How Is the Market Shifting? - (Archived)

At the Professional Services Council Annual Conference in early October, PSC released the 2015 Services Sector Review (available for download for PSC members). The review contained good news about some market trends: The federal market for technology and professional services is stronger than many might think. The professional services industry has weathered a spending trough, but things are looking up: Contract spending in the civilian agencies grew during fiscal year 2014, which featured a more than three-week government shutdown.

In an overview, PSC discussed some overall trends from the last year:

  • The market is shifting. New players, new cultures (in and out of government) and new expectations are all increasingly evident. And the government is – slowly – seeking to adapt.
  • Consolidation is happening. First the Air Force, then the Army, and now DHS have made major commitments to using GSA’s OASIS contract. This contract, designed to provide complex integration capabilities, is also being used for an entirely different purpose: a one-stop shop for multiple schedules. Next up, Alliant 2. Does a major consolidation of contract vehicles lie ahead?
  • The federal “responsibility determination” is being refined. It is the primary determinant of whether a company is worthy of a government contract. But thanks to a series of policy and legislative changes, with more to come, that responsibility determination itself is being redefined, and it could get worse. What IS a responsible company? Who gets to decide? And what would a national standard for ALL professional services firms mean?
  • The trend to “as a service” continues. But the government is largely out of step with what’s required to successfully capitalize on that shift. How does your company succeed in a market stuck in old thinking but looking for new thinking?

All these shifts and trends could have short- and long-term effects on the market. This coming year will be interesting as we watch these trends unfold.

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