2021 Wash100 Award recipient and GovCon Expert Kevin Plexico used his first article for the program to shine a light on the major improvements that government contractors and their respective organizations have made to combat the effects of the COVID-19 pandemic and the ever-evolving federal landscape.
Plexico reveals the reasons why government contractors have become smarter and more efficient while also finding new opportunities for growth to find greater success for the rest of 2021, into 2022 and beyond.
After you’ve had the chance to read his first GovCon Expert article, visit ExecutiveBiz to read Plexico’s thoughts regarding the impact the cancellation will have across the federal landscape, the positive developments and future opportunities for cloud services in an exclusive Q&A session.
You can read Kevin Plexico’s latest GovCon Expert article below:
Why Government Contracting Companies Should Be Confident About 2021
By Deltek’s Kevin Plexico
The last 15 months have changed how so many of us work on a daily basis. And while change is challenging, we have also seen some great productivity and efficiency emerge. I don’t think companies are going to “return to normal” post-pandemic, but rather move towards a “better normal.” This means pulling from the best of what came out of those challenging times.
Within the landscape of government contracting, we have seen some businesses leveraging the wealth of opportunities that emerged to assist government entities throughout the pandemic. We also saw businesses leveraging digital solutions to source teaming partners when face-to-face events were shelved.
Government contractors, like many different types of businesses, were nothing less than resilient and are giving me good reason to have a high degree of confidence in government contracting for the remainder of 2021 and beyond.
My optimism is supported by the findings of Deltek’s 12th Annual Government Contracting Industry Study, which surveyed hundreds of industry leaders to identify current contracting trends and market outlooks.
Our annual report serves as a unique, trusted resource that helps performance-minded businesses gain more operational efficiency and effectiveness, set realistic business goals, build a better business development strategy and understand how to get a leg up on the competition.
What stood out most to me from this year’s study was the degree of confidence that business development professionals have in their prospects for the year ahead. A full 70 percent of respondents to our GovCon Clarity survey believe that government sales will improve, year-over-year, in 2021.
Here are three reasons I believe are behind this increasingly positive view: Contractors are getting better at finding efficiencies, they’re finding more creative ways to source opportunities, and the fact that both federal and state, local and education (SLED) sectors are seeing significant signs of growth.
1) Government Contractors Have Gotten Smarter and More Efficient
Contractors are under constant pressure to do more with less. In our Clarity Study, we asked respondents about their top business development (BD) challenges and gave them ten options to choose from. A full 54 percent of respondents indicated that “limited business development resources” was one of their top three challenges, with 19 percent of those listed it as their top challenge – by far the most common problem faced.
With that said, about 57 percent of business expect to invest more in their BD plans in 2021. This was led by large businesses, with nearly three quarters of those surveyed expecting to increase their investment. But not all businesses have the resources to simply ramp up BD spending, and for those smaller businesses, they are taking measures to creatively do more with what they have.
Among the ways contractors have accomplished this include relying on solutions rather than events to source teaming partners to maximize the mix of capabilities offered, expanding market coverage and diversifying into other agencies, and maximizing revenue and profit from existing contracts. All of these methods open more avenues for contractors to grow, which leads to this second point…
2) Businesses are Finding New Ways to Find New Opportunities
Government contractors are leveraging digital solutions to find best-fit opportunities for growth when their otherwise face-to-face approaches were stalled due to the pandemic. Responses to the Clarity survey provide an indication of how businesses will be developing sales opportunities in the near future. The top three sources to identify new opportunities were listed as “active client relationships,” “teaming partners/networking” and “requests for proposals/requests for qualifications.”
But more modern, digitally savvy methods are gaining in prominence. More respondents cited “market intelligence databases” as a source of business leads and advance pre-RFP notification than “industry conferences and events.” The resilience of government contractors to lean into digital solutions and team in a virtual world will continue to pay forward as I think the economics are in favor of this trend continuing.
3) Both Federal and SLED Sales are Expected to Grow
The Clarity Study also found that the expectation for growth opportunities wasn’t just limited to one or two segments. Companies expect significant growth in the next 18 months, with particular emphasis on the professional services, aerospace and defense, healthcare, and architecture and engineering industries. And this holds true at all levels of government.
The expectation for sales in the federal government market is high, with 35 percent of those surveyed expecting federal sales to grow significantly and another 46 percent expecting them to grow somewhat – meaning four out of five respondents believe 2021 will bring growth in federal sales.
Similarly, state, local, and education (SLED) markets are expected to benefit from the recently enacted stimulus, among other programs, with 25 percent projecting significant growth and another 42 percent expecting some growth.
Government Contracting Companies Know the Steps to Succeed in 2021 Business Development
While I do see growth in our future, I don’t think it comes without its challenges. With more businesses fighting for the same contracts, the changes in business operations forced by the continual response to – and recovery from – the pandemic, and a host of other factors, businesses will need to continue to be nimble to remain competitive.
I have seen savvy contractors know the importance of embracing the digital world when it comes to teaming or sourcing new opportunities. They understand how to diversify their reach and know that valuable opportunities can be found in the state, local and education market as well as from federal agencies.
And they can be sure that many traditional strengths – like leveraging existing customer relationships and possessing deep experience with the government contracting world – will still go a long way. Remembering all of these lessons, leveraging the good that came out of the pandemic and aiming for a “better normal” will position government contractors for growth in 2021.