WT Report: Government buyers balancing quality, price

Government buyers are playing a balancing act as they put a high value on the quality of the work contractors provide as well as putting a major emphasis on price, according to the findings of our latest WT Insider Report.

Our latest Washington Technology Insider Report focuses on purchasing trends for 2016, and the findings show that government buyers are looking for competing values: price and best value.

In the report – 2016 Trends in Government Purchasing – respondents rank both security and quality of their vendor above price, but not by much. Security was picked by 82 percent of respondents, quality by 80 percent, and price by 77 percent. The survey drew 704 respondents. (Updated information Oct. 20.)

That close grouping means that contractors selling to the government need to strike a balance between quality and price. One won’t necessarily trump the other.

Our Insider Reports are produced for our WT Insider members. Click here to get more information on becoming a member. If you are already a member, click here to read the entire report.

Another critical finding of the report is that the mood is still somber, but there are indications we have hit bottom.

When we compared this report to last year’s purchasing study, we find that only 20 percent of respondents expect spending to go down, while last year 34 percent expected a decrease.

Thirty percent expected to spend more in 2016, compared to 25 percent who expected to spend more in 2015.

It’s not a huge shift, but it is a move in a positive direction.

We also break down the contracts defense and civilian agency buyers said they expect to use in the coming year. Topping the list of defense contracts are a pair of Army vehicles – ITES-2S/ITES-2H and AMDC-2.

On the civilian side, we had a tie: GSA OASIS and NASA SEWP IV were picked most often, followed closely by GSA Alliant and Alliant Small Business.

If you are a services provider, there are four things that buyers are looking for more than half of the time: flexibility (picked by 68 percent of respondents), experience (61 percent), contracts (58 percent), and relationships (54 percent).

While not the top pick, the fact that contracts was picked by so many respondents underscores the pressure contractors are under to get on the right vehicles because if you don’t, your competitiveness takes a hit.

The report also dives into the nine important spending categories including software, infrastructure, cybersecurity, cloud computing and virtualization.

For each, we break down specific buying plans, which will give you a deeper understanding of what customers are looking for.

We also saw that the interaction between government and industry remains limited. This trend has been a factor and a challenge for several years now.

Forty-one percent of civilian respondents this year, compared to 42 percent last year, said they face restrictions when trying to meet with companies. But there was drastic improvement on the defense side where 32 percent said they faced restrictions, compared to 47 percent who last year said they faced restrictions.

So, it is a mixed bag, and it shows the need to continue to work with customers and educate them on what is allowable. The sense we’ve gotten is that the restrictions often aren’t specified in regulations and are driven more by tradition and by a lack of experience on the government’s side.

Again, this report was produced for our WT Insider members as one of the benefits of their membership.

Let us know if you have any questions or suggestions at nwakeman@washingtontechnology.com.

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