Market Conditions Affecting the Federal Channel

by Skip Liesegang, Vice President, Government Channels Division

To understand the challenges of selling IT goods and services via channel partners in fiscal 2012 and 2013, it is important to understand the chief dynamics of the federal IT market itself. From a revenue and spending standpoint, the market remains fluid. In one sense, that’s not new in a market that budgets year-to-year and has 535 people who can potentially say no to one project or another.  From a technology standpoint, several enduring initiatives guide the way for the next several years. We think these initiatives will continue even if a change in administrations occurs next year. That’s because they reflect, federal-style, important IT general trends.

These trends include:

• Everything as a Service: This phrase refers to the trend by the government to acquire software and networks as services rather than discrete pieces
• Vehicle proliferation: Last year, the Office of Federal Procurement Policy (OFPP) imposed a requirement for agencies to build detailed business cases for new government-wide or agency-wide acquisition contracts.
• New competition rules: Finalization of several new rules took place in February that require more competition on small purchases from the GSA Multiple Award Schedule contracts, institutionalize a wide range of industries being under-represented by women-owned businesses, and attempt to limit use of cost reimbursement contracts.
• Trusted supply chain: Thanks to provisions in the 2011 Defense Authorization bill and the 2012 Defense Authorization bill, suppliers of electronic and other equipment to the DoD are liable for damages from counterfeit or substandard parts.
• Suspension and debarment: OFPP doesn’t think agencies have been using this tool enough to whip contractors into shape.

If you would like to learn more about the market conditions affecting the federal channel, you should take a look at this report: State of the Government Channel.