In this article I attempt to answer a question of interest to all proposal professionals: What will the proposal market be like in 2010? And how much business will we have? The article is based on a review of documentation and personal interviews. I reviewed public records relating to appropriations and spending from 2008 – 2010, and interviewed the following subject matter experts (SMEs):
1. Alan Chvotkin - Senior Vice President of the Professional Services Council. In his position at the Professional Services Council, Alan closely studies procurement activities as needed to represent leading government contractors in lobbying the congress and other government entities.
2. Eric Gregory – Senior Vice President over the proposal program at CACI. Eric has a 10-plus year history as one of the most knowledgeable national leaders of the proposal industry.
3. Chris Hassler – President of proposal consultant firm Syndetics. Chris’s company assists in preparing proposals for some of the largest and most heavily competed government contracts, especially within the Department of Defense.
All indications are that 2010 is going to be a good year for proposal professionals. The estimated federal spending of $3.7 trillion shown in the President’s budget for 2010 is up 5.7% over spending for the previous year, and spending is definitely up for some civilian programs. More importantly, the appropriations for military services and federal agencies are all finalized for 2010. This will let government procurements move forward to the RFP stage without unusual delay.
As Alan Chvotkin explained it, several of the appropriations for 2009 were not finalized until the third quarter of the 2009 fiscal year. Because of these late appropriations, there was a hold up in the release of solicitations. This caused a “crunch”, with procurement activity being pushed toward the fourth fiscal quarter, and there was not enough time to get all the projects through the procurement funnel before end of fiscal year 2009. Since the appropriations are complete for 2010, Chvotkin said, “The result will be more procurement releases and a more usual level of proposal activity in fiscal year 2010, quarter 3 and quarter 4, compared to 2009.”
CACI Sr. Vice President Eric Gregory shares the view that 2010 will see fast business for proposal professionals: “It looks very busy, and I think it is going to be an expanding market for proposal professionals.” He added that,”Based on the number of ‘pent up’ opportunities that are going to be released, it looks like a very busy year from April to October.” He also believes that, “The large opportunities will carry many DoD providers through the next 5 years on major ID/IQ programs. And I see even some civilian-side growth.” “The net-net comparison of this year to last is this: For (CACI), 2010 has started off with a bang. The year 2009 started off slower. And I think the fast pace is going to continue in 2010.” Gregory concludes that, “I believe 2010 will be a very good year for proposal professionals – both on the employee side and on the consulting side.”
Syndetics President Chris Hassler is moderately upbeat about prospects for the proposal industry this year. “So far, I am actually rather encouraged,” he said. “At mid 2009, there was a lot of uncertainty in the market, because the whole DoD approach was so secret and guarded. So it was hard for people to make a determination as to what was going to occur. Therefore, there was hesitancy on the part of industry to start anything. As time has progressed, without unforeseen economic perturbations, I think we will gradually return to a more normal acquisition environment.”
"On the other hand, there will be some change in defense as a result of the Quarterly Defense Review (QDR), which I think will cause some 20 plus programs to be discontinued . . . . As a consequence, you will see reorganization and a reprioritization of the defense budget. In the past many gains in defense spending came from supplemental spending. This time we see a cut in programs seen as inappropriate and inefficient and not necessary, and they will reallocate the savings to new pursuits.
“I believe there is going to be restructuring in industry, and how it will go is uncertain. Some of the larger firms may spin off pieces that don’t fit into core business, and you may also see some other companies interested in acquiring smaller tech companies that [will] let them rapidly acquire technologies. During a period of change like this, there are also opportunities, and so there will be groups needing more proposal staffing support and others needing less. I think the net-net is that we will see some of the ‘pent up demand’ from last year carry over into this year. Although there will be some turbulence and uncertainty, I think there will be a fair amount of opportunity. The question is how you navigate through it. “
Another key question is, “What will business look like during the fourth quarter of this calendar year?” Alan Chvotkin believes President Obama’s proposal to freeze spending at current levels for three years could have a negative effect on spending in the fall October to December months of 2010: “I am fearful,” he said, “of another continuing resolution, which would trickle down to lessen the amount of procurements released in 4th quarter of calendar year programs.” However, Chvotkin believes the overall effect of a spending freeze would be “more spin than substance,” because of all the exceptions such as defense, foreign aid, etc. As Chris Hassler noted, one must remember that any freeze would take place at a time when we have the highest spending levels ever.
