News & Events

Federal Procurement Delays Impacting Contractors


Whether from industry press and Federal contracting conferences or our ongoing discussions with industry participants and their advisors, there is much discussion about the impact of procurement delays on contractors from a financial performance, strategic planning, and business development perspective.  However, how significant are the delays caused by overwhelmed procurement offices, bid protests, or a mix of both?  And further, how are contractors adapting to remain successful?

For question one, we utilized GovWin IQ’s database of $500+ million Federal procurement awards from 1Q10 to 3Q13.  We determined the timeframe from solicitation to award, using the first contract issued date in the case of multiple awardee vehicles.  The data indicates a notable increase in the time to award starting in 1Q11, and remaining at elevated levels through 3Q13.  In 2010, the median procurement took ~8.2 months from solicitation to award.  This number has grown to ~10.9 months today.  This is more than a 2.5 month increase to award timing for agencies’ largest procurements.  These stats provide context to the struggles of procurement offices, and the impact of increased competition and the growing number of bid protests.

There is no silver bullet to navigating elongated procurement timelines amidst Federal budget challenges, as demonstrated by the various approaches companies are taking to grow, or more often maintain, topline results.  Some companies have shifted toward more of a rifle shot approach, bidding only the highest probability procurements and keeping a tight grip on valuable bid and procurement dollars to help their bottom line.  Others have reacted differently, electing to play the numbers game with a perspective that, due to increased competition, no win can be certain.  In either case, a robust yet disciplined and efficient business development approach is paramount.

Regardless of strategy, these delays are creating real challenges for contractors large and small, and especially those that may be considering or pursuing a potential sale.  Maintaining strong financial performance and momentum throughout an M&A process is one of the key lynchpins to success.  Delayed procurements can impact a company’s ability to meet forecasts, and may also impact buyers’ perception of its business development processes and strategies.  Perhaps the only sure thing is that contractors must pick a strategy they believe in, focus effort on building consensus throughout their organization, and most difficult of all, execute on it.

Contributors: Marc Marlin and Robert Dowling