Alaska Small Business Development Center

Is The Government Buying What You Sell?

March 1, 2014

It’s no secret that market conditions in the US have been unpredictable for several years, yet as 2013 got off to a start, a new batch of Alaska businesses have sprouted and are already making their contributions to the industries they belong to. Even the government contracting field is opening new possibilities and paving the way for more small businesses to build and expand despite inferences surrounding the fiscal cliff, sequestration, national debt, the black box, and unemployment.

How do we know that? By performing market research. Assessing what the government is buying is a critical readiness factor in doing business with a local, a state, or a federal agency. Market research is an essential tool for any business, and particularly, if doing business in the government marketplace. Good market research can identify trends that affect sales and profitability. Good market research will let you know which contracts are due to expire, to be rebid or terminated and identifies your competitors. Market research tells you which agency buys your product or service. The purchasing trends of any agency are one of the best ways to get to know your customer. And, good market research is an effective use of your business development time and money.

Let’s look closer to home. It’s well known that the Department of Defense has a major impact on Alaska’s economy. In 2011, DOD awarded $3.1 billion in contracts to 740 companies in the state. In 2012, over 26,000 government contracts agency-wide were awarded to businesses throughout the state. Not all the contracts go to Alaska’s large businesses. A significant amount of contract dollars go to small business as well. While the DOD spending on projects in Alaska is expected to drop at least 18% this year, that’s not catastrophic and DOD is still a viable source of contracting opportunity for both primes and subs in 2014.Microsoft-Dynamics-SharePoint-for-Government-Contractors

Looking past DOD, do you know what other agencies are doing business in Alaska? With 40% of Alaska’s economy based on Government spending, there may be opportunities contractors are overlooking. For example, Federal Highways spent over $58 million and NOAA over $33 million in the state last year. What were they buying? What purchases do they have forecasted for 2014? Each agency is required to post their spending forecasts and you can find that information by going to an individual agency’s website and keyword search “forecast.”

The federal government may be the world’s biggest buyer, but in FY 2013, the Division of General Services issued over $19 million in contract awards. The state of Alaska purchases all kinds of equipment, supplies, services, and construction that afford Alaskan businesses an excellent opportunity for growth and better long term stability. State government purchasing regulations are typically less restrictive. Competitive bidding is the norm on larger contracts, but many contracts and purchases orders up to $50,000 are awarded simply by negotiating with known vendors in compliance with existing state regulations. Several preferences apply to all State of Alaska procurements, regardless of their dollar value, except when restricted by federal regulations. The Alaska Bidder, Veteran, and Offeror preferences are the three most common preferences involved in the State of Alaska procurement process.

The Alaska Procurement Technical Assistance Center (PTAC) provides businesses with the training and tools needed to compete and perform successfully on federal, state, and local government contracts. Visit the website to learn when the next “Market Assessment Opportunities: What does the Government Buy?” workshop is being offered at www.ptacalaska.org.

 

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