The NIST Cybersecurity Framework and the President’s Cybersecurity Executive Order are two recently released pieces of guidance/regulation pushing this transformation. The NIST Cybersecurity Framework spells out risk management areas including conducting risk assessments, continuous monitoring, identifying the most impactful assets to the mission, implementing protections for those assets first, and more. In August 2017, the public comment period closed for additional NIST cyber risk guidance that offers a step by step process to enable agencies to identify the most critical systems and applications that must not fail or be compromised, a big step in enabling agencies to approach cybersecurity from a risk based standpoint.

While the NIST Cybersecurity Framework is voluntary guidance, portions of the budget are being tied to key concepts outlined in both the Cybersecurity Framework, NIST special publication 800-39, and the President’s Cybersecurity Executive Order. The order, unveiled in May 2017, touches on everything from the need for an agency-by-agency risk assessment to dealing with outdated infrastructure, botnets, and driving a cyber-educated workforce. With the NIST guidance as the centerpiece, the order gives government CISOs an opportunity to rally the troops across their agencies to initiate a cyber risk management process with a mindset of continuous compliance, shifting the mindset of all functions to thinking daily “is what I am doing putting my agency’s data and systems at risk?”

More recently, in July 2017, as part of the order, all federal agencies were required to submit a Framework Implementation Action Plan as well as a set of metrics that show how they are protecting their most valuable information assets from cyberattacks and breaches. While agencies have always had to submit IT security metrics under the FISMA requirements, this year the metrics shifted in focus from the bells and whistles technical aspects of their cyber security programs to risk management. For example, agencies will need to report metrics tied to the value of applications and systems that host those applications.

Along with this risk focused transformation, pushed forward through guidance and regulation like the NIST Cybersecurity Framework, NIST special publication 800-39 and the Cybersecurity Executive Order, budget wish lists must shift their focus as well. Cyber leaders must demonstrate that what they are asking for aligns with this new risk-based model. For example, instead of requesting a new firewall or other piece of technology, cyber leaders should spell out how that new technology will enable them to reduce risk to their most critical assets. Instead of asking for user and entity behavior analytics (UEBA) tools, they should describe the problem UEBA would solve in terms of risk. For example, “I lack visibility into the people who are accessing our most mission critical assets every day. I don’t know how they are behaving on the network, and therefore cannot flag if someone is putting our mission critical assets at risk. That’s why I need UEBA.”

While it is helpful for cyber leaders to tie their budget asks to compliance with the risk-based frameworks and regulation, it’s more important they tie them to continuous security. If their first objective is security, compliance should follow. It’s not the same the other way around.

So, if you’re putting together that last minute budget wish list, think risk. Ask yourself, “What do I need that will help me identify and protect those assets, that if compromised, would impact the mission the most?” And then enable those in charge of approving budget spends to view your requests with a risk based lens.

A change of party in the White House typically puts the brakes on spending at least temporarily, as agencies sort out their new priorities. This time around? Double it, with an administration that governs by tweet and a POTUS who appears to thrive on keeping agencies off balance. The chaos inside the Beltway is bipartisan and cuts across every agency not focused on security or defense.

Despite these factors, observers say, the fourth quarter of fiscal 2017 is shaping up to be business as usual. “The No. 1 reason you get cut is if you don’t spend the money that you have,” said David Berteau, president and CEO of the Professional Services Council. “So the proposed cuts give people an incentive to spend, and those forces outweigh the uncertainty.”

The spending landscape

There’s no doubt that a change in administration and attendant disorganization have complicated federal spending. As President Trump approached his 200th day in office on Aug. 7, he had nominated just 255 people for the 1,100-plus positions requiring Senate confirmation, according to a tracker kept by the Partnership for Public Service and The Washington Post. Just 51 had been confirmed.

The lack of senior leadership has made this an unusually chaotic transition. That fact, combined with the president’s tendency to fire off policy statements via Twitter, “has made the planning and execution of budgets this year exceptionally difficult,” said Adam Hughes, a director on the public sector team at Grant Thornton.

That has repercussions. “Because of the lack of political appointees, people don’t know how to move forward on programs. People are gun-shy about awarding contracts in support of programs without having a political appointee in place, knowing the next appointee could come in and want to rescind it or try to kill it,” said Jason Fichtner, senior research fellow at the Mercatus Center, George Mason University. “I am not going to stick my neck out if it’s going to get chopped off.”

The administration’s slow start has impacted more than just hiring. For much of the year, the money hasn’t been there to spend.

