Market Trends and Federal Contracts That Vendors Should Know About in 2017

IT modernization and category management are the next big opportunities for federal vendors.That’s according to Lisa Pafe, vice president of Lohfeld Consulting Group. During a recent Lohfeld business webinar, Pafe said, “The next administration will shape the future of IT.”

According to Pafe, 77.7 percent of agency IT budgets in fiscal 2017 are earmarked for modernization of legacy systems. In addition, the president’s 2017 budget includes $3.1 billion for an IT modernization fund, and the Office of Management and Budget (OMB) just released proposed guidance on IT modernization.

“Another big trend for 2017 that we’re continuing to see is category management,” Pafe said.

The OMB recently released a draft circular proposing a centralized structure for procurement management and better purchasing power, which merges numerous previous rules regarding the purchase of $270 billion in products and services.

Bob Lohfeld, CEO and founder of Lohfeld Consulting Group, said that recompete bids should be on vendors’ radars, because many contractors have been chasing new contracts at the expense of protecting their bases. As a result, many recompete contracts have been unusually competitive.

“When we look at companies in recompetitions, we find several shortcomings, generally around being inadequately prepared for the recompete,” Lohfeld said. “What we note particularly is that these recompeting contractors are failing to educate their customers on the importance of constructing a good proposal evaluation criteria set. Incumbents are writing proposals that are largely a history lesson of their past five years of performance—they seem to be reluctant to start early and draft their proposal in advance of an RFP, and they fail to get outside reviews of their proposal and score it as the government would score it.”

Finally, Lohfeld said that the use of lowest price technically acceptable (LPTA) bids are waning in favor of best value, especially in service bids. He said the last large LPTA bids are the Defense Information Systems Agency’s Encore II and the Navy’s Next Generation Enterprise Network-End User Hardware.

The Lohfeld Consulting group also identified 20 upcoming civilian and Department of Defense contracts that meet three criteria: a likely 2017 request for proposal; likelihood of funding and awards next fiscal year; and a significant pool of contenders.

For more information on government contracting, please contact Ed Ryan, CPA at 703.652.1124 or please feel free to leave us a message below.

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Material discussed in this article is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.

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