COMMENTARY
Pick up your homework assignments for the end of 2012
Contractors have extra homework this season. A higher-than-normal degree of uncertainty hangs over the federal budget. That, combined with the need to understand the practical effects of a barrage of policy initiatives, makes for a tricky fourth quarter sales situation.
Homework assignment one: Contractors need to be busy helping their customers obligate those still-available 2012 dollars. But only 2012 dollars, lest the agency commit to what it subsequently can’t pay for. That also opens contractors to the risk of reporting sales they will have to rescind later.
Not surprisingly, no one really knows at this point how Congress will resolve the 2013 budgets. 2012 being an election year, it would be optimistic beyond reason to expect Congress to reach any compromises on the budget until the so-called lame duck session between the election and the start of the subsequent session.
Agencies know what they asked for, and what made it into the President’s request back in February. Now, federal customers are in the midst of 2014 budget preparation and dealing with OMB’s guidance to reduce budgets even further. They must presume a reasonably accurate picture of what will happen in 2013 if 2014 plans are to have any coherence.
Homework assignment two: Revisit 2013 budget documents agency-by-agency. The best opportunities for sales lie with strategic initiatives having two characteristics: One, they are midway through development and therefore stand the best chance of continuance and two, they have survived TechStat reviews aimed at killing off exceptionally late or over-budget projects.
The last 18 months have brought profound changes in how the government buys IT. These changes flow in two basic streams statutory-regulatory and Office of Management and Budget (OMB) policy.
Many of the IT policy changes were proposed under the former federal CIO, Vivek Kundra, but sharpened and more specifically stated by his successor, Steven VanRoekel. They try to get the government’s approaches to IT more in line with realities in the commercial world, where budget and new technology pressures are equally strong.
In a nutshell, these policies aim to reduce operating and maintenance expenditures, speed application development, and get agencies to share services. They are detailed in a series of evolving policy papers covering cloud computing, shared services, mobility and digital government. The first document animating all of these policies is the 25-point IT reform dating from December 2010. Together, this canon deserves your fresh look (www.cio.gov) because it gives technology sellers a framework in which to make their case to busy federal customers.
Homework assignment 3: Re-read these documents and prepare to map pitches against them. Government IT buying is changing fundamentally. We believe these changes are inevitable, even if a subsequent administration were to rename and recast them.
Statutory and regulatory procurement changes have occurred in a much more scattered and haphazard way. Between Congress and the Office of Federal Procurement Policy, contractors face adjustments in pre-solicitation communications (looser), supply chain management and counterfeit goods (tighter), suspension and department (tougher), small/disadvantaged business contracting (bigger), commodity IT purchases and strategic sourcing (more) and time plus material contracts (less).
Contractors need to keep in mind that customers are peering back at them through the same kaleidoscope of policies.
Which brings me to homework assignment 4. In this complicated season, contractor business development and sales staff should schedule deep listening sessions with their most important customers and prospects. Simply hear them out on their plans and frustrations. Just this once, refrain from talking about your products and services. Plan to come away with fresh insight into challenges the government faces. Use this information to plan your approaches to 2014.