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Contracting Delays and the Procurement Waiting Game

By

Director, KippsDeSanto & Co.

Posted on August 14th, 2012

Posted under: Government Services

Frustration is mounting amongst government contractors as an elongated procurement cycle, contract delays / cancellations, and bid protests become commonplace in chasing Federal contracts.  The real dollar and opportunity cost impacts extend beyond frustrated business development (“BD”) departments by hindering a company’s ability to forecast performance, estimate cash flow needs, and allocate appropriate resources to target opportunities.

As agencies and contractors prepare for 2013 budget cuts, large-scale reductions may exacerbate delays and cancellations given (i) potential reductions in contracting personnel, (ii) funding reductions for existing / new programs, and (iii) additional protests due to heightened competition.  Whether civilian or defense, contract or IDIQ, healthcare or intelligence – it seems the relative “safe-heaven” markets are becoming fewer.

Although government services buyers are slowly becoming more accustomed to the aforementioned bid and proposals (“B&P”) difficulties, these issues still have a negative impact on an M&A sale process.  Most notably, they impact financial projections and forecasting credibility during a sale.

What can a contractor evaluating the potential, or in the midst, of a sale process do?  The first box to check is ensuring BD and B&P teams are as strong as possible.  In addition:

  • Expand your pipeline.  Even the highest probability recompetes and new opportunities can go a different direction.  You can’t win what you don’t bid, and an unlikely award could backfill an unforeseen loss.
  • Chase IDIQs.  While vehicle procurements are not immune from delays, task orders seem to be tracking to faster timelines.
  • Utilize conservative probabilities of win and start dates.  Buyers are putting increased scrutiny on recompete / identified win rates and award timing given intensified competition and delays.  Beyond maintaining credibility, this may encourage BD and B&P teams to drive growth.

Contributors: Marc Marlin and Robert Dowling

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