Positioning to Win Federal Business

Survey Report
April 2009

Contents

Study Methodology

Respondent
p
Profile

Study Highlights

Business Climate

Business Capture and Marketing Best Practices

Strategies for Continued Success

2009 Government Contractor Study Methodology

z

Five 45-minute, in-depth telephone interviews were conducted with key corporate,
business development
development, and marketing decision makers
makers, which informed
questionnaire development.

An online survey of 228 decision makers and influencers from companies serving
the federal government was completed from February 24 March 9
9, 2009
2009.

Survey invitations were extended to Washington Technology subscribers, and

Market Connections house lists.

The study sample afforded a margin of error of 6.5% at a 95% level of

confidence.

Due to rounding
rounding, graphed totals may not equal 100%
100%.

Respondent Profile

Key Business Activities and Job Functions

Note: Multiple responses provided

5
Source: 2009 Government Contractor Study

Organization Size and Classifications

Note: Multiple responses provided

Source: 2009 Government Contractor Study

2008 U.S. Revenue

7
Source: 2009 Government Contractor Study

Revenue Sources
z

Respondents stated that the plurality of their revenue, both in the total organization and
within their division, on average comes from Defense agencies, followed closely by
Civilian and Independent agencies.

8
Source: 2009 Government Contractor Study

Business Climate

2008 Win Rates

z

The majority of respondents

(52%) stated that their 2008
win rate was more than 75%
for re-compete bids.

Half of all respondents (50%)

won 40% or fewer new bids
in 2008.
008

10
Source: 2009 Government Contractor Study

2008 Contract Sales

z

The majority of respondents (84%) sell to the government as both prime and sub
contractors; however, most respondents revenue (67%) comes from selling as a prime
contractor.

11
Source: 2009 Government Contractor Study

2009 Revenue Growth Estimate

12
Proprietary: 2009 Government Contractor Study

2008 Bid/Proposal Budget and Activity

z

The majority of respondents

(72%) stated that their
bid/
bid/proposal
lb
budget
d t
represented 10% or less of
their organizations revenue.

The average respondent

organization put in 10 task
order bids and eight other
contract bids in 2008, with
median values of $1,750,000
and $10,000,000,
respectively.
respectively

Median Number
of Bids

Median Value of
Bids

Task order on existing contracts

10

$1,750,000

Other contract bids

$10,000,000

Type of Bid

13
Source: 2009 Government Contractor Study

Anticipated 2009 Bid Activity

The majority of respondents (71%)

expected bid activity to increase in
2009.

Respondents who reported lower win

rates in 2008 were significantly more
likely to state that they expected their
2009 bid activityy to increase.

Those who reported higher win rates

were more likely to expect the same
level of bid activity in 2009
2009.

Source: 2009 Government Contractor Study

14

2009 Contracting Estimates

z

The majority of respondents (85%) expected to target both defense and civilian agencies
in the next 12 months.

Overall, a plurality of respondents expected the use of agency

Overall
agency-specific
specific IDIQs and GWACs
to increase in 2009, while GSA Schedule and the open market were expected to decrease.

15
Source: 2009 Government Contractor Study

Structure of Business Development Function

16
Source: 2009 Government Contractor Study

Top Ten Opportunities in the Next 12 Months

z

Information sharing (36%)

and cybersecurity (36%)
were selected as the top two
business opportunities over
the next 12 months.

Although chosen by fewer

respondents, cloud
computing/software
p
g
as a
service (21%) and
surveillance IT (20%) both
made the list of top ten
business opportunities.
pp

Note: Multiple responses provided

17
Source: 2009 Government Contractor Study

Top Ten Challenges in the Next 12 Months

Changes in agency strategy

was chosen as a top challenge
by more than half of
respondents (58%).

Those with higher win rates

also reported that aligning and
adapting internal capabilities to
agency requirements would be
a challenge.

Higher Win Rates

BD/Sales Personnel
Source: 2009 Government Contractor Study

Note: Multiple responses provided

18

Expectations for New Administrations Effect on

Contract Opportunities
pp
z

Respondents who reported higher win rates were more likely to view the new
administration as creating more obstacles, whereas those with lower win rates saw
more opportunities.

Expectations for the new administration's effect on contract opportunities was similar
whether respondents were considering the next 12 months or beyond.

19
Source: 2009 Government Contractor Study

Estimates of Number and Value of 2009 Contracts

z

Respondents estimated that

there will be more civilian
contracts and less defense
contracts awarded
d d iin 2009
2009.

Those with higher win rates

tended to predict fewer
defense contracts, whereas
th
those
with
ith llower win
i rates
t
more.

