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Blog | 01.06.21

What Can Government Suppliers Expect in 2021?

Now that 2020 is a wrap, many people want to know: where do we go from here? Though hopeful that we’ll get the pandemic under better control in the coming months, government leaders are facing a harsh reality: we could be living with COVID-19 for a very long time. Even if we contained the virus today, it could take years to fully recover from its economic, health and community impacts. Therefore, agencies must remain agile and budgets must be tightly controlled.  

In fact, 2021 may look a lot like 2020 from a government perspective. Nearly every one of state chief information officers’ (CIO) priorities for this year is centered on standing up, securing and managing digital government services and systems that can support operational continuity in a post-pandemic world. (Change can’t happen overnight.) And we know that public sector revenue sources remain limited, which means budgets will be controlled just as tightly in the next year as they were last year. 


But that doesn’t mean the public sector will remain stagnant. In fact, we expect there to be many policy and process changes as new leaders take office and the pandemic-spurred changes to government programs and services continue to unfold – all of which will directly impact procurement.  

Therefore, anyone planning to bid on government contracts in 2021 – or who already holds a government contract – needs to be prepared for the following: 

  • New cybersecurity standards. If you want to do business with the public sector, be prepared to lock down your systems and devices tighter than ever. After the many large-scale breaches that occurred in 2020 at government contractor sites, agencies will want to be sure you're an asset and not a point of vulnerability. Even if you’re only selling commodities, it’s quite possible that you’re going to have to implement new security tools to protect sensitive government data regarding your sales and products.
  • Greater sharing...of information, business practices and even contracts. Agencies are going to pool their resources, even across traditional jurisdiction borders, to source the goods and services they need to sustain operations. In fact, the increased use of “shared services” is a top 10 priority for state CIOs. When you speak with a buyer at one agency, find out if they are engaged in any cooperative purchasing agreements or conducting market research on behalf of multiple agencies. You may also want to inquire about the contracting vehicles they are using most these days. Are they buying off co-op contracts? Shopping more online? Or soliciting the services of a prime contractor who is then expected to team with other companies or bring on subcontractors to fulfill obligations? If you find that your best chances of securing a government contract is to team with another company, be sure to do your due diligence. This free guide will help you get started:
  • Greater competition. Agencies are going to do everything in their power to increase participation numbers for every competed bid in 2021. They are also going to "shop around" more, whether sourcing from open contracts or online marketplaces, to ensure they're getting the best value for each dollar spent. But they aren't going to settle or compromise when it comes to what their customers need. If a specialized product, service or capability is requested, they will deliver, even if that means looking beyond traditional vendor pools as we discussed in this blog post.
  • Greater supplier diversity. With the public sector under more pressure to increase DBE utilization in the wake of the COVID-19 crisis, we expect there to be more opportunities for women-, minority- and veteran-owned businesses this year. We also expect there to be a push for procurement to purchase from small, local businesses whenever possible. Just remember that the disadvantaged business entity (DBE) criteria and certification processes can vary from agency to agency based on policies and programs, so be sure you understand if agencies are executing their supplier diversity initiatives via set-asides, adjusted bid scoring systems, or some other method.
  • Greater use of technology for everything! Public procurement teams that weren’t already using e-bidding or e-procurement systems in March 2020 had to very quickly make such investments in order to manage solicitations and contracts when teams started working remotely. Therefore, you’ll likely see more agencies telling you to set up an account in Periscope S2G if you want to see or respond to bids, as that is the online platform they’re using to publish solicitations, register and communicate with suppliers, and manage proposal actions. You’ll probably hear more agencies talk about the Periscope Marketplace, as well. It’s quickly becoming the one-stop-shop for state and local governments – and the first place that buyers look when they need goods and services. If your catalog isn’t in the marketplace and you don’t have a contract already in place, buyers won’t know to call you when they need what you sell.

Does Teamwork Make the Government Contract Dream Work?  

You should also be prepared to disclose more details about your own business when responding to requests for information (RFI) or submitting proposals. Agencies can’t afford to get burned by vendors given their tight budgets, so they may dig more than usual into business performance records, certifications, protections, and more. In fact, we suspect that vendor audits will increase in 2021 as the dust settles a bit and agencies begin to analyze the root causes of fraud and loss during the early days of the pandemic.   

 

Of course, 2021 could also bring more changes to supplier classifications and qualification criteria. Because there is no standard process for classifying or certifying DBEs across the federal, state, and local levels, many vendor qualification criteria are subject to frequent change. For example, the Small Business Runway Extension Act will take full effect and many businesses currently classified as “small” may ultimately be considered too large to qualify for a disadvantaged business entity (DBE) advantage. Then again, some state or local agencies may opt to use a different rating system to “qualify” a small business. There is also great variance in the means by which vendor validation occurs. Some states allow women-owned businesses to self-certify, while others require you to go through a third party to validate ownership. Be prepared to complete these process multiple times if you’re pursuing opportunities in multiple jurisdictions.  

  Of course, things are still evolving and only time will tell how much agencies will need to adapt procurement policies and processes to improve outcomes in a post-pandemic world. We’ll continue to keep our ears to the ground and let you know what comes up – and how it could affect you – as you prepare a government contract bidding strategy that supports your business growth strategy.