“When you look at the budgets, nothing became official until halfway through the government’s fiscal year. That has been an incredible challenge to leaders in the public sector,” said Mike Smoyer, president of the Digital Government Institute.

Analysts point to the continuing-resolution phenomenon as a sub-species of this complication. It’s hard to budget for an agency’s needs without an actual budget.

“The CRs essentially rejigger what you did last year. They don’t go down to the account level and actually allocate funds based on actual results and priorities. So it doesn’t allow for folks to plan. It’s just status quo budgeting, which can be paralyzing to agencies,” said Gordon Gray, director of fiscal policy at the American Action Forum.

A former Senate Budget Committee staffer, Gray sees life under CR as a stumbling block to the kind of thoughtful planning that might avert a year-end spree. “Ideally you’d have appropriations language to fund programs and missions based on deliberation and review. When you get money that doesn’t reflect that, all you can do is kind of make do,” he said.

Making do often means doing without, at least in the short term.

“If you are under a continuing resolution, you are generally precluded from signing long-term contracts. So by definition you are going to have more year-end spending,” Fichtner said. “You have to have the money in place to sign those contracts.”

Then there are the looming budget cuts, and the president’s call for a reorganization of executive branch agencies. That ought to have a chilling effect.

“If you know you are going to be forced to retire a system because the program is going away, you will be hesitant to upgrade that system. If people feel their programs are in limbo they will be reluctant to spend on those programs,” said Shawn McCarthy, research director, IDC Government Insights.

Some read it the opposite way: If cuts are coming, spend it while you can.

“The signal from OMB is that you are going to get less money, and OMB is going to be mindful of the ways that comes into practice,” Gray said. Tools like reclassification and reprogramming that have helped agency heads to shift funds in the past may not be available anymore. “That means that if you have the money now, you will want to spend it. If tough times are coming and you are going to have less flexibility, you might as well spend it if you’ve got it.”

The Q4 fallout

With all these factors at play, one might expect to this exceptional political and administrative situation to be reflected in an unusual and possibly hairy spending pattern. It seems probable that the Q4 spending spree would, like all things predictable and conventional in Washington these days, give way to something weird and exotic.

For better or worse, that’s not going to happen. This year’s Q4 contacting bonanza will likely roll out unabated. Agencies posted over 25,000 solicitations on FedBizOpps in July, a pretty good sign that the coffers are open.

Another solid indicator comes from the Q1-3 numbers provided by the Professional Services Council.

Start with 2016 for context. In FY16, for all federal civilian agencies, contract spending in the first three quarters of the fiscal year totaled $91.6 billion, or an average of $30.5 billion per quarter. Q4 contract spending was $45.5 billion or 50 percent higher than the average for Q1-Q3. That’s the spending spree.

And this year? The Q4 figures aren’t in yet, but Q1-3 buying totaled $93.6 billion — not just on par but actually up a bit compared to the prior fiscal year. Despite all the factors described above, the federal government has been doing all its shopping just as it always does, and that’s a pretty good indicator that Q4 contracting will clock in at pace.

While the spree itself appears to be on course, however, the goods themselves may vary this year. Given the vast uncertainties, experts say agencies would do well to be conservative in the kinds of buying they pursue. “It’s the functional equivalent of putting gas in the car,” Gray said.

In practical terms, agencies should buy toward concrete needs. “You need to focus on agency priorities and missions,” Smoyer said. “You focus on services to citizens, you focus on modernization and IT infrastructure.”

At the same time, agencies likely will shy away from spending that supports the initial phases of long-range programs, especially if those programs are in doubt. “As an agency head, if I don’t know whether I am going to have the budget resources to support something, I may want to put that kind of effort on hold,” Fichtner said.

“How do you spend money efficiently, wisely? You spend it on things that are the least controversial,” he said. “You spend it on technology upgrades, that is something that will last for a few years. And you spend it on training because you get that back in productivity and morale.”

Spending Spree 2017

• 25,000: Solicitations filed in July ’17
• $91.6B: Q1-3 2016 spending
• $45.5B: Q4 2016 spending
• $93.6B: Q1-3 2017 spending
• $46.8B: Projected Q4 2017 spending

What goes on here?

A reasonable person might wonder how it can be that agency spending is on track, and that Q4 will likely fall in line. Agencies are flying blind: no budget, no appointees, for many a looming sense of budget cuts to come. And yet the great doughnut machine keeps stamping out Boston crème-filled crumpets. How can this be?

In physics, inertia is described as the tendency of matter to just keep on doing what it’s already doing. That’s the story in a nutshell.

