Deltek announced the release of the 13th Annual Deltek Clarity Government Contracting Industry Study last week, it aims to identify and share the current trends and market outlooks in the government contracting (GovCon) landscape for 2022 and beyond.
After collecting survey responses from over 650 members of the GovCon community, Deltek has revealed their findings to help contractors address the biggest challenges impacting business development, risk management, financial compliance, manufacturing, contract management & procurement, human capital management, and IT professionals.
The results from this year's Deltek Clarity Government Contracting Industry Survey are in, and they paint a pretty interesting picture, it showed that government contractors rose to the challenges brought on by the COVID-19 pandemic. As respondents dug into the past of 2021, many revealed that their businesses outperformed financial expectations and managed better than originally anticipated. Over 48% of respondents reported higher sales growth while 47% reported an increase in the number of government contracts won over the past year. However, many also expressed significant challenges due to increased competition, labor shortages, and the increased need for digital transformation to keep pace with the changing requirements.
The pandemic fostered opportunities for some government contractors, yet others found themselves looking for alternative revenue streams from the government, as it was hard to stand out in a crowded industry. New funding opportunities, shrinking General Services Administration contracts, the labor shortage, digital transformation, and supply chain disruptions were identified as key factors in driving more intense competition. In fact, one in three respondents perceived increased competition as a mission-critical challenge.
The challenges companies reported include growing in headcount while facing increased competition, citing business development and digital integration of functions as key areas of growth and investment.Kevin Plexico, Senior VP, Information Solutions at Deltek
After this year’s surveys and information collection, Deltek also revealed that business development has emerged as a critical investment area for the GovCon sector and diversification among new markets has been used by federal organizations to drive organic topline growth.
Lastly, Deltek noted that the manufacturing sector, a critical growth area is undergoing digital transformation efforts with more than 60% percent of respondents mentioning supply chain issues as one of the greatest challenges and concerns as well as the complexity to emphasize the need for advanced technology and contract management integration.
The Top Three Priorities for Government Contractors in 2022
Three priorities rose to the top as government contractors decided what impacted their business the most. Let’s explore the top three overarching priorities a little deeper, read on to see what we uncovered in this year’s study.
1. Fierce Competition Heating Up - Struggling to identify and capture the opportunities in the market
2. Complication only became more complicated – Difficulty implementing digital transformation strategies and initiatives into action
3. The Talent War – Skilled labor shortages and the great resignation fueled the talent war
The pandemic drove contractors to seek alternative revenue streams, making it hard to stand out in an already crowded marketplace. As the General Services Administration (GSA) continues to consolidate government-wide contracts, businesses are looking at their capture planning strategies to seize shrinking prime opportunities. Small (35%), medium (32%), and large (23%) businesses all ranked teaming initiatives as their top priority.
For government contractors, dealing with complexity has become the norm. Many contractors are focused on developing nimble business operations, in diversified markets, to build greater resiliency as they plan for the future. Contractors were additionally challenged to become more agile due to frequent changes to project scope, funding, supply chain issues, security, and compliance requirements.
Beyond complexity, government contractors are looking at investment in business development and government-compliant business and financial systems to help get ahead of the competition and to ensure that their projects are performing at optimal levels and are on track. Kinetek can help ensure your projects are delivered on time and on budget – Contact us below to learn more.
The final hurdle contractors faced in the wake of 2021 was the Great Resignation. Labor shortages were felt across every segment with government contractors of all sizes struggling to hire and retain top talent.
To learn more about these and other report findings, join Kevin Plexico, Deltek’s Senior Vice President of Information Solutions, and Dan Firrincili, Senior Manager of Product Marketing, for a closer look at the insights and trends from this year's Clarity study in this complimentary on-demand webinar here.
This year, we heard from many businesses that although 2021 was not a superb year, results moving into 2022 were surprisingly positive with increased win rates expected.Kevin Plexico, Senior VP, Information Solutions at Deltek
Get your complimentary copy of the 13th Annual Deltek Clarity GovCon Report
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