Some issues to watch in the government market

New priorities and initiatives come along with a new administration. For some critical issues, such as outsourcing and budget constraints, the real impact will not be known for several years.

Later this week, I’ll be introducing David Drabkin of the General Services Administration at the American Small Business Coalition event.

In addition to doing the introduction, Guy Timberlake, who leads ASBC, asked me to talk for about five minutes on what the leading issues of the day are.

Luckily, this morning I attended a Houlihan Lokey event that featured Stan Soloway of the Professional Services Council as well as Jerry Grossman, Anita Antenucci and Jean Stack, all of Houlihan.

One takeaway from the Houlihan event was that while there are several looming issues, such as the administration’s new priorities, greater scrutiny of contractors and budget cuts and huge deficits, the impact of these and other issues are still to be sorted out.

In other words, it is just too early to tell yet. And that’s probably what I’ll use my five minutes explaining on Thursday.

One example of a too early to tell topic is insourcing — where the government takes back jobs that it has outsourced to contractors.

Several question remain unanswered here. First, is it a good idea? Second, does the government have the capability to take back some of these jobs?

The government can’t flip a switch and take these jobs back in-house.

Another issue to follow is the impact of the proposed defense budget cuts. Defense Secretary Robert Gates might want to make these cuts, but there are a lot of jobs in a lot of congressional districts that are tied to these big programs.

But even if Congress goes along with his proposal, it is as much about shifting priorities as it is cutting spending. It is important to track those changes. He wants to spend more on things like unmanned aerial vehicles, cybersecurity and special operations, to name a few.

A third issue — and one that looms large over everyone — is the budget deficit. It is counted in the trillions now, and it won’t go down in a hurry.

What this means is that some priorities won’t get funded or won’t even get started. You need to follow the priorities that will get funding and build your business around that.

That in a nutshell is what I’ll talk about Thursday. If you have any suggestions, let me know.

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