“It gives you hope for America,” Berteau said. “Most of the government program managers and the budget people and the contracting officers — they all know what their job is, they get up in the morning and do that job. They are not waiting for a memo. We are seeing a manifestation of the solidity and the perseverance and the continuity of our governing structure.”

Surely that same reasonable person might also ask: Is continuing to shove a disproportionate amount of federal spending into the last three months of the fiscal year really a national triumph?

Some say not. Analysts have for years decried the practice, saying it reflects either poor planning on the part of agencies, or else an ineffective budgeting process in Congress. Either way, they say, a Q4 contracting blitz is no way to run a government.

Fichtner encourages agencies to advocate for a rule change: They should be able to roll over unspent funds into the coming year.

“Instead of rushing their buying at the end of the year, I’d rather give them a month or two to allow them to be more careful with their contracts, more prudent in their due diligence,” he said.

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“You try to spend as judiciously as possible with the awareness that next fiscal year you might start the year without any funds. That’s always in the back of your mind,” Stacey Dixon, deputy director of the Intelligence Advanced Research Projects Activity, said Sept. 6 at the Defense News conference. “It does impact what you’re planning over the course of a year. If I could encourage anything it would be for Congress to really think about the impact you’re having on agencies with these continuing resolutions. It’s not a good thing for government, and they have the power to fix that.”

Across the Defense Department leaders have pushed to integrate innovation into antiquated acquisition systems plagued by years-long lead times. IARPA, alongside organizations like the Defense Advanced Research Projects Agency, Defense Innovation Unit-Experimental and the Army Rapid Capabilities Office all came to fruition as ways to get around bureaucratic red tape plaguing procurement.

DIUx and the Army RCO in particular are recently launched offices that rely on partnerships with other agencies and industry to achieve innovation. Under this model, DoD organizations put in some money, then industry – often venture capitalists – also contribute funds to develop a technology or capability, said Sean Singleton, DIUx director of business and marketing.

“Congress has given us great freedom to actually leverage our research and engineering and [operations and maintenance] money actually go ahead and evaluate projects on an actual deal-by-deal basis,” Singleton said. “We’ve had companies that have gone off and done $1 million worth of work for the Department of Defense then have gotten $10 million worth of venture capital because they’re working toward something that proves out their business model. So Congress has given us the financial freedom to go out and actually use that dry powder in a very judicious way, and that’s how we’re able to go to market.”

But that model could be threatened by ongoing continuing resolutions that fail to provide guidance and adequate support to program managers and decision-makers looking to field capabilities as soon as possible.

“I always think of the scene at the end of ‘The Right Stuff’ where Chuck Yeager’s just broken the sound barrier and the news reporters call him back…a conversation occurs where he says, ‘It’s funding. Funding makes those aircraft fly,’” said Col. Joe Capobianco, Army RCO chief of staff. Lawmakers maintain “a level of oversight and a level of comfort with tens or hundreds of millions of dollars. That’s real money, that’s taxpayer money. With DoD, at times, it may seem like less money at times but there’s that tension…Congress wants, justifiably so, oversight and appropriation against things that are important to them. And at the same time they’re trying to find ways to have specific amounts of money and more flexibility to allow innovation to occur.”

1. Federal Sector Spending Has Bottomed Out, With Anticipated Growth

Following years of declining spending, it is beginning to appear like this decline has bottomed out, with a growth in federal spending on the horizon. While there is considerable talk, firm steps are in motion for increased contract spending, particularly in defense, with reduced civilian agency spending. Clearly, a reevaluation is occurring from the dramatic budget cuts proposed for many civilian agencies, while the Department of Defense (DOD) will reap increases in the short term.

2. Incumbent “Win” Rates Are Down

This is due to a variety of factors, but primarily because government customers are looking for financial savings and simply do not see the “best value,” as compared to the past, in the long-term relationships and historical knowledge that have been traditionally offered by incumbent contractors.

3. More and More, Government Contractors Are Branching Out … Away From Government

Some firms are successfully branching into alternative commercial or state or local government sectors, as opposed to focusing their business solely on federal government contracting. From a business standpoint, it makes sense that firms would attempt to diversify their portfolios when one significant part of their business is in decline, which the federal sector has been for over five years.

4. The Job Market Is Improving … But Filling These Positions Is Becoming More Difficult

Today, there is an improved acquisition job climate, but organizations are having difficulty obtaining talent. Companies are hiring—particularly for highly skilled positions in cyber, technology, and acquisition…if they can find talent to fill them, that is.

