At a recent event presented by the Montgomery County Chamber of Commerce’s GovConNet, special guest Brian Friel shared his perspective on 2015 government contracting opportunities.
In “Procurement Opportunities: Where the Money Is,” the Bloomberg LP government contracts analyst offered an optimistic outlook for the coming year after a prolonged period of stasis in the federal market, which hopefully will result in timely awards. More than $450 billion in contracts will be issued in 2015, which is music to many contractors’ ears. Friel noted that 25% of the budget is discretionary, of which defense spending accounts for approximately 50% of it. Civilian discretionary spending, on the other hand, remains relatively flat.
Lexy Kessler, lead partner of Aronson’s Government Contract Services Group was interviewed by Federal News Radio regarding the continuing resolution passed last week that will keep the government operating through Dec. 11, 2014. On “In Depth,” host Francis Rose asked Kessler to offer her perspective on what government contractors can do between now and December 12th to prepare for a potentially passed budget. She offered several suggestions:
President Obama today signed a FY2015 Continuing Resolution (CR) that will fund the federal government through December 11, 2014.
On September 17th, after some debate about an amendment that would authorize support for Syrian Rebels fighting ISIS/ISIL, the House passed the CR before sending it through to the President. With less than two weeks remaining until the beginning of FY2015, this CR serves as a temporary measure for a Congress that has stalled in its efforts to pass pending appropriation bills.
The bill also addresses the following issues:
On March 28th, Alan Chvotkin, Executive Vice President and Counsel of Professional Services Council presented the 2014 Market & Policy Overview to the Greater Washington Society of CPAs. The presentation covered the results of sequestration and gave an outlook ahead for fiscal year 2014 and beyond as well as the challenges ahead. Some key points to note are as follows:
Professional and IT services did not feel as much pain as other sectors: As you may remember, the Budget Control Act was supposed to bring budget cuts across the board; however, some sectors were hit much harder than others. While professional and IT services collectively made up 25% of DoD budget in FY12 and 45% of the civilian budget, the respective sectors only absorbed approximately 15% of the $20.7 billion reduction in spending from the DoD budget in FY13 and under 10% of the $4.1 billion reduction in spending on the civilian side in FY13. Conversely, construction and R&D suffered the largest cuts in the DoD budget, which was approximately 60% of the $20.7 billion cut, while construction and utilities and housekeeping suffered approximately 45% of the $4.1 billion cuts in the civilian spending budget.
When we last checked in on our government services indices back in October 2013 following Q3 earnings calls, our contractors were fresh off 16 days of sequestration, the budget debate had been postponed for another few months, and the overarching theme across all calls could be summed up in one word: uncertainty. Though this uncertainty surrounding long-term budget cuts has not completely subsided, the January 2014 bipartisan appropriations bill certainly had many executives breathing a (slight) sigh of relief during Q4 2013 earnings calls, released in late January and early February:
“Sequestration is eliminated for fiscal years 2014 and 2015 and replaced with reduced spending levels.