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Selling to the government

Navigating FY 2024: Top Federal Opportunities for Government Contractors

As FY 2023 is behind us, the government contracting market breathes a sigh of relief, marking the end of a busy period. As our attention turns to FY 2024, many companies do a “reset” refocusing on growth and strategically pursuing major procurements that lay the groundwork for future success.

At this crucial juncture, GovWin’s analyst team releases comprehensive reports and webinars spotlighting the top opportunities in the federal government for the upcoming fiscal year. This year’s insights cover the top 20 unrestricted opportunities, the top 10 set-aside opportunities, the top 10 professional services opportunities, and the top 10 architecture, engineering, and construction (AEC) opportunities. (GOVCONWIRE November 20, 2023)

What sets this year apart in terms of federal opportunities?

Despite overall growth in contracting, industry participation is consolidating, a trend noted last year influencing the top opportunities for FY 2023. The decline in the number of firms receiving federal awards, despite increased federal spending, is driven by factors such as agencies adopting IDIQ contracts and rising barriers to entry due to stringent compliance requirements. (ibid)

Another notable factor shaping this year’s top opportunities is the rapid and consistent growth in small business contracting, outpacing larger businesses since 2011. Small business contracting exhibits not only a 49% growth rate but also greater stability compared to ‘other than small’ businesses. (ibid)

A high-level overview of the top opportunities for FY 2024

  1. Unrestricted Federal Opportunities: These opportunities, available to all government contractors, offer access to complex but lucrative procurements. Top opportunities, like CCN NEXT GEN, SEWP VI, and ALLIANT 3, promise task order opportunities worth billions of dollars.
  2. Federal Set-Aside Opportunities: Reserved for small businesses, set-aside opportunities provide participation avenues for various socioeconomic categories.
  3. Architecture, Engineering, and Construction Opportunities: AEC opportunities span diverse projects, from advising on capital requirements to major construction undertakings.
  4. Professional Services Opportunities: Covering business operations, management consulting, personnel and HR services, marketing, legal, and accounting services, professional services opportunities abound. (ibid)

Guidance for proactive government contractors

Having identified these top opportunities, proactive government contractors gearing up for success should focus on strategic teaming initiatives, and increasing business development investments, to increase relevant opportunities and enhance their pipelines. (ibid)

If your company targets federal unrestricted, AEC, professional services, or set-aside opportunities and is gearing up to pursue these in FY 2024, arm yourself with critical information:

  • Understand spending trends within your target markets.
  • Anticipate procurement patterns for the coming year among agencies utilizing these contracts.
  • Leverage detailed intelligence to fortify your pipeline. (ibid)

For a deeper dive into how these trends and opportunities may impact your business, give us a call.

Federal Government reaching even higher for Small Disadvantaged Businesses

Last year, small disadvantaged businesses received over 11% of federal contracting dollars. Now, the federal government aims to reach 13%. (Next Gov/FCW October 26, 2023)

The Office of Management and Budget recently issued a memo directing federal agencies to target awarding 13% of their contract spending to small disadvantaged businesses in fiscal year 2024. This objective aligns with a broader target set by an executive order earlier this year, which calls for the government to ultimately allocate 15% of federal procurement dollars to such businesses in fiscal year 2025. (ibid)

The executive order, focused on advancing racial equity and supporting underserved communities through federal government initiatives, also instructed the Small Business Administration to establish annual agency-specific goals in collaboration with other departments to further the government’s overall objectives for small disadvantaged businesses. (ibid)

In her October 18, 2023 memo, OMB director Shalanda Young emphasized that utilizing the federal government’s purchasing power to foster economic growth in underserved communities is a central element of the president’s equity agenda. It also aligns with the administration’s broader economic strategy to bolster small businesses and enhance the resilience of the nation’s supply chains. (ibid)

The memo states that federal agencies awarded small disadvantaged businesses a record-breaking $69.9 billion in fiscal year 2022, representing 11.4% of all contracting dollars and an increase of $7.5 billion compared to the previous year. (ibid)

While agencies also set records for spending on programs designed to improve access to contracts for historically underrepresented groups and small businesses in general, they fell short of the goals for the share of contracting dollars awarded to women-owned small businesses and historically underutilized business zone (HUBzone) small businesses, according to SBA data released earlier this year. (ibid)

Young also highlighted the significance of the 8(a) Business Development program at SBA, which serves as a gateway for expanding access to federal contracts for businesses that have faced past discrimination. She emphasized the need for agencies to continue promoting contract access for HUBZone businesses, women-owned small businesses, and service-disabled veteran-owned small businesses, as these often fall under the category of small disadvantaged businesses. (ibid)

In the past, the General Services Administration and SBA announced the establishment of a pool of small disadvantaged businesses in the 8(a) program to facilitate their access to contracts under GSA’s Multiple Award Schedule Program. (ibid)

Moving forward, OMB will collaborate with SBA, the Domestic Policy Council, National Economic Council, and other entities to advance efforts aimed at diversifying the government’s supplier base. This includes the adoption of innovative acquisition practices to reduce transaction costs for small businesses. (ibid)

Are you part of a small disadvantaged business seeking additional business opportunities with the government? Give us a call.

