Government Contracting and the FY2014 Budget

The FY2014 Federal Government Budget was released by the Executive Branch and sent to the Legislative branch on April 10, 2013.  The budget proposal is 244 pages long.  President Obama indicated that this budget proposal was geared to make America a magnet for new jobs and manufacturing.  So what does that mean and how will that create opportunities?  I want to explore a little of that here.

I talked a little bit about the President's proposed budget and opportunities in the Department of Defense a couple of weeks ago.  To expland on that, here are the defense opportunities from a top level of this proposed budget:

  • The budget for the Air Force is actually increasing over FY 2013 levels (going from $140B to $144.5B)
  • Provides for an increased focus on cyber security
  • Military Personnel is increasing from $135B to $137B
  • Operations & Maintenance is decreasing slightly from $210B to $209B (although the Air Force will see an increase of $2.4B)
  • Military Construction will increase very slightly by $531M (again, the largest  increase in the Air Force)
  • The budget for procurement is flat at about $99B (down about 1/2%)

 The President also explains that this budget proposal includes elimination of many of the tax incentives that caused jobs to be moved off American soil.  There is also a tax incentive proposed for businesses that hire new workers or increase pay for workers.  There are other incentives, such as building up the infrastructure (roads, bridges, etc.) to facilitate business.  There is a focus on education to build up our future workforce as well.

Here are some of the opportunities in Agencies other than the Department of Defense:

  • The Department of Commerce has a $1B increase over FY2012, mostly focused on improving manufacturing (thereby creating jobs)
  • The Department of Energy has an 8% increase over FY2012 levels including a 5.7% increase in funding for key research agencies
  • The National Science Foundation has about an 8% increase over FY2012 funding levels
  • Provides for over $80B in discretionary funding for the Health & Human Services, an almost $4B increase over FY2012 levels
  • Department of the Interior has about a 4% increase, Department of Transportation increase 5.5% and HUD has about a 9% increase over FY2012 levels.
  • The Department of Agriculture's discretionary funding level is about equal to the level in FY2012Other agencies are either flat (compared to FY2012) or declined from those values including NASA that is down 0.3%

You can view the full budget here to see more specifics and details in areas I've outlined above.  I think there has been a lot of talk about how the Federal Government is no longer a good customer for business.  I don't think that is fair.  The Federal Government is re-adjusting (following a period of spending to support domestic programs as well as a major military effort) but we have seen this many times before in history.  The government still needs goods and services and still desires to purchase them from private industry where economical.  In most cases, private industry will be the most economical source.  There may be a shift in what is purchased during this period but the government will still spend very close to the same amount of money (as we can see above).  If you have difficulty in finding where to shift your marketing efforts, give me a call.  I'll be glad to discuss it with you.



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