As the year is drawing to a close, many new contract opportunities open up for government contractors. This end-of-year spending rush is quite common, as government agencies find ways to make use of excess funds in their yearly budgets. How can you get a piece of that fourth-quarter spending spree? Keep reading to learn about some important end-of-year opportunities that government contractors can’t miss out on, and how to improve your odds of landing those opportunities for yourself.
Reasons for the Q4 Push
As we stated above, the fourth quarter in the fiscal year is often when government agencies are trying to spend what’s left in their budgets. This often occurs because these agencies will wait on low-priority projects to ensure they have the funding for more important goals that they’re trying to accomplish. Then, as the end of the year approaches, they will quickly allocate those funds to the projects they’d been putting off. In essence, the Q4 rush is caused by procrastination, followed by a sense of urgency to spend the funds.
Often, these low-priority projects can fall into certain areas, so if your contracting business specializes in any of the following services, your odds of taking advantage of the Q4 spending rush are much higher:
- IT services and equipment
- Construction-related goods and services
- Office equipment
Of course, that’s not to say that other types of contractors will never be able to take advantage of these year-end spending increases. Your odds will simply be higher if you can provide a good or service that’s often pushed off until year-end.
Planning Ahead for the End of the Year
Your area of expertise is not the only important consideration if you want to take advantage of year-end spending sprees. You need to plan ahead for this time of year and keep in mind all of the following:
- Keep in contact with your government customers. Ask about their needs and inform them of your availability so that your business is at the front of their mind when they’re considering these Q4 projects.
- Plan to have an aggressive Q4 sales campaign, focusing on products and services that fall into the categories mentioned above.
- Line up extra resources to fulfill on fiscal year-end projects.
- Have a clear, established process for speedy proposal preparation. You’ll likely have a lot of opportunities available at this time of year, so you’ll need to be able to make quick decisions on them.
- Utilize your staff and subcontractors to seek opportunities and bring you information. This can lead to quick awards.
Note that having a quick proposal process established doesn’t mean relying on boilerplate proposals. This might help you complete the proposal more quickly, but it decreases your odds of winning the contract. Instead, make sure you can make fast decisions, so that you can dedicate the necessary time to compile a convincing, award-worthy proposal.
Set Yourself Up for Success
Make sure that you and your company are set up to successfully fulfill these Q4 rush projects. Here are some things you can do to help yourself succeed:
- Write the entire statement of work for the project you want, so it’s ready to copy and paste.
- Research the competition and give it to the contracting officer to show your company’s advantages over other contractors.
- Justify your costs in detail to reduce the amount of work the contracting officer has to do.
Preparing this information ahead of time can help you to get those bids out faster, and providing that information to the contracting officer can work to your advantage; they’re likely working longer hours than normal at this time of year, and a contractor that will reduce their workload can look very appealing.
Create Your Own Opportunities
Knowing that government agencies increase spending in Q4 can allow you to create some opportunities for yourself, rather than simply waiting for new contracts to become available. Ask yourself what additional needs your customer has recently spoken to you about; if you can’t think of any, don’t be afraid to ask. Look into offering equipment upgrades or other add-ons to existing contracts with your customers to increase their spending before the end of the year. You could also look into breaking up your projects into a pilot or proof-of-concept that you can accomplish this year, to get funding for a larger project next year.
With a good strategy and proper planning, you can take advantage of the Q4 spending rush from many government agencies. If you need help leveraging these opportunities and keeping your financial records in compliance with government regulations, contact Peter Witts CPA today. We specialize in working with government contractors like you and helping you to succeed.