The new realities affecting Federal IT also affect government’s ability to meet its basic missions. That is leading to an increased emphasis in technology for cost savings and a search for innovative new technologies overall. More importantly, though, it also is leading to a new era of how government will choose to work with the vendor community.
In the near term, the government is seeing a period of consolidation to fill out existing programs and initiatives, and existing initiatives are the most likely to see funding and to be continued. New initiatives will be difficult to find approval or to fund, even with government-wide acquisition contracts and awards.
It’s not just flat budgets that are forcing contractors – and especially technology vendors – to adjust strategies for selling into the federal market. In fact, the IT budget as it has come to be defined over the years went through the 2012 budget grinder surprisingly intact.
That said, the government is introducing a number of policies that technology companies have rarely had to contend with before. These policies include an emphasis on fixed-price contracts, with substantive changes to contractor salary reimbursement for non fixed-price contracts. What’s more, there is increased contractor responsibility for counterfeit and low-quality parts and greater accountability on behalf of contractors and subcontractors when something goes wrong.
In short, the relationship between the partner community and federal program managers has become a little more adversarial. There are fewer instances of government agencies trying to work together with systems integrators and solution providers. At the moment, we are unfortunately in an area of suspicion, and issues of debarment and contractor suspension are rife throughout the halls of Congress.
What does this mean for technology companies and solution providers? Here are some practical tips:
Make sure your house is in order. You must be constantly vigilant in your efforts to comply with the requirements of your government contracts and your partner subcontracts. You have to make sure that you respond to the policy drivers at play. Compliance is paramount here.
Understand the small business emphasis. The current administration has renewed emphasis on small and economically disadvantaged businesses. What is your play there? Do you have partners you can leverage here? If not, what can you do to get involved in that area?
Secure your supply chain. Ensure that you are confident of all of the players that you have both upstream to the OEM and downstream when working in this new environment that stresses a clean and secure supply chain to ensure that the systems and parts that end up in the government architecture are genuine.
Keep new competition rules in mind. This fiscal year we will see enforcement of new competition rules that went into effect this past May. With these rules, sales cycles are likely to get longer in instances where a product or service is not widely distributed. Many companies will not be used to this. They’ll have to become much more aware of where their capabilities fit and what the competitive environment is. What’s more, being the only company to bid on a deal is not a good thing any longer from the government’s perspective. The increased emphasis on multiple bids is likely to lead to an extension in sales cycles. The end-of-quarter deals that everyone has typically expected may now be pushed out by 30 days.
The changing economic climate is offering some important lessons for vendors, resellers, and systems integrators currently selling or planning to sell to the federal government. These stakeholders must position their sales to government as a continuation to existing mission-critical programs or objectives. They must present the benefits of technology as a means of making good on the promise of current programs and supporting operational objectives within a more austere budget framework. They must be prepared for much greater accountability throughout the contracting process – including taking ownership in contract fulfillment to an unprecedented extent.
Organizations that learn and employ these lessons are truly adopting a sound strategy to ensure successful sales to the government now and in the future.
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- Cultural Dynamics: Happy Staff, Healthy Sales
- Clarifying Cloud
- Know the Big Picture in Federal Technology Drivers
- Practical Tips for Working with Government Vendors
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- Shared Risk Takes Center Stage In Federal Policy, Channel Sales
- Strategic Partnerships – Diversify or Die
- Software Migration Simplified
- Create a Culture of Urgency
- Myths of Growth: Myth #4, Never Turn Down a Sale
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- Four Myths of Growth, Myth 3: The More Vendor Partners, the Merrier
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- Four Myths of Growth, Myth #2: High Growth Companies Need To Be Controlled From the Top
- Breaking Out of the Reseller Mold