Federal Contracting Trends for 2018

The Federal budget for the fiscal year 2018 was estimated to be 4.1 trillion dollars. As the budget has increased, it’s expected for the government contracting to increase as well. In addition to this, there have been identified some essential federal contracting trends. Business development and capture managers should be aware the novelties in order to develop effective business strategies.

Contract consolidation through category management

The stimulus provided by Obama administration for category management trend continues. But what will the Government do about implementing best practices to use the acquisition contracts and the Federal Supply Schedules to award single awards and make sure they’ll benefit from it? I believe this remains to be seen in the coming months.

Compliance and accountability 

Just like the last year, in FY 2018 is expected for the federal agencies to increase compliance standards and accountability for contractors.  They are obliged to bring various data on a monthly report form. In this way, the federal agency will have access to the work process and will track the progress. This trend will continue following the transactional data reporting rule.

Win Rate Decrease

Government Contractors must be careful when establishing a price to win. Federal Agencies are looking to save their finances, and most of the awards are being made upon the best price criteria. This may have many consequences especially in terms of quality service. Decision makers will not give priority to the best value solution, as it has traditionally been done in the previous year. This way, many prestigious companies that provide top quality services, or products, risk to not winning lucrative federal procurements; therefore, their win rate will decrease.

Simplified Acquisition Procedures

The program designed to help underrepresented small businesses compete for federal contracts will continue to be a trend this year. New reforms are continually being made by the Progress to simplify the procedures of certification and competition for businesses that fall under this category. The program helps SBs reach more easily procurement officers in order to advantage competition.

Contractors will merge and restructure

Another trend for this year is the merging and restructuring of federal contractors. In order to reduce costs and follow industry changes, many diversified and established contractors will breakdown larger-margin units into smaller-margin units working on weapon systems. Also, many large and medium companies will merge, restructure and consolidate. This strategy will be used so that the internal teams will be more reorganized and expenses will decreased.