Investing in the Future is the Chief Theme for Deltek Clarity Contract Management and Procurement

Posted by Annette Grotz on October 8, 2020

Deltek GovCon Clarity 2020

Making investments in contract management and procurement is a common thread to emerge from the 11th Annual Deltek Clarity Government Contracting Industry Study. Leaders in both business areas agree that a more focused and strategic approach is what’s needed to ensure the right opportunities are pursued and that all the i’s are dotted and t’s are crossed when it comes contract lifecycle management.

Because the Clarity Government Contracting Survey concluded on March 2, 2020, the results primarily pulled from the experiences of government firms in fiscal year 2019. However, Deltek’s experts also compared the findings from the 380 survey responses to the circumstances that resulted from the COVID-19 pandemic in order to offer some predictions and suggestions to help government businesses improve profitability.


Clarity on Contract Management and Procurement Trends


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Contract Management Results

All of the top challenges identified by contract management leaders are data related, as detailed during the in-depth webinar Clarity on Contract Management and Procurement Trends. Nearly half of responses (47%) point to maintaining data integrity between opportunity, contract and project records as the largest concern, followed closely by tracking non-financial aspects of contracts. Time spent entering contact information into finance or business development systems, tracking changes, and not centralized in a single system are all also top of mind for firms. And, these were all identified pre-pandemic. It is likely that contracts are already changing to align with new government missions and priorities due to COVID-19.

With 58% using shared drives as the primary tool for contract management, should there be any updates to the federal acquisition requirement (FAR) in the near future, it will be harder for firms to react quickly without a dedicated solution. According to the Clarity findings, large companies ($100 million in revenue or more) are twice as likely as medium companies and three times more likely as small companies to employ dedicated contract management software.

To address these challenges, most firms intend to change business processes (45%) and integrate current contract management software with finance systems (23%). Hiring a contract manager and investing in contract management software are also priorities.

What Procurement Leaders Report

Based on fiscal year 2019, those leading procurement within government businesses predict that over the next 12 months, transitioning to be more strategic, shortening cycle times, a talent shortage, supplier stability, and supply chain security are the main areas of concern. Small and medium business note they only have about 1.5 full-time employees devoted to procurement, and that often, the procurement team also manages contracts. Nearly half of respondents (45%) admit they are not tracking vendor performance because of this limited team bandwidth, and a quarter point to a lack of necessary tools/technology. This is a real missed opportunity because working closely with vendors and developing relationships has the potential for opening up new opportunities and markets, allowing for diversification.

Even though procurement resources are limited, leaders still to point to a handful of key performance indicators (KPIs) to illustrate effectiveness. Direct versus indirect spend (59%), days payable outstanding (48%), and procurement cycle times (26%) are the most commonly reviewed.

Explore More Results

Investing in both contract management and procurement is definitely top of mind for government businesses. By viewing each as an essential function for profitability and growth, contractors are better able to prioritize resources, like data, tools, vendor relations and internal ownership, and make management even more effective and improve the bottom line.

Access more results now! Download the in-depth Clarity on Contract Management and Procurement Trends webinar to hear takeaways like metrics to consider for measuring performance and how best to finance into contract management and procurement processes.

Still hungry for additional Deltek Clarity Government Contracting Study results? Explore the complete in-depth webinar series.

You can also download the full Deltek Clarity Government Contracting Industry Study at any time.