3 Questions Every COTS Vendor Should Ask in Preparation for FY16

by Chris Wiedemann, Senior Analyst

It’s the last couple days of the 2015 government fiscal year, which to most of us means only one thing: closing year-end business. Selling COTS products to the government can get pretty hectic around this time of year, so you’d be forgiven for overlooking a salient and somewhat worrying fact: we still have no agency funding for FY16.

With exactly 2 days left of FY15 (and counting) the only existing Continuing Resolution (CR) flat lined in the Senate, although Congress does appear poised to pass a clean CR which has a good chance of making it to the President’s desk. Still, they are dealing with a very tight deadline and we might be in for another brief government shutdown before Congress can put a short-term CR in place.

The good news is, we’ve been here before. The beginning of FY14 became famous for its 16-day government shutdown. While it was painful for both the government and its industry partners, COTS manufacturers made a rebound, showing strong results at the end of the fiscal year. In the event of another shutdown, the best advice we can give to the COTS community is “hold tight.” While having most of your customers furloughed to begin a fiscal year isn’t ideal — and the impacts of a shutdown on the larger economy are significant — COTS vendors will likely emerge more or less unscathed. All that being said, there are still important questions that need to be answered and issues that need to be addressed as we enter FY16’s uncertain beginning.

Here are 3 questions COTS vendors should ask themselves to prepare for October:

1. Continuing Resolution or omnibus?

The type of funding bill that Congress eventually passes will have a substantial impact on what your customers can and can’t buy. While an omnibus would give them more flexibility, we expect the new fiscal year will begin with a Continuing Resolution – and, in an election year, there’s a very good chance we’ll see nothing but CRs until FY17. This makes it more important than ever to track your products to your customers’ existing projects and requirements.

2. Whither sequestration?

While a CR would keep the government’s discretionary budget under the hard cap that would trigger another round of sequestration, any potential omnibus or new funding would likely require some Congressional action to lift the spending cap, which would make an omnibus a bigger battle than usual.

3. Who gets new money?

Another possible route is a so-called “cromnibus” – a spending bill that combines FY15 funding levels for some agencies while giving others new appropriations. This would mean that some agencies have “new money” to spend in FY16, which is always easier to work with. In the event of a cromnibus, staying on top of who gets new appropriations will be crucial to your sales strategy.

The end of the fiscal year being what it is, the questions listed above are unlikely to be front of mind for you until October 1^st. However, keeping an eye on your customer’s appropriations is not just a good idea; it’s essential to your long-term strategic planning and your tactical victories. Not only will you weather the potential shutdown storm, staying on top of your customer’s funding will help you navigate the remainder of the next fiscal year as well.

Need help identifying top IT decision makers and opportunities in the government? Contact immixGroup’s industry-leading Market Intelligence team today to learn about specific programs and contacts that have a pressing need for your IT solution.