The 2023 GUAGE Report: Illuminating GovCon Industry Best Practices

For government contracting companies, keeping pace with industry trends and best practices is crucial. How do other companies in your sector operate? What strategies lead to success? How can you ensure project success, compliance, and business growth? Fortunately, a recently unveiled report can provide the answers. (GovCon Wire September 12, 2023)

For seven consecutive years, Unanet and CohnReznick LLP have collaborated to gather insights from GovCon organizations across the industry. The result is the GAUGE Report, and the 2023 edition is now available for free download. (ibid)

Understanding the GAUGE Report

The GAUGE Report serves as an annual industry roadmap, offering benchmarks, trends, and insights tailored to GovCon companies and executives. This comprehensive guide provides a window into the current market landscape, best practices, and forecasting techniques. (ibid)

Each year, Unanet conducts surveys involving GovCon organizations of various sizes and missions. In the 2023 edition, responses from over 1,100 GovCon executives and management were analyzed to uncover prevailing trends and best practices. The report’s name is derived from an acronym representing key focus areas for government contractors: Government contract compliance, Accounting, Utilization, Growth, and Efficiencies. (ibid)

Leveraging Benchmarking and Best Practices

The GAUGE Report serves as a valuable yardstick for GovCon businesses. It allows companies to establish relevant benchmarks for evaluating their performance and progress. By comparing their practices against peers, organizations gain insights into how they measure up and where improvements may be needed. (ibid)

The report also provides an overarching view of the current GovCon market and business environment. This perspective enables companies to align their strategies with industry trends effectively. (ibid)

The Key Takeaway: Leading Through Forecasting

The central theme of the 2023 GAUGE Report is the pivotal role of accurate forecasting and planning for GovCon firms’ success. It underscores the importance of precise forecasting, resource efficiency, service/product diversity, and contract versatility. (ibid)

For small and medium-sized GovCon companies, strengthening long-term planning by investing in infrastructure, understanding their pipeline, embracing technology, and seeking expert guidance is essential. The report also highlights the significance of indirect rate and return on investment forecasting. It addresses challenges in timekeeping and billing for SMBs compared to larger revenue companies and advocates for the adoption of a formal capture process for federal proposals. (ibid)

Key Insights from the GAUGE Report

Here are some noteworthy findings from each of the GAUGE Report’s topic areas:

Government Contract Compliance

  • 51% of respondents reported stable government oversight, while 46% noted an increase in oversight in the past five years.
  • Indirect rates were identified as a common audit challenge for government contractors.
  • Business systems, particularly accounting systems, played a crucial role in winning solicitations. (ibid)

Accounting

  • The most common days sales outstanding (DSO) range among respondents was 31 to 45 days.
  • Smaller GovCon firms had shorter invoice cycles.
  • Mergers and acquisitions remained active, with 36% of respondents prioritizing M&A in 2023. (ibid)

Utilization

  • 61% of GovCon executives reported mature resource management disciplines.
  • Centralized project management offices (PMOs) gained popularity, reflecting the trend toward standardizing project management practices.
  • Projects were typically delivered on time and on budget. (ibid)

Growth

  • Personal relationships and market intel tools were the preferred avenues for discovering new opportunities.
  • Firms with a formalized capture/gate process had a competitive advantage in pursuing suitable opportunities. (ibid)

Efficiencies

  • 41% of GovCons changed their indirect rate structure in the past 12 months.
  • Fluctuating indirect costs emerged as a challenge for many firms. (ibid)

Using the GAUGE Report Findings

Understanding the latest trends in your industry is valuable, but what’s next? To capitalize on this knowledge and enhance your business:

  1. Download and Review: Access the full 2023 GAUGE Report to gain in-depth insights that can serve as a roadmap to success. The report offers a wealth of data to inform your strategies. (ibid)
  2. Benchmark and Apply: Use the GAUGE Report for benchmarking against industry standards and applying best practices. This knowledge empowers your GovCon business to excel in various areas. (ibid)

Would you like to use insights from the GAUGE Report, to gain a competitive edge and achieve higher performance? Give us a call.