Identifying and Capturing Government Year-end Dollars

The U.S. federal government mapped out a $5+ trillion budget for the Government Fiscal Year (GFY) 2010. Yes - more than $5 trillion. That number includes all government spending, from military salaries to grants to servicing our national debt.

Of that $5 trillion, $756 billion was contractor addressable; money available to pay government contractors for existing and new work. Tha-s where you come in. Of that $756 billion, the government still has $114 billion of-expiring fund' left to spend before September 30, 2010.

All this number crunching and analysis comes from my compan's own Ray Bjorklund, who I have mentioned in previous posts. As Chief Knowledge Officer at FedSources, Ray takes thousands of lines of federal budget information, digests it and dissects it, and comes up with a complete rundown' industry by industry and sector by sector' of how much money the government has available to spend on federal contracts.

Most recently, Ray mapped out how much money the government has left to spend, which agencies have the most (and the least), and what kinds of services and products the government will most likely be looking to buy in this fourth fiscal quarter.

Buying Trends

Government tends to buy different things depending on where agencies are in the fiscal cycle.

According to historical government spending patterns, Q1 spending is often focused on'stocking u' on things like office supplies. Complex projects happen at the tail end of the first quarter or the beginning of the second quarter. Q3 is generally the slowest buying quarter.

Buying usually picks up significantly in the fourth quarter. And, based on historical data, this end-of-year (EOY) spending is highly commodity-oriented. In other words, if yo're selling to the government in Q4' specifically within the next 30 days - be prepared for a commodity play.

Another part of understanding what the government buys and when is understanding the PALT requirements of the agency you're targeting. PALT is an agency's Procurement Acquisition/Administrative/Action Lead Time.

Each service or product you're selling has agency requirements - or, at the least, preferences - for acquisition lead-time. Some agencies don't want to, or cannot, enter into complex contracts too far into the third quarter. Each agency will be different in its requirements and preferences. It is important to be in synch with your prospective customer before you start your selling process.

Agency Dollars - Who has What?

Here is where Ray's research gets juicy. He has gone through and determined which agencies have the most - and least - left to spend.

The Army, Air Force, and Navy still have $40 billion, $22.9 billion, and more than $10 billion respectively left to spend before September 30.

The Department of Commerce has the greatest percentage of expiring funds left to spend, while the Department of Labor and the Small Business Administration (SBA) have the smallest percentage. The Department of Energy has a relatively low level to spend by EOY because their authority to spend appropriations often spans more than one year.

Here are a handful of additional agencies, and the expiring funds each has left to spend:

• Department of Veterans Affairs (VA) - $5.907 billion
• Department of Health and Human Services (HHS) - $2.451 billion
• Department of Homeland Security (DHS) - $2.393 billion
• Department of Justice (DOJ) - $1.619 billion
• Social Security Administration (SSA) - $1.074 billion
• Department of Transportation (DOT) - $1.063 billion

Conclusion

One of the most effective ways of being in the right place at the right time - and securing government funds - is understanding government spending patterns. Different services and products have different cycle timing for spending.

There are two timing factors involved: the acquisition lead-time of the service or product you're selling, and the type of service or product you're selling as it relates to government buying cycles.

Pay attention to both of these. Remember, there is a lot of money out there to be won. This is big business!

Additional Resources

• The ABCs of Government Contracting: Understanding the Acronyms
• Finding Government Business: Once You've Done the Basics, Here's What's Next
• Uncovering the Government's Hidden Treasure
• Understanding the 2011 Federal Budget and what it means for small businesses
• Help for Small Businesses Looking for Government Contracts
• Government Contracting: Explaining the Process in 5 Steps

Bill Gormley is president and CEO of Washington Management Group and FedSources, chairman of the Coalition for Government Procurement, and Director at the Procurement Round Table.