Benefits of the Federal Government Market

There are many businesses in all sizes, with varying social economic status providing various products and services that can be apprehensive about entering the government market. True, working with the federal government carries certain risks and can take time to develop, but for companies with the long view it can also be one of the most rewarding and sustainable. Here are a few benefits the federal market offers.

Diversification

Commercial and government markets are both cyclical, but these cycles are often independent of one and other. This has been especially evident in recent years when extended economic downturns coincided with increased federal government spending brought about through events such as post 9/11 events and the Global War on Terrorism, the 2009 American Recovery and Reinvestment Act, and several devastating natural disasters. While the macroeconomic benefits of increased government spending and “stimulus” type projects can be debated, their impact on properly positioned government contractors has been much clearer. Many companies have survived and even thrived during economic downturns in the commercial sector due to their ongoing government business.

Proving Ground

Many of the products you use in your everyday life were developed or brought to market through government programs or agencies. You’re likely familiar with some of the technologies that famously originated though the space program, but there are other less visible examples in which the government customer as early adapters developed new markets for new products. In addition to dedicated research activities such as the National Laboratories, and the Defense Advanced Research Projects Agency, most agencies sponsor programs in their operational budget that test, evaluate, and make recommendations on new commercial technologies. An example is GSA’s Green Proving Ground program (GPG), which selects new commercial building technologies for installation and testing within federal office buildings. By taking advantage of these programs, today’s federal government contract may be tomorrow’s marketplace game changer.

Profit

There is much more to government sales than the lowest bid. Yes, government procurement regulations encourage reasonable competition, but many lucrative contracts are awarded on a “best value” criterion, which place greater emphasis on technical expertise, lifecycle costs, delivery terms, or past performance than on price. Companies that offer and deliver comprehensive value based on the customer’s mission and resources are more successful than low bidders. The government may also prove to be one of your fastest paying accounts. Properly submitted invoices are payable in 30 days or less, and government contracts can be collateralized for commercial financing. Not surprisingly, some of the most profitable U.S. companies such as Lockheed Martin, General Electric, and Google are also some of the nation’s largest government contractors.