communications in Silver Spring, Md. — “This time of year, government agencies are racing to spend the remainder of their annual budgets by the end of their fiscal year on Sept. 30. This can create a use-it-or-lose-it situation for your government customers and prospects, who have to spend their money by the end of September or lose it forever. The end of the federal fiscal year can be a busy time but very profitable for a business development professional who is up to the challenge.”
For an in-depth look, Government Product News talked with Jennifer Schaus, who directs Jennifer Schaus & Associates, based in Washington, D.C. Schaus’ boutique consulting firm works on behalf of businesses to add their products and services to the U.S. General Services Administration’s (GSA) Federal Supply Schedule. The organization also provides business-to-government sales strategy and business development support, including proposal writing.
GPN: Would you have any advice for government marketers as we approach the end of the federal fiscal year?
JS: My best advice for government contractors at the end of this particular fiscal year is to put your running shoes on, as there will be a sprint to the finish line. Leave no stone unturned. Government contracting has always been competitive both in price and value. Currently, this market will be even more of a “survival of the fittest” playing field. Many companies are entering this vertical to keep their business afloat by attempting to capture government business and the ARRA (American Reinvestment and Recovery Act) stimulus funding.
GSA Schedule proposals, or the basic “license to sell,” are being sought after at record numbers as everyone wants to compete for contracts. An increase in contractors/competition will make each business work harder to prove their value, expertise and leverage any differentiators such as the GSA Schedule, 8a or small business status, HUB-zone, etc.
While the newcomers are still learning the “How To’s of B2G,” this fourth quarter is an optimal time for current contractors to capitalize on their knowledge and existing relationships. The “freshmen class” of B2G’ers is aggressive and eager to compete. Understanding your competition, your solution and your customers’ needs (including how and when they purchase) is vital in any industry. Moreover, as the B2G vertical grows in popularity, knowing, understanding and executing these processes better than the competition will set you apart and accelerate your sales success.
GPN: Does federal buying accelerate at the end of the fiscal year?
JS: Absolutely. Typically we see significant spikes in federal buying during the fourth quarter (July, August and September), as the government has a use-it-or-lose-it policy. Despite our present economic situation, this FY09 money has already been appropriated. Each federal agency is in the process of financial reconciliation to assess remaining funding and agency needs, and to review “wish lists” for the rest of the fiscal year. The serious contenders who will gain the most with a competitive advantage are contractors who have built relationships and presented their solution to the myriad of players and decision makers involved in the procurement process. (This can take six to 24 months, as business-to-government sales is a long cycle and a long-term investment.)
There will be many “quick buys.” These fourth quarter procurements can be fast and furious, comparable to a child in a candy store with a set amount of money and limited spending time. Additionally, the vendors who have successfully created and demonstrated their capabilities as a “partner” and “solution provider” may receive product and pricing inquiries from the government. These contractors and all vendors should be available, aggressive and ready to go at a moment’s notice.
Future issues of Use It or Lose It E-news will contain more information about the federal buying season. Postings on www.govpro.com also will cover the topic.