Set-Aside Alert news analysis:

Trump OKs $1.3T spending bill

Vendors prepare for epic 4th-quarter spending rush

      President Trump signed a $1.3 trillion spending bill passed by Congress, avoiding a government shutdown and funding the government through the remainder of fiscal 2018.

      The legislation includes a 10.3% increase in new discretionary funds for fiscal 2018 alone: from $1.17 trillion in fiscal 2017 to $1.29 trillion in fiscal 2018, according to an analysis by CQ Intelligence and Castlemar Consulting.

      There is $80 billion in additional funding for the Defense Dept., and $63 billion in additional funding for civilian agencies.

      “With a short window remaining in fiscal 2018, agencies will work hard to allocate an additional $143 billion in funding,” Nick Taborek, senior market analyst with CQ Intelligence, said in a recent webinar presentation co-hosted by Set-Aside Alert. “Fiscal 2018 is shaping up to be a once-in-a-decade spending spree.”

      Defense agencies, along with two Homeland Security Dept. agencies--Customs and Border Patrol (CBP) and Immigration and Customs Enforcement (ICE)--will get the largest increases, along with the Energy Dept.’s national security programs.

      Most civilian agencies will get increases as well, but the State Dept., US Agency for International Development (USAID) and the Environmental Protection Agency will continue to experience budget pressure from reduced funding, Taborek said.

Set-aside spending peak

      Federal contract spending, including set-aside spending, generally jumps in the fourth quarter, and especially in final weeks before the fiscal year ends on Sept. 30.

      For example, in fiscal 2017, total set-aside spending averaged around $4 billion a month from the start of the fiscal year in October through February, rising to about $6 billion to $8 billion a month from March through August, and increasing dramatically to $17 billion in September, according to CQ Intelligence data.

      Expect this spending trend to be even stronger this year as agencies rush to spend a historic increase in funding, Taborek predicted.

Military O&M small biz set-asides

      An area in which small business set-aside spending has been increasing is in military operations and maintenance (O&M). In fiscal 2017, O&M set-aside spending increased by 19% in the Army, 18% in the Navy, 16% in the Marine Corps and 9% in the Air Force.

      This type of spending is expected to keep growing.

      Breaking down the O&M spending further, the top categories included Facility-Related Services; IT Outsourcing; Management Advisory Services; Maintenance, Repair & Overhaul; and Non-IT Technical and Engineering Services.

Small business strategies

      To prepare for what is likely to be a historic spending season for federal contracting, Taborek and Mark Abel, founder of Castlemar, recommend the following strategies:

• Look to expand your work with existing customers first;
• Develop “ready to go” proposals for current clients;
• Increase the scope of current projects;
• Propose new projects logically related to current work;
• Create incentives for your existing program management staff to grow current contracts;
• Partner with other firms to offer skills and capabilities you do not have but you know the customer needs;
• Do research to identify and target additional buyers;
• Get proposals into buyers’ hands by July 1 at the latest.

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