USA Today referred to it as “Christmas in September” for contractors and vendors that sell commodities and services to various government organizations throughout the year. As the 2014 Fiscal Year comes to an end, there is no reason to think otherwise. Unobligated dollars that were programmed at the beginning of the year go unspent for a lot of reasons, primarily due to the uncertainty of demands and priorities within the organizations.
Unspent dollars can be caused by plenty of things, including a change in the priorities of a real world mission or event, a reduction in staff that does not allow for the procurement process to be completed in a timely manner, surplus inventory that needs to be used from the previous year, and variations in commercial pricing. Although improving, there is still this end of the year surge that sets a stage for many to see as fraud, waste and abuse of tax dollars, when in reality it’s just the system working as it is designed.
What does it mean to us, the vendors? Results include a “bucket” of funds that fall into the “use it or lose it” well. When they go to empty that bucket, the result can be both positive and negative, depending on the position they’re in. They include:
– Low value, “nice to have” purchases
– Quality tends to drop off in place of quick buys
– Priorities change to allow for the “nice to have” vs. the “must have”
If we learn to take advantage of this, can it truly seem like Christmas? Here are a few ideas you can work throughout the year to be prepared:
- Know your customers’ budget situation/process better than they do. When dealing with various government agencies, you have to have a good understanding of their processes, including:
- What is their fiscal year?
- What budget items can cross into a year without being lost?
- What are their procurement policies (formal and informal procurement policies)?
(NOTE: It’s all a matter of public record)
- When you’re working opportunities throughout the year, make sure you listen and understand what their “nice to have” needs are. Start building a list of smaller and quick turn solutions that they could get approved and generate “good will” with.
- Get involved early as they build the requirements and future budget. That process can provide you with up to a 5 year “heads up” on what they need. If you can identify a 2014 priority now, they can spend 2014 money even faster.
- Find out if they have any “rollover” authority and what type of commodities can be procured using it.
- Counter the low quality/less quality by providing the best price and letting them know that the quality has not changed, only your ability to provide it to them quickly and within your budget.
- Work as a team with your partners to provide total solution packages that assist in meeting a large requirement with a small package.
Remember that not all organizations have a spending spree. A good example is a department that has only mandatory programs to manage. They will not experience a spree since their money is a priority throughout the year.
Give Lowry Solutions’ Government Tracking Solutions a call, and let’s coordinate our lines of effort and work towards having a great Christmas morning under the tree on October 1st, 2014.