2017 Government Bidding Trends
We are now in Q2 of the fiscal 2017 Government bidding arena. As we move into the year 2017, the pace of contracting will pick up to reach over 40% during Q4. Many analysts predict that government contracting is going to increase in fiscal 2017; in fact, total potential small-business contract values will exceed $230 billion.
Below, I have listed a few trends that I expected to see in the next three quarters, and we should all, small and large business, be aware of and consider their effects in our 2017 strategies:
- Shifting to a smaller number of Multiple-Award Contracts (MACs) has been seen in the IT market, and this is going to be the case for many other markets too.
- Spending on Simplified Acquisition Procedures (SAP) has grown, and agencies are going to use SAP procedures to avoid protest delays now that the threshold amount has been revised.
- Competition on DoD contracts is expected to be on the decline.
- Agency budgets for contracting are flat or shrinking. Consequently, I think we are going to see a trend towards bid pricing becoming a more important factor than technical proficiency.
- Spending in IT is going to go up or at least remain flat, but architecture, engineering, and construction are going to go down (note that this is in Federal contracts and not in the private sector in which construction spending is on the rise).
- Sole source awards are going to decline.
- The Fed’s Small Business Set-aside program is expected to grow
- IT modernization and category management are the next big federal opportunities. 77.7% of agency IT budgets in fiscal 2017 are to be allocated for modernization of legacy systems.
- I expect that the use of Least Price Technically Acceptable (LPTA) bids is going to decrease as opposed to best value, especially in service contract bids, similar to last year.
With the new administration taking over, we should be seeing even newer trends popping out during 2017 to the surprise of many. What is important is to incorporate the consequences of such trends into your bidding strategy.