The economy is expected to contract in the near future, and that can mean fewer business development opportunities in 2023, but what does that mean for government contractors? Typically, businesses that rely heavily on government contracts perform better during a recession than businesses with a commercial focus. This is likely to continue in 2023 as projects stemming from the recent infrastructure bills (the Infrastructure Investment and Jobs Act and the Inflation Reduction Act of 2022) begin to ramp up. Good news for government contractors! Still, uncertainty is the only certainty in 2023, so let’s take a look at what steps state, local, and federal contractors can take to futureproof their businesses in 2023.
10 Steps to Futureproof Your Government Contracting Business
1. Be Nimble
With the uncertain business environment, it’s more important than ever to have a flexible and adaptable approach to operations and decision-making. This includes being open to new ideas and technologies, having a clear understanding of market trends and customer needs, and being able to pivot quickly. Creating an agile firm will require leadership to have visibility into project profitability, resourcing, and pipeline – so they can quickly jump on opportunities as they arise.
2. Ensure Solid Cash Flow
An essential aspect of staying agile is ensuring that your firm has a solid cash flow. Take the time now to identify unnecessary spending. Aim to have a 6-12 month cash runway and stay on top of invoice collections. The proper cash flow will ensure you can weather any downside in the economy while having enough resources on-hand to take advantage of opportunities in the market.
3. Invest in Technology & Automation
Investing in technology and automation can help you streamline your processes, increase efficiency, and improve your chances of winning contracts. You may consider implementing an Enterprise Resource Planning (ERP) or Professional Services Automation (PSA) system. While there are upfront costs associated with the licensing and implementation, long-term benefits include improved cash flow and invoicing, improved resource allocation, and visibility into project and company profitably.
4. Consider Outsourcing
In keeping with step #1 (staying nimble), consider Outsourcing instead of hiring more full-time employees. Outsourcing can easily meet variable capacity and give you additional access to skills and resources while allowing you to focus on your core competencies. Outsourcing can be particularly pertinent after securing a large contract. You might not have internal resources, so finding a partner who can help provide surge support to help you quickly identify, screen, and submit qualified candidates is a must.
5. Stay up to Date on Industry Trends & Regulations
Make sure you are aware of any changes or updates to the laws and regulations that govern government contracting and any emerging industry trends. You are likely already familiar with FAR (Federal Acquisition Regulations) and (FASA) Federal Acquisition Streamlining Act. However, numerous other laws impact government contracting, and regulations are constantly updated. Make sure you have experts within your organization, and if not, make sure you have a good partner helping you.
6. Be a Relationship Builder
In the spirit of partnership (above), ensure you are building relationships with key decision-makers in government agencies, as that will be crucial for success in the government contracting industry. Attend industry conferences and events, and make sure to have a strong online presence to make it easy for potential clients to find and contact you. Look for partners who understand the industry. The right businesses can help you expand your capabilities and increase your chances of winning contracts.
7. Find your Niche
It seems counter-intuitive, but according to the latest findings from The Hinge Research Institute, firms with a smaller number of customers are actually more profitable. That is because they are laser-focused on finding and serving their niche. As a result, they don’t waste time pursuing difficult or unprofitable projects. Clients come to them because they have a proven ability to deliver. Government agencies often have specific needs, and contractors that can demonstrate expertise in a particular area are more likely to be successful. Consider specializing in a specific industry or service, and make sure to highlight your expertise in your marketing materials.
8. Focus on Exceptional Customer Service
Once you have identified your niche, focus on quality and customer service. Providing high-quality products and services, as well as excellent customer service, will help you maintain positive relationships with government agencies and increase your chances of winning repeat business. Reputation and word of mouth go a long way in the Govcon community.
Protip: Get feedback during the project. Too often, firms hold lessons-learned sessions with a customer at the end of a project. Instead, make sure to hold these sessions multiple times throughout the project lifecycle. Your clients will appreciate the opportunity to be heard, and you can apply what you learn during the contract (instead of at future projects). Get more customer service tips here.
9. The Importance of Cybersecurity
With cyber-attacks on the rise, government agencies are taking cybersecurity very seriously. Make sure that your business has robust cybersecurity measures in place, and be prepared to demonstrate how you will protect sensitive government data. Some of the most important cyber regulations for government contractors are listed here:
- Federal Information Security Modernization Act (FISMA)
- FAR 52.204-21
- DOD Defense Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012
- NIST 800-171; Migration to CMMC (2.0)
Read more information on cybersecurity requirements for government contractors here.
10. Continuously look for new opportunities:
Finally, like any other business, government contractors need to keep an eye out for new opportunities. There are a number of tools you can use to help you find and bid on contracts, projects, or expansions by government agencies. A few of the more common tools include:
By following these secrets, government contractors can position themselves as attractive partners to government agencies, increase their chances of winning contracts, and ultimately grow their business.
And Speaking of Supporting Government Contracting…
Blu Omega provides support for government contractors of all sizes. Our scope of services includes post-award surge support, proposal support, and key personnel staffing. We have a proven staff with an extensive history of supporting federal & commercial customers. For more information, please contact Blu Omega here.
Comments are closed