Growing Your A&E Firm's Public Sector Business

Posted by Jon Bornstein on September 14, 2015

Budgeting Architecture and Engineering Projects

Projects with state, local and federal agencies are key targets for many A&E firms. This blog post provides leaders with strategies to build or expand this sector of your business.

The Public Sector Opportunity for A&E Firms

State and local (S&L) architecture, engineering and construction (AEC) services account for $391 billion annually across the U.S.  At the federal level, the number is $35 billion.  Collectively, the public sector represents 40% of the total U.S. market for AEC projects.

Because S&L funding in these markets closely mirrors the economy, firms have good reason to be optimistic. In addition to the post-recession growth, investment cuts in the last decade mean there’s pent-up demand for infrastructure projects.  And while federal spending in the past few years has been challenging and disappointing, spending on infrastructure is down, but ticking up again.

This is borne out by the 36th Annual Deltek Clarity A&E Industry Study.  According to nearly 400 firms, two of the top three markets they’re expecting to grow in the next 18 months are Water/Wastewater/Storm Water and Roads & Bridges.

 Market positions

Targeting the Public Sector

In a recent webinar, Deltek’s experts shared five keys to growing your public sector business. We’ve summarized these below and added a bonus tip for our readers.

  1. Define Your Market

    Scatter-shot approaches don’t work –decide early on where you want to focus your efforts in terms of geography, market segments and level of government. 

  2. Align Your Business Development to Long-Term Growth Areas

    Your target markets should align with where the money will be.

    At the Federal level, while there’s been a decline in defense contracting, there’s a notable increase with civilian agencies.

    While highways are mostly funded by the federal government, State & Local projects are dominated by highway, bridges and ground transportation.  This is driven in large part by population growth.  California and Texas as well as the Northeast and Mid-Atlantic areas are poised for significant growth.

  3. Assess Your Gaps & Competition

    It’s essential to develop a capability matrix across your market sectors and geographies to cross-reference this with your competitors.  As part of this process, look at pre-qualification requirements and selection criteria – can you contend?  Score your hot spots and identify where you’re most likely to succeed.

    Don’t forget to consider your partners and where you have existing relationships.  If you have weakness, these can potentially fill in the gaps.  This consideration should be reciprocal.  

  4. Pick Your Targets

    Federal, state and local projects each require a different set of skills, experience and requirements.

    At the federal level, there’s an extensive set of acquisition rules. There’s a cost of doing business, and you need to decide if that makes sense for your firm.

    The goal of local governments is to drive area development. Accordingly, they often want to work with firms that have a local presence. Many times, there’s a pre-qualification requirement.  If you don’t have it, it can be a huge disappointment to find the ideal project only to realize your firm didn’t
    do the necessary upfront leg work.

    Capability matrix
  5. Build Your Plan & Pipeline

    First and foremost, someone has to own the plan – otherwise, the best ideas won’t materialize into results. With that clear, lay the necessary foundation (note the pre-qualification requirements mentioned previously) so you are ready when the right opportunity comes along.

    There are a wealth of transparent resources to help build your pipeline, including public meeting minutes, bid notices and capital improvement plans.  You can get competitive intelligence through big tabulations, allowing you to see who’s bidding on which projects, who’s on the team, how they’re pricing themselves, and client feedback on those proposals.  Many clients also allow you to review all submitted statements of qualifications and proposals so you can see what your competition is proposing and how they were scored by the client to better understand what is important in the selection process.

    The public sector can be daunting. The key is to leverage every piece of insight possible to ensure you’re pursuing the right business. And, having project managers, business development professionals and marketing teams work collaboratively to ensure you have a complete view of the project opportunity.

  6. BONUS: Compliance is key
    Staying compliant with FAR and making sure your firm’s processes meet DCAA regulations will help ensure your business is set up to work with the federal government. If you aren’t familiar with what this means for your firm, find out what is required and how to make sure your firm is in compliance.

Learn More

There’s significant expertise to help your firm build or grow its public sector business.