Respondents also estimated

that there would be more
contract dollars awarded on
civilian contracts and fewer
for defense contracts in
2009.
2009

= Higher Win Rates

= Lower Win Rates
Source: 2009 Government Contractor Study

20

Business Capture and Marketing

Best Practices

21

Roles in the Capture Management Process

BD/Marketing and Proposal

Managers were the most
common jjob functions ((86%))
reported as being included in
the capture management
team.

22
Source: 2009 Government Contractor Study

Capture Management Steps

77%

Those with higher win rates

more often reported using the
later steps of the capture
management process, such
as color team reviews and
evaluating proposal lessons
learned, compared to those
with lower win rates.

Three-quarters of all
respondents reported using
early opportunity assessments
and reviewing proposal
deliverables in their capture
management process.
process

55%

83%

58%

73%

42%

81%

56%

= Higher Win Rates

Steps for the capture process
are listed in chronological order.

Note: Multiple responses provided

Source: 2009 Government Contractor Study

= Lower Win Rates

23

Gate and Color Team Reviews

Average Number
of Gate Reviews:

The majority of respondents

stated that their gate
reviews (52%) and color
team reviews (59%) were
effective.

Average Number of
Color Team Reviews:

24
Source: 2009 Government Contractor Study

Successful Contractor Plans to Improve

Capture
p
Processes Currently
y Include
Developing New/Maintaining Existing
Relationships
p
Better relationships with existing and new
clients.

New Partners/
Expanded Targets
Extend into more contract
Extend
vehicles and relationships.

Focusing Efforts Earlier

in BD Process
Put more emphasis on the
early capture process
process.

Coordinating/Collaborating
Internally and with Partners
Close coordination of Account,
Capture/BD and Solutions
Organizations.

More Rigorous Bid Selection

Focus our best resources [on]
fewer, very large bids.

Reviewing
R
i i and
d Improving
I
i
Processes
Having an outside party evaluate our
processes to ensure we are effective
p
in all areas.
25
Source: 2009 Government Contractor Study

Budget Changes Over the Next 12 Months

z

About one-third of respondents anticipated that both their marketing and bid/proposal
budgets would stay the same over the next 12 months.

On average, significantly more respondents expected their bid/proposal budget to

increase and their marketing budget to decrease.

26
Source: 2009 Government Contractor Study

Marketing Tools Used in 2008

z

Those with higher win rates reported using print advertising more often in 2008 than those
with lower win rates, while those with lower win rates reported using email campaigns and
online advertising more often.

61%

39%

22%

67%

31%

52%

Note: Multiple responses provided

Higher Win Rates

Lower Win Rates

Source: 2009 Government Contractor Study

27

Changes in Use of Marketing Tools in 2009

z

At least half of all respondents reported that they plan to increase use of direct selling, their
company website, white papers and peer-to-peer facilitating in 2009.

Respondents who reported higher win rates planned to use the same number of email
campaigns in 2009, whereas those with lower win rates planned an increase in this area.

Higher Win Rates

Lower Win Rates

Source: 2009 Government Contractor Study

28

Changes in Use of Marketing Tools in 2009

continued
z

Those with higher win rates reported that their use of online advertising and
direct mail campaigns will stay the same in 2009.

Those with lower win rates planned to increase online advertising and direct mail
campaigns.

Higher Win Rates

Lower Win Rates

Source: 2009 Government Contractor Study

29

Strategies for Continued Success

30

Understanding the Needs of the Federal Market

z

Nearly three-quarters of
respondents (71%) used
opportunity
t it tracking
t ki
databases, such as Input
and FSI to help them
understand the needs of the
f d l market
federal
k t in
i 2008
2008.

Thirty-two percent of
respondents (32%) reported
using custom primary
research, such as online or
telephone surveys and focus
groups.

31
Source: 2009 Government Contractor Study

Successful Contractor Plans to Position for

Success in the Next 3-5 Years Currently
y Include
Maintaining/Building Client Relationships
Continued in-person interaction with current and
potential customers...
Client Satisfaction.

Marketing
M k ti and
d Branding
B
di
Market [our] technology strengths and
innovative, cost effective solutions.
Direct marketing to customers.
Developing and executing a well designed
marketing plan for the federal space

Hiring/Retaining Qualified Personnel

Recruiting and retaining knowledgeable
managers to market to targeted agencies.
agencies

Diversifying/Expanding Offerings

strategic hires.

Move into new service areas...

Diversification

32
Source: 2009 Government Contractor Study

C t t IInformation
Contact
f
ti

Market Connections, Inc

14555 Avion Parkway
Parkway, Suite 125
Chantilly, VA 20151
703.378.2025
www.marketconnectionsinc.com

33