Newcomers drawn to fed market as telework expands

Companies that haven't considered federal markets are coming around to it, thanks to increased telework mandates, according to experts.

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As the federal government moves to increase employee telework and with some of their commercial markets narrowing, some companies that haven't considered the federal market are taking notice, according to some federal market experts and IT managers.

"The government is open for business," said Larry Allen, managing director of the Federal Market Access Group at BDO USA. "The commercial market is slowing. Companies that are sitting on the sidelines see a new market" in the federal government.

Long-time federal market watchers, including Allen, said the gravitation by companies with no federal market experience is not a flood, but the idea is becoming more attractive to some.

"You can't make the same margin" for sales to federal agencies, said Roger Waldron, president of the Coalition for Government Procurement, but with the government spending to confront the pandemic, companies are seeing opportunities.

"Some companies are banging on the door with good solutions," Waldron said.

That dynamic isn't unusual in unstable environments, said Mike Hettinger, a former senior congressional aide who lobbies on behalf of tech firms. It's also hard to gauge. Companies did the same in the financial crisis in 2008. With the American Recovery and Reinvestment Act of 2009, "people saw the government market and said, 'Wow there's a lot of revenue there.' There could be some of that this time."

This time, however, there is a specific, growing need for IT that federal agencies can use to support expanding telework mandates, he said, which could lead to more constant, long-term entry from companies coming to federal contracting for the first time.

"This is not a six-month thing. It will bring fundamental changes the same way 9/11, Hurricane Katrina and 2008 did," he said.

NASA's Services for Enterprise-Wide Procurement, a governmentwide acquisition contract vehicle, is seeing some evidence of new companies interested in signing up to provide goods and services on the governmentwide acquisition platform, program manager Joanne Woytek told FCW.

She said the GWAC has seen some new industry interests because of the new teleworking requirements -- not a stampede -- but a growing movement.

"It is hard to tell the cause of upticks in interest," Woytek said. "We have definitely had more industry interest and discussion," she said, attributing it to an outreach program to new companies that began before the crisis, a scheduled refresh of the contract and the COVID-19 crisis.

Allen, Hettinger and Waldron agreed that businesses interested in getting into the federal market have to get past the roar of COVID-19 response that's currently ringing in IT managers' ears, however.

One federal IT manager FCW spoke with said simply emailing them asking if they're interested in buying something is useless and is ignored or, worse, remembered badly.

"Send me an email and tell me that you can help customers adopt MS Teams or Zoom? Great!" they said. "Send me an email that you have a long line of toner cartridges? Pound sand."