If you are new to federal government contracting, you may not know that the highest percentage of awards occur in the last quarter of the fiscal year. In 2022, the three-month period of July – September totaled 34.45% of the annual spending. In September alone, spending spikes accounted for 6-8% of the yearly agency expenditures. These spikes occur because agencies have remaining funds they must spend, leading to this massive spending spree. They do not want to return unused funds to the treasury as their budget may be reduced in the next fiscal year, hence the term “use it or lose it!” Knowing these spikes will occur allows contractors to develop capture strategies for end-of-year spending sprees.
Compiled by Jeff Cuskey: Strategies to Capture Expiring Funds & Sole Source Contracts – 8 August 2023
You must take action now to prepare for the next fiscal year’s last quarter. The end of the fiscal year is too late to establish the knowledge and relationships you need to be successful; start this September to have a winning future fiscal year. Below are some steps to establish and maintain your place in government contracting and make sure your company is ready to capture this spending next year.
Data Mining for Agencies
Data mining for the agencies that buy what you sell should be one of your first actions when entering the federal contracting arena. By targeting the agencies that acquire your goods and services in significant amounts, you can concentrate your efforts. One of the best free sites for data mining is USASpending. Multiple search criteria on USASpending will help you narrow down the agencies to target. The best way to search is to select the last few fiscal years, add your NAICS, and add a keyword that will narrow the search to your particular area within the NAICS. You’ll want to download the search results into Excel format to perform additional data mining to get your list of preferred agencies. Making data mining a recurring September process will keep you on top of the spending data and direct your future marketing and capture strategies.
Tailored Capabilities Statements and Contacting the Agency’s Office of Small & Disadvantaged Business Utilization (OSDBU)
Once you have your list of preferred agencies, you’ll want to prepare a tailored capabilities statement for each one. Review each agency’s website to understand their mission and needs. Then, craft narratives in your capabilities statements on how your products or services can enhance their mission or solve a problem they have. One note about capabilities statements: Focus on your business capabilities—do not focus on your certifications. Being certified is a bonus, but that is not what agencies want to hear about. They want to know what your business offers and how it can advance their mission or solve a problem they are facing. Remember, your value as a business is not your socio-economic certifications, it’s how your product or service can help them!
The next step is to email your tailored capabilities statements to the OSDBU of each agency and request an appointment to discuss the merits of your products or services with them. At the end of the conversation, ask them if they can refer you to other points of contacts within the agency that would benefit from your products or services. A list of OSDBU websites is located at acquisition.gov.
Find Expiring Contracts
Most recurring product or service contracts are awarded as multi-year contracts in the form of a base year + four option years, a.k.a a five-year contract. These kinds of awards eliminate having to solicit annually for the same supply or service needed continually. Five years is the limit on these contracts, based on federal acquisition regulations (FAR), but these contracts are ultimately based on agency needs; if the product or service is no longer required or the incumbent contractor performs below standards, the option years do not have to be exercised.
When considering your strategy for the fiscal year, you will want to find contracts expiring that year and even the next fiscal year. You’ll want to know the date it will expire, the incumbent contractor, the awarded amount, and, if possible, obtain the solicitation number and find the notice in the SAM archives. The original solicitation notice should include details or attachments to help you prepare for the following solicitation. Agencies typically solicit at least six months before the contract’s end date, but a shorter period may occur. You can find a point of contact for the previously awarded contract in the last modification to the contract, found in the Federal Procurement Data System (FPDS.gov), and inquire about when the new solicitation might be posted to SAM.gov.
To find the expiring contracts, you’ll want to run a report similar to the report you pulled from USASpending.gov during data mining. Here is an example of a search on NAICS code 541620 – Environmental Consulting Services. Select FY2019, Contracts & IDVs, and NAICS code. You can also include a keyword for your business, as you did in the data mining search. The year 2019 should yield you results of contracts that will be expiring in 2024. Indefinite Delivery Vehicles (IDVs) are contracts for supplies or services when the delivery or quantity is unknown, also known as IDIQs. Once you have an IDIQ, the government can issue a delivery order directly to you for the known delivery date and the quantity without going through the solicitation process.
Forecast of Opportunities
By October 1 of each fiscal year, federal agencies must post contract opportunities exceeding the simplified acquisition threshold (currently $250,000) which can, or will be, set aside for small businesses and socio-economic programs. This forecast allows small businesses to plan and prepare for upcoming solicitations. The posted opportunities are what an agency intends to acquire over that fiscal year. However, priorities and funding may change, which could cause the requirement to be canceled for that fiscal year.
Posted opportunities describe the requirement, the magnitude of the effort, the FY Quarter for solicitation release, the proposed set-aside, and points of contact. The posted opportunity should have enough detail to determine if it is a contract that your company should pursue. This is also the time to reach out to the point of contact to learn more about the requirements and conduct market research to review the requirement history, incumbent contractor, and other details needed to prepare a winning proposal. The Forecast of Contracting Opportunities by Federal Agency is available at acquisition.gov.
Another way to build relationships with your preferred agencies is by networking. Common networking opportunities include attending industry days, small business expos, or conferences so make sure you sign up for any chance to meet with the government and promote yourself. If they have one-on-one or match-making sessions, sign up for those too! You’ll want to tailor your capabilities statement for each of these events and remember to tell the agency how your products or services can help them succeed with their mission. These events are prime opportunities to market yourself and build a network within the government agencies you want to contract with. These meetings may be posted on SAM.gov or the agency website or even on resource center event calendars, like Norcal APEX Accelerator’s calendar. You can also network with prime contractors who can give you entrée to the government. Find out who the large primes are in your industry and look for subcontracting, mentor-protégée, or joint venture opportunities.
September is the best time to start data mining for agencies, expiring contracts, and forecasted opportunities and using that information is crucial to tailoring your capabilities statements for marketing in the next fiscal year. You’ll want to wait until October to contact the agency’s OSDBU or Small Business Specialist, as the end of the fiscal year is usually a frenzy of buying with little time to think about meeting new businesses. You don’t want your email to get lost in their inbox! Be persistent but not overbearing when you contact or meet with government representatives; being courteous and understanding of their time will get you further than you know. The same principle holds when you are attending a government event; have your capabilities statement and 40-second pitch ready, and be sure to follow up after the event to thank them for their time and consideration. The effort you put in now by following the advice in this article, either on your own or with assistance from your APEX Accelerator counselor, will set you up for success in the next fiscal year and beyond.
If you are looking for help with government contracting or want no-cost help to find contracting opportunities, please contact your Norcal APEX Accelerator/ PTAC counselor for assistance or apply for services today!
If you have more questions, please contact us at email@example.com or 707.267.7561
Authored by: Nanci R. Pigeon, Norcal APEX Accelerator Procurement Specialist