Industries
Government Contracting
For years the word "performance" has been used to describe government priorities. The President's Management Agenda sought to bring focus and accountability. Today expectations are as high as ever that meaningful change will occur in how the Government "does business." The appointment of the Administration's first Chief Procurement Officer signifies both the changes that have occurred and those that will occur in the coming years. Government and its industry partners will need to work together in new and innovative ways to drive better performance and to support agencies efforts to deliver maximum value for taxpayer dollars.
Budget Pressures and the Need to Innovate
Agencies have big goals and tighter budgets. New funds will be funneled to new programs in energy, environment, healthcare and other areas. Programs will be cut due to the inability to demonstrate performance and results. And the proposed stimulus package is unlikely to relieve pressure on existing initiatives. There is also a lack of leadership and the reality of a transition that will likely take more than a year to cycle. The result will likely be delayed projects and contract awards. Contractors have a tremendous opportunity, and necessity, to find new and innovative ways to help the government achieve greater results. The use of pilot projects to demonstrate projected benefits and results, technology to improve collaboration and lower the costs, along with more creative partnering with contactors and government customers will likely become common practice in the years ahead.
The War for the Right Talent
Key leadership and management positions in agencies throughout the government are in transition. And the recession is driving people to seek jobs in the government. The new Administration has also promised government "not-as-usual" which is proving attractive to the workforce. As of January 11, 2009 350,000 candidates had applied for positions with the new Administration. The competition will remain fierce between firms vying for talent, retaining key employees and attracting new talent. Contractors will need to continue recruiting efforts in order to capture the best talent to meet the needs of government buyers.
Emphasis on Transparency and Accountability
The last spotlight period on corporate accountability came on the heels of unprecedented corporate fraud cases at what were thought to be the best and brightest, companies like Enron and Worldcom. The current spotlight period features heavy government intervention intended to restore order and faith in credit markets. Government contractors are reading headlines about "no-bid contracts," and firm discussion and proposed legislation purporting to "clean up" federal contracting. A prolonged period of mergers and acquisition in the government contractor community has raised concerns from regulators. Government "bailout" programs and associated controls enacted or put into place during this period may introduce the need for greater governance, risk and compliance efforts for contractors. All of these factors feed an environment with increased emphasis on compliance.
Competing on Performance
In times of economic uncertainty and recession, reliance on the government as customer and employer increases. The appeal of the government as a customer also increases. This will inevitably drive competition in new ways, with new players large and small. There is high likelihood that additional emphasis will be placed on providing contracting opportunities to small, minority, women-owned and other disadvantaged businesses. Combined with the new Administration's emphasis on performance, contractors should expect greater responsibility and accountability for meeting and reporting on performance objectives and small business goals.
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