Last time we talked about watching for increases and decreases in government agency budgets, and we had some charts on 2017 agency IT budgets. What was more significant was the discussion on how these changes impact the competitive landscape and what that means to you when deciding where to spend your business development dollars.
Understanding the budget is a starting point, but for a Small Business there is more you can learn from studying agency buying patterns. Don't just trust someone who tells you some agency is small business friendly - that is not enough information to bet your future on. Let's look at some additional information that can help you choose which agencies to pursue.
This is actually a complicated question, because ideally you want to go where you will have the greatest number of opportunities. This maximizes the leverage you get from your investment. The research to determine who has the largest opportunity pipeline for you can be a lot of work. But just to point out why homework is important, let's look at a few simpler numbers. Two sets of numbers to be specific. 1) the percentage of contract dollars that goes to small business, which will include subcontracting by large business too small companies, and 2) the percentage of contract dollars that goes to small business set-aside procurement, which represents the opportunity pipeline for small business to participate as a prime contractor. For this example, we will look at two agencies - Treasury and Justice and we will examine the spend for only their largest 5 budget accounts in FY2013.
Now, there is a great deal more information, even on just these two breakdowns, but we want to keep it simple here to make a point. If you wanted to pursue a new agency, and your primary need was to get a prime contract, you would probably go after Justice, where 17% of prime contract dollars are related to set-asides, even though Treasury appears to be more small business friendly in terms of % of total spend.
At this point, we might want to ask another question. How many individual procurement transactions make up the Treasury 10% set-asides vs. the Justice 17% set-asides? What if we find out now that Treasury did more individual set-aside procurements, even though they added up to fewer dollars. Now which agency do we target? (Keep in mind we are talking here about percentages only, not actual dollars - so this would be yet another variable.)
There is a vast amount of data to be mined on how the government spends its money. True, it is not all accurate (government reporting is not always rigorous, and some organizations misinterpret how items are coded), but for strategic, even tactical decisions, it is invaluable, especially if you know how to find it and how to use it to your advantage. Remember, those who know can do, those who don't won't!