We are all prognosticators, and advice has always been easy and cheap, indicating that often it of little value. Nonetheless, there are trends in Federal contracting that do point to several clear-cut winning proposal strategies in 2016.
My advice, inexpensive as it is, comes from the January 2016 “Practitioner Perspectives” of Wolf Den Associates in McLean, Virginia, which I find convincing and compelling.
According to Wolf Den Associates, the single most important fact about Federal proposals in 2016 is that the Federal budget is increasing, if at all, very modestly. This simple fact has significant implications for proposal development:
• One important way to grow your company’s is to keep your Federal contracts. Therefore, outstanding performance and efficiency are even more important than in the past.
• At the same time, incumbents are very vulnerable because the Federal Government knows that bidders are very likely to keep the best performing staff. As a result, transition is less of a risk than in the past.
• The number of bidders on Federal competitions has declined in recent years, but bidders in general have become more capable because of the growing emphasis on price-to-win and on Lowest Priced Technically Acceptable (LPTA) procurements.
• Bigger is not always better. The Top 50 companies have experienced a slight decline in their market share of Federal contracts from FY 2014 to FY 2015. Nimbler competitors who can offer cost savings and other benefits can sometimes outbid large incumbents.
Federal Agencies are under intense pressure because of hiring freezes and stagnating budgets to do more with less. The results are obvious to everyone in Federal bids and proposals – Agencies are passing the burden of risk onto contractors and expecting gains in efficiency and lower operating costs over the life of a contract.
Federal bidders are likely to keep more of their Federal contracts and win new ones if they can convince Government Agencies that they are better, faster, and cheaper. This approach may not always be realistic, but it does have important implications both for incumbents and challengers. Of course, Federal bidders must focus on the Federal budget, but they should worry more about the competition.