5. The Use of OTAs Is on the Rise

DOD’s Defense Innovation Unit Experimental (DIUx) has rediscovered “Other Transaction Authority” (OTA) agreements, and the use of OTAs as an alternative to traditional contracting is increasing. However, whether long-term cultural changes, along with significant time or money savings, are resulting from the increased use of OTAs over traditional Federal Acquisition Regulation–based contracts is not completely clear.

6. Category Management Continues in the Form of Contract Vehicle Consolidation

The impetus provided by the last administration for category management continues. One need only look at how governmentwide acquisition contracts (GWACs) and the Federal Supply Schedules are used against new standalone awards to see how this is taking shape. However, this begs the question: How many contracts is “enough,” particularly under a shared services model?

7. Reliance on Cloud-Based Services Is Increasing

There is now an increased reliance on cloud-based services, with a corresponding decrease in reliance on centrally-owned and operated computer hardware. Bottom line — agencies don’t want to own and maintain IT equipment that takes too long to acquire, grows out of date too quickly, and continues to drop in price. The uniqueness of agency needs and their security requirements as important considerations appear to be losing ground as these services can be further commoditized.

8. There Is a Wider Prevalence of Technology Tools From Requirements to Acquisition

Wherever we look, new tools and products are coming to market, intended to make our lives easier. This certainly impacts the nature of the requirements being developed, as well as the process in which their acquisition is conducted. From analysis, reporting, and meeting overall needs, technology is becoming ever more the “disruptive” factor for all of us today.

9. Some Form of Further “Acquisition Reform” Is Inevitable

From the hallways of Congress, to the Section 809 Panel (and other panels), to the implementers both in government and industry, everyone acknowledges things must change. However, everyone “owns” this problem, and as such, it will take the entire community to address it. From the practitioners to the legislators, all will need to make compromises or the conversation will simply continue for years to come.

10. Acquisition Skill Sets Are Merging

As the complexities of the process and the technology available to meet them increase, today’s contract managers wear many hats. They are increasingly performing the duties of project, supply chain, cost, proposal, and subcontract managers. Operating within the environment of an entire acquisition team raises existing skill needs, but simultaneously creates efficiencies. The new Contract Management Body of Knowledge (CMBOK) is reflective of this reality.

It has been a tumultuous year. In many ways, acquisition has been on pause, as priorities of the new administration and controversy take center stage. When federal leadership eventually gets back around to acquisition, this list may change. In an outsourced government, nothing is more important than to deliver services to citizens effectively.

Michael P. Fischetti is the executive director of the National Contract Management Association.

That’s the philosophy many federal agencies adopt in Q4 as they look to spend their remaining contracting dollars before they disappear on Oct. 1.

According to reports on U.S. government spending, federal agencies spend nearly a quarter of their contracting funds in August and September each year. With FY17 coming to a close at the end of September, it means there is once again a timely opportunity for businesses to land a government contract during this high spend period.

For businesses looking to bid on contracts at the end of the government’s fiscal year, below are some tips to help your business strategically pursue contracting opportunities this summer.

1. Start with your existing relationships

With the fiscal year ending, one of the smartest places to start seeking out new opportunities is with agencies that have already awarded you contracts. Reach out to the representatives on existing contract work to see if they have any purchasing needs for the end of the fiscal year. After all, agency contacts who already know and like your work are more likely to award you a contract.

If there are other relationships you’ve been nurturing that have yet to produce a contract, this is a good time to rekindle a conversation. Check in and find out what agency contacts need and offer specific suggestions about how you can help. A year-end contract could be a foot in the door for future work.

2. Make yourself visible to agencies

Get on the radar of key agency contacts by making sure your business is properly registered on SAM. For small business contractors, consider expanding your capabilities into other databases such as Dynamic Small Business Search, DSBS, to extend your footprint. Also be sure to set up automatic contract alert opportunities on FBO.gov. Set a calendar alert to quarterly review your information for accuracy and any new updates.

Check that all the required NAICS (e.g. industry and economic sector) codes and any additional applicable certifications (e.g. 8(a) and WOSB) and are listed in your profiles on the databases. Both are critical to the process of finding and securing a contract as procurement officers can use these to search for specific types of businesses.

3. Gain advantage with teaming

Once you’ve identified an opportunity where your goods or services might be needed, seek out teaming partners, both large and small businesses, to strengthen your bid. Whether you’re finding new partners or reconnecting with old ones, teaming up with a more experienced contractor can help your business gain credibility with federal agencies. In addