I am not telling you anything new when I say that competition has always been tough when it comes to winning government contracts, but the competition will be even tougher in 2012! Let’s take a look at what the new landscape looks like this (election) year.
We have a massive deficit that MUST be reduced. MUST! Basically everyone agrees that is the case and the right thing to do, but how?! The easy place to start is with the biggest budget. That would be the DoD, who has the largest budget by far and spends more money than anybody. In fact, during the State of the Union address last night, there was mention of the amount of savings (lower spending) the DoD would have over the next few years as we take more diplomatic approaches and make our military leaner and more efficient (in mission and in energy apparently). Many (most) contractors have a portion of their business tied to the cash cow that is… nay was… DoD.
DoD is just the biggest. All federal agencies will be feeling the pressure from taxpayers and representatives to decrease spending and increase efficiency and become the government of Abraham Lincoln’s vision that “should do for people only what they cannot do better by themselves, and no more.” What this means is that everyone doing business with a federal agency needs to sharpen their pencils, restructure supplier pricing and payment agreements, and potentially settle for lower profit margins (in addition to other things).
Also, consider that when portions or entire revenue streams dry up for larger contractors, there will be a push and a desire to pair up with set-asides to make up for losses. The entire Small Business community, especially the Veteran-Owned Small-Business and minority-owned communities are susceptible to exploitation (or appreciation and development). I mention the VOSB specifically because of the number of veterans returning from the battlefield that will be looking for work. These men and women could fall into the trap and promise of “easy earnings” from a larger contractor looking to cash in through a “partnership.”
I have seen many instances as I have audited and consulted with government contractors (not at the same time) where big business have successfully taken advantage of the Small Business community through loopholes and outright abuse of the procurement system. The holes haven’t been closed and Small Businesses have been taken for a ride of millions and possibly even billions of dollars.
I see a need for the Small Business community to work together more than ever in 2012. Get ready, the pressure and competition for Small Business contract dollars will get tougher still. Get the tools you need to stay ahead of the game and more efficient and effective in a constricting industry.