Bridged Design offers some thoughts in a recent blog post on the “dreaded beast” stomping its way towards our federal spending budget. With an ETA of March 1st the sound of approaching footsteps has everyone on edge. How will the masses react when they can actually see this sequestration? Spring time may have to be placed on hold for a spell….
Preparing for Sequestration
As happy as I am to see the calendar flip from February to March, my reasons are solely based on the arrival of meteorological spring. March in the nation’s capital is generally peppered with a few 60-70 degree days, a welcomed reprieve from the winter chill. The forecast for weather in DC is certainly more appealing than the forecast for the GovCon industry in that same timeframe. It’s about to get cold up in here!
More than just the weather will be changing in March, as that dreaded beast, sequestration, lays the hammer down in DC. Slated to take effect March 1st, the federal wallet is about to be a little lighter—$85 billion dollars lighter. Enacted as a fail-safe to the Budget Control Act of 2007, sequestration was never meant to be this real. It was essentially fear mongering; a process so undesirable, lawmakers assumed we would have a solution in place before it ever became a reality. They were wrong. While all federal agencies will feel the pinch, half of the spending cuts fall square on the chin of the defense budget, leaving the contractors who service them to fear the worst.
What GovCon Can Do
- Be current. Future procurement, or the lack thereof, may be at the forefront of most contractor’s minds, but don’t lose sight of current contracts. If cuts need to be made, they’ll happen, and loopholes will be found to do it. Have your house in order. Reassess any and all contractual weaknesses, including performance and milestones, to best avoid default. Everyone’s leash is getting shorter.
- Be proactive*. Cuts are already happening, a sad reality to newly unemployed contractors who’s firms are scrambling to prepare for the tightened budget. At times like this, it may seem illogical to fill business development support positions, which are vital to procurement. Consider outsourcing to professional consulting firms on an as-needed basis for support functions such as capture, proposal development and proposal production. While it’s important to save money, it’s also critical to stand out and leverage every possible advantage in this new and ultracompetitive market.
- Be prepared. Business could get slow. Consider reviewing your portfolio and determine which services or products make the most sense for this new contracting landscape. Consider narrowing your scope to a handful of services and prove why you excel at them. Diversification for the sake of throwing a large net can be a recipe for starvation. Define what makes you valuable and focus on demonstrating why.
If there is any good news to be had, it’s that sequestration is being talked about and a solution is always a vote away. If it’s effects are as damaging as some forecast it to be, the process is ultimately reversible. As much as the GovCon industry hates to see this route taken, I think we all understand why—it’s the “how” that has left many scratching their heads. We’ll all learn a lot in the coming weeks, good or bad. But hey, at least the weather will be a little nicer.