The ongoing federal budget impasse of recent months is generating widespread concerns about federal contract solicitation and award delays affecting both small and large firms, and fears that those patterns may be worsening in 2013.

Those worries have come into greater focus recently with the release of several studies.

The prolonged budget stalemate began 18 months ago when Congress and the White House approved automatic federal budget cuts totaling about $85 billion for fiscal 2013 to reduce the national debt. Initially cast as a worst case scenario meant to spur a more thoughtful deal, the broad cuts are now seen as likely to go into effect, starting March 1.

Federal vendors of all sizes already are experiencing significant negative effects, including delays and cancellations of solicitations and awards, according to new studies by Deltek and by Centurion Research Solutions.

As of mid-February, solicitations for five out of top 10 small business federal opportunities for fiscal 2013 have been delayed by two to six months each, Jennifer Sakole, principal analyst with the Federal Information Services team at Deltek, told Set-Aside Alert. Deltek’s report, Top 10 Small Business Set-Aside Opportunities for Fiscal 2013, was issued in December.

Additionally, to date, solicitations for 12 of the top 20 largest federal contracts overall for fiscal 2013 have been delayed, and five have shown little or no activity and appear to be at a “standstill,” Sakole said.

“Only three are on track,” Sakole told Set-Aside Alert.

Deltek had released its Top 20 Federal Contract Opportunities for Fiscal 2013 in October.

How serious are the delays? “Some are minor and some are fairly significant,” Sakole said. “It is something to be watching, but not doom and gloom. At least we are seeing activity (on most delayed and undelayed solicitations). As long as there is continuing activity, that is a good sign. You want to watch out for silence.”

The Centurion Research survey of 131 federal contractors of all sizes reflected a rising degree of concern about delays, both in solicitations and in contract awards. The vendors also are anxious about hits to revenues and about availability of new opportunities.

For example, 78% of the respondents said they experienced moderate or significant impacts on their business growth from solicitation delays in fiscal 2012, and 87% anticipate similar impacts in fiscal 2013.

Also, 74% of the contractors reported moderate or significant impacts from award delays in last fiscal year, and 89% expect those impacts this fiscal year.

“The companies are seeing increasing impacts from the number of delays,” Mike Lisagor, government business development subject-mateer expert for Centurion, told Set-Aside Alert.

“In one company of nearly 100 people, nearly everyone is waiting on an award,” Lisagor added. “The delays are hitting everyone, but small businesses have less of an ability to sustain themselves through a delay. They are only hiring through funded contracts. In general they are being much more conservative in investments and projections.”

“I’m concerned about the long-term impact on contract performance, industry’s ability to sustain a profitable business and national security as well as agency performance, people and missions,” said Gary Loyd, Centurion’s chief executive.

Regarding revenues, 52% reported moderate to significant impacts on revenues in fiscal 2012, rising to 83% anticipating those impacts in fiscal 2013.

Regarding the number of solicitations available, 68% had moderate or significant impacts from that factor last fiscal year, and 85% expect such impacts this year.

About 85% of the vendors also were worried about the shift to low-price-technically-acceptable awards in the last fiscal year, and 89% are worried about that this year.

In another study, Deltek researched more than 6,000 federal procurements in fiscal 2012, Kevin Plexico, vice president, wrote in a recent Washington Post article.

For contracts valued at more than $1 billion, the average time from solicitation to award was 377 days. The average multimillion-dollar purchase took over five months to award, he added.

The larger the procurement, the longer the cycle, and the greater likelihood of unexpected delays, Plexico added.

More information:
Centurion survey:http://goo.gl/w10fQ
Deltek Top 10 Small Business aset-Aside Opportunities in Fiscal 2013 Top 20 Federal Opportunities in Fiscal 2013: http://goo.gl/XrO9b
Deltek report: http://goo.gl/eEosB