I watched a Bloomberg webinar earlier this week about the fourth quarter spending plans for the US Government. I’ve always known that there is usually money left over in the budget that ends up being spent in a flurry in the government’s fourth quarter. The Federal Government procurement system is a very peculiar system for those that are not used to it. This webinar went into a lot of detail regarding which agencies have money left over, why and how they might spend it. For any government contractor that is interested in finding opportunities in the fourth quarter, it might already be too late this year but the webinar could provide hints on what to do in order to position a government contractor for future fourth quarter frenzies.
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There is no question that as the Federal Budget goes down, all aspects will probably follow suit. But all is not lost. The government is still the largest purchaser of goods and services in the world. Yes, the defense budget is taking a severe hit. As the overall budget goes down, the R&D portion of the budget will suffer. This will affect the money available for the SBIR and STTR programs as they are a percentage of the extramural R&D budget of the agency. While the Defense budget is highly scrutinized (because it makes up the largest part of the Federal Budget it only makes sense) there are other areas of the Federal Budget that are not seeing severe cuts. There are parts of the Energy budget that are in fact growing. There are some areas in HHS that also are not heavily affected. These areas represent some opportunities for some small businesses, especially related to the SBIR/STTR programs.
Is it just me or is anyone else getting tired of hearing the Federal Government threaten to shut down? It seems to happen every 3 or 4 months any more. The problem usually boils down to the Democrats and Republicans not being able to get along and play in the same sandbox so they just threaten to "do nothing" so that the government will shut down. "That ought to get a response", just like it did when you were in kindergarten. One side threatens some catastrophic event in order to draw everyone's attention to the issue (or really draw attention to themselves I think). "When the government shuts down, everyone will realize that I was right and we will get our own way"! Well, it rarely works that way in the real world. I find the parallels to today's politics to the politics of kindergarten to be alarming.
There has been a lot said about the impact of Sequestration on not only the government departments but also on Small Business. I have seen a lot of indications that small business may be disproportionately affected by the cuts. The rationale is not only a cut in Federal Programs that some small businesses were bidding on but a cut in funds for the Small Business Administration will mean less money available for Small Business loans. Also, Federal Government departments that traditionally provided assistance for Small Business may lose staff and thus the Small Business will lose some of their "free" support that was afforded them in the past (navigating export regulations is only one example). When you combine this with the apparent delay in funding from many agencies (their way of mitigating risk of not knowing the full effects of sequester) or the reduced level of funding available on smaller contract releases the situation has made Small Businesses very nervous. When we depend so heavily on job growth from Small Business, this almost seems counter-productive to the President's mission.