Government Shutdown Continues: Lessons Learned for Contractors - (Archived)

As no deal was struck last night to end the government shutdown and raise the debt limit, it is the ideal time to take a hard look at lessons learned.

For more than two weeks, industry members have dealt with tremendous uncertainty as new contract awards grounded to a screeching halt, which have caused a severe cut in contractors’ profit margins and hindered the ability to meet earning’s goals.

So what did we learn over the past two weeks?  The FedPulse editorial team pulled together the following lessons learned:

  • Diversification May Be the Best Defense:  The government shutdown has taught us that the once-steady government business pipeline has been replaced by uncertainty, and contractors need to be more nimble to survive. More forward-thinking contractors began embracing adjacent market opportunities in Health IT, energy and international markets in 2012.  More cost-effective models have an advantage in an uncertain and highly competitive market.
  • We Still Have Sequestration in 2014:  While many contractors adjusted to sequestration in 2013, the reality is that things could get worse in 2014. The fiscal 2014 sequestration cuts are expected to kick in by January 15.  These cuts were a sticking point in the current negotiations over the shutdown and debt ceiling.
  • Find Alternatives to Events to Connect with Government: As we saw with the postponement of the GEOINT 2013 Symposium, no government event is immune to the shutdown and budget cuts.
  • Connecting With Government More Creatively:  The recent Market Connections and Boscobel Marketing Communications study found that both industry and government believe that event cancellations and federal travel restrictions are negatively impacting innovation and collaboration.  From embracing thought leadership to hosting more webinars, government contractors need to be more creative when it comes to reaching federal decision-makers.
  • LPTA is Here to Stay: Lowest Price Technically Acceptable (LPTA) procurements are not going away, and contractors need to find ways to be more competitive to survive in an LPTA procurement environment.

Clearly, there are still some challenging times ahead.  However, the good news is that many of us are getting used to “uncertainty being the new norm.”  As such, today’s winning contractors have sharpened their efforts by being more nimble, agile and creative.

To quote from Edgar Allen Poe, “Never to suffer would never to have been blessed.” Perhaps one day we will all see a silver lining when we get through these challenging times.


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