Kevin Plexico, senior vice president of Information Solutions with Deltek and 2021 Wash100 Award recipient, published his latest article as a part of Executive Mosaic’s GovCon Expert program on Thursday.
Previously, GovCon Expert Kevin Plexico discussed the major improvements that government contractors and their respective organizations have made to combat the effects of the COVID-19 pandemic. In his latest article, he broke down the latest trends and previewed the upcoming federal and contract opportunities in the government contracting (GovCon) market for the next fiscal year.
You can read Kevin Plexico’s latest GovCon Expert article below:
What the Top Federal Opportunities for FY 2022 Mean for the Federal Government Contracting Market
By: GovCon Expert Kevin Plexico
As we move into the beginning of a new fiscal year, Deltek’s research team is keeping a close eye on the trends and contract opportunities that will shape the year ahead.
Beginning October 5, Deltek will release the Top Federal Opportunities for FY 2022, the newest edition of our annual flagship series of reports and webinars highlighting the federal bellwether contract opportunities for the coming fiscal year.
The Top Opportunities looks closely at the largest federal business opportunities expected to be offered by federal government agencies in the next twelve months.
A Growing Federal Government Contracting Market
First, let’s set the context for these top federal opportunities. As I have written before, we have been seeing significant growth in the broad federal contracting market for several years. The now-concluded 2021 federal fiscal year resulted in growth even in the face of COVID-19 economic ramifications, election year complexities and a changing acquisition landscape.
Though I expect continued uncertainty in the marketplace, including the ongoing response to COVID-19 and the current discussion around potential infrastructure funding, another overall solid year for the federal government contracting market seems very possible.
In the midst of all this comes a move from businesses to expand their business development efforts, especially in the public sector. Companies are eager to capitalize in a market still ripe for opportunity.
According to the latest Deltek Clarity study examining the trends and challenges faced by businesses in the government marketplace today, more than half of the government firms surveyed indicate that adding more business development resources is a top priority in the coming year.
A full seventy percent of those surveyed believe government sales will increase in the next 12 months, especially in a few specific industries: professional services, aerospace and defense, healthcare and AEC (architecture, engineering and construction).
Though overall win rates were flat compared to the previous year, a higher level of competition in the market at all levels of government has business leaders rethinking their strategies and examining new ways to expand their government business in 2022.
This combination of businesses looking to grow their government sales and a federal market still full of possibilities makes it the perfect time to examine the largest federal bellwether contract opportunities for the coming fiscal year.
The Top Federal Contracting Opportunities for FY 2022
For 18 years our Federal Research team has produced a series of reports examining the leading federal contracting opportunities for each fiscal year. This year’s edition of the series includes an analysis of the top 20 unrestricted federal opportunities, the top 10 federal set-aside opportunities, the top 10 federal professional services opportunities and the top 10 federal AEC (architecture, engineering and construction) opportunities.
Unrestricted Federal Opportunities
The top 20 unrestricted opportunities are available to the broadest group of contractors. These federal opportunities may last for multiple years, be available to many providers of goods and services, and be worth hundreds of millions – if not billions – of dollars. They can fall under a number of different of industry categories (often more than just one) and can be released by a wide variety of government agencies.
This year, our Federal Research team identified these three contract opportunities and vehicles as the most valuable unrestricted federal opportunities:
- Hanford Integrated Tank Disposition Contract (ITDC)
- Savannah River Site Operations (SRS Operations)
- Federal Strategic Sourcing Initiative for Building Maintenance and
Operations Unrestricted Phase 3 Zones 7 Through 14 (FSSI BMO FO)
Federal Set-Aside Opportunities
The federal government aims to set aside approximately 23% of its overall prime contracting dollars for businesses that fit into one of several set-aside categories. Just because a company fits into the category of a small business, or is qualified as an 8(a) business, does not necessarily mean they aren’t able to get in on some of the major contracting opportunities as well. The top 10 federal set-aside opportunities for FY 2022 represent billions of dollars in value, are associated with several different federal agencies and are tied to a variety of industry categories.
Professional Services Opportunities
The market for professional services firms to do business in the public sector is broad, yet deep. Federal business opportunities in the professional services industry total billions of dollars each year across an incredibly wide variety of industry sub-categories. Some of the more popular industry sub-categories within the professional services space include management consulting, human resources, personnel services, finance and insurance. The top 10 professional services opportunities that our Federal Research team identified have ties to several of these categories.
Architecture, Engineering and Construction (AEC) Opportunities
Whether it’s the design of a new government building or the renovation of a major roadway, there is no shortage of ways that federal government contractors can grow their revenue by targeting major architecture, engineering, and construction opportunities. The top 10 AEC opportunities in the federal space is vast and contains ties to several different federal agencies.
Each opportunity across all four of these contract types were drawn from Deltek’s GovWin IQ solution, offering business development intelligence on government contracting opportunities, and vetted by our all-women-led Federal Research team of experts. The list of top opportunities have estimated solicitation dates in FY 2022 and were chosen based on the total expected contract value or the anticipated ceiling value.
Altogether, they represent 50 of the largest, most influential federal government contracting opportunities that are expected to impact the market in the coming 12 months.
What Government Contractors Should Take Away
There are a few key takeaways we can observe from these top opportunities. Contracting spend continues to grow, both Civilian and Defense overall spend rose by tens of billions of dollars between FY 2019 and FY 2020. Secondly, these opportunities are spread out among a variety of industries. This year, for example, six of the top unrestricted federal opportunities were in the professional services industry.
The list also contained more than one opportunity in each of the following areas: operations & maintenance, defense & aerospace, environment & conservation services, and information technology.
Even if your business does not operate in one of these industries or is required to pursue a top contract vehicle, it is certainly worth paying attention to these opportunities even if your business does not plan on competing for the contract. The highest-profile federal procurements often go a long way towards shaping the broader federal government contracting market.
Whether or not one of these top opportunities fits into your business development plan for FY 2022, the same challenges apply in order to grow your government sales. The study highlights two of the most common challenges government contractors face today: increased competition and lack of business development resources. It’s a tale as old as time, businesses need to do more with less.
In response to these challenges, companies are increasingly hiring business development resources, and as observed in much of 2021, the war for talent is well underway. Even though companies have more data and more resources than ever before at their disposal, understanding how to use and leverage it effectively is still an ongoing challenge and one that is more important than ever to master. All of this ultimately means that simply working harder is not enough to get ahead in this market. Businesses will have to work smarter to overcome the competition.
Tracking Top Federal Opportunities for FY 2022 is a good start. Understanding the top contracts, the tip of the iceberg – businesses serious about government contracting growth can master their market by partnering with the right solution to arm themselves with information on spending trends and procurement patterns. Taking these steps give businesses the intelligence needed to help build a strong pipeline and prepare themselves for federal government contracting success in the coming year.
