Win work by being ready for the federal fiscal year end
Like many of you, I focus on the federal engineering and construction market, especially work contracted by the U.S. Army Corps of Engineers. Anyone who chases federal contracts knows that the last three months of the federal fiscal year – from July through September – are the busiest. For success, you must be ready, responsive and flexible.
Timing of year-end contracts
There are numerous reasons for this. Congress routinely fails to pass a budget before the federal fiscal year ends on September 30. The last time Congress did this was 1996. Instead, Congress typically passes a continuing resolution to avoid a shutdown of the federal government. A continuing resolution authorizes funding at the same levels as the year before and limits new projects. Budgets are then passed later in the fiscal year. As a result, federal agencies go several months without knowing exactly how much funding they will have.
Federal agencies usually know what their annual funding will be by April or May, but it takes an additional month or two to determine which projects will be funded. Military sustainment, restoration and modernization funds are one-year appropriations and must be obligated by September 30 in the year they are appropriated. Therefore, federal contracting officers are typically limited to July 1 to September 30 to solicit, select and award contracts for military SRM projects.
Although military construction (MILCON) and funds are five-year appropriations and USACE civil works have no specific time limit, contracting officers still attempt to award most projects before the end of the fiscal year. This is especially true of MILCON. The result is that federal contracting officers execute 50 to 75 percent of their workload in the last three months of the fiscal year. This presents both a challenge and an opportunity for federal contractors.
Types of contracting to expect
Due to the short time frames available for solicitation, selection and award of design projects, many contracting officers use:
- Indefinite delivery-indefinite quantity (IDIQ) contracts
- Multiple award task order contracts (MATOC) for design-build projects
- Single award task order contracts (SATOC) for design-build projects.
Proposals are generally limited to cost and many awards are non-competitive. To play in the end-of-the fiscal year opportunity marathon, you need one of the contracting vehicles listed above. If you don’t have one, then you will need to team with a firm that does to win work.
Meeting small business quotas
Because federal agencies have high small business contracting goals, many of these year-end task orders will go to small business consultants and contractors. If you are a medium or large business, you can significantly increase your win rate by developing ongoing teaming relationships with small business IDIQ, MATOC or SATOC holders. Your medium or large business can provide critical capacity to small business contract holders.
In addition, you can help a small teaming partner navigate the many requirements of working for the federal government including:
- Stringent safety programs
- Anti-terrorism/force protection and operations security training
- Small business utilization and reporting
- Cyber security
- Office of Federal Contract Compliance Programs requirements such as affirmative action and equal employment opportunity reporting.
Don’t forget to ask your small business teaming partner to update their contract with their federal contracting officer by adding your firm as an authorized sub-contractor well before the end-of-the fiscal year crunch hits.
Responsiveness and flexibility are key
Ensure your staff is aware of federal contracting procedures and requirements. Your team must be ready to evaluate and respond to a request for proposal quickly, usually within one week. This will require additional effort on the part of technical staff who are probably already busy. Keep in mind the extra effort will be rewarded with federal work that will keep them billable well into the next fiscal year.
Given the varied nature of potential year-end task orders and the short response time for a task order RFP, it is worthwhile to have a large number of small businesses on call. I recommend the use of master services agreements combined with ongoing relationships with key businesses.
It’s important that someone with the authority to review, negotiate and sign contracts is readily available. I’ve had colleagues in other engineering firms receive RFPs at 5 pm on September 30th, respond with a proposal and receive a federal contract before midnight that same day.
The bottom line is that July to September is a target rich environment for the contractor and consultant looking to do federal architecture, engineering and construction. Collaborate with teaming partners. Be ready, responsive and flexible.
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