Government Business Development Findings from Deltek’s Government Contracting Clarity Study

The results of the Deltek’s 2022 Clarity Government Contracting Industry Study showed that the overall outlook for the entire government contracting marketplace remains healthy, despite the very real challenges faced by businesses. The comprehensive industry study found that a majority of businesses in the industry expects total government sales to stay constant or to increase.

In a government contracting market that is both promising and increasingly competitive, we’ve seen that many businesses are planning to grow their business and diversify their channels into new federal, state, local and education markets, often aided by business development tools to help them understand new requirements and contracting programs as well as identify relevant opportunities earlier.

In this blog, we’ve identified some of the key business development (BD) challenges facing these businesses in 2022 as drawn from our Clarity Study, as well as some of the ways forward-thinking government contractors are planning on overcoming them.

Top Challenges in Business Development for Government Contractors

When asked to rank their top three business development challenges, 15% chose increased competition first overall, and about a third ranked it in their top three (33%). This trend was primarily driven by small (21%) and large-size companies (19%). Limited BD resources also emerged as a high priority concern. Specifically, 12% of respondents ranked it first overall, and 39% placed it in their top three challenges.

For the first time in many years, a more restrictive spending environment was also expressed as a concern (12%), as the lack of progress on appropriation debates in Congress became top of mind for many. This lack of clarity into what the spending environment would be was expressed more so by large-size companies (15%) than their small-size counterparts (7%).

Below are each of the top business development challenges that our survey respondents noted that they faced, along with how highly they were ranked in terms of priority.

How Government Contractors are Overcoming BD Challenges

To overcome these challenges, businesses are taking a variety of different approaches to counteract their competition and get ahead of the game in government contracting business development. Here are a few strategies from Clarity that respondents to our surveys noted:

1. Standing Out in a Competitive Market

Gaining a better understanding of opportunities and their requirements earlier in the procurement process (80%) emerged as the most important BD initiatives across companies of all revenue sizes. Second in importance was more or better opportunity identification (78%), followed by obtaining more or better teaming and partnering methods (73%), which was of particular importance for small-size companies (86%) than it was for their large (66%) counterparts.

2. Leveraging Existing Relationships, BD Staff and Partners

Almost three quarters of respondents (73%) count on their active client relationships to win business over competitors. Additionally, two thirds (67%) rely on their business development staff to do their roles, underscoring the importance of talent. The third most common approach is to identify new pipeline opportunities through teaming partners or networking.

3. Investing in Resources to Capture More Opportunities

Thirty percent of all respondents indicated that their organizations will continue to invest in business development in similar fashion as they have done previously. However, the overwhelming majority are prioritizing growth within business development. Specifically, 65% indicated that they expect their organizations to increase investments in business development. This is true for all company sizes, which is in stark contrast with results reported in 2020, where only large organizations prioritized this type of investment.

Curious how your business stacks up against its peers and the industry's top performers in terms of overcoming these BD challenges and succeeding in government contracting? Download this government contracting industry scorecard to compare how your business measures up.

Next Steps for Government Businesses to Spark Their Business Development

In 2021 business development continued to experience challenges faced in 2020 - namely, limited resources, steep competition, and constraints in their spending ability. As our Clarity study has shown, by leveraging personnel and tools that are already in place, plus increasing their investment in prioritizing business development, businesses of all sizes are finding ways to overcome these challenges and grow their public sector sales pipelines.

Is your small business looking for more ways to build its growth strategy? Join us to review small business insights from the 13th Annual Deltek Clarity Government Contracting Industry Study. In this complimentary online event we’ll discuss why smaller government contracting firms have confidence for continued growth and learn about the challenges they’re facing that could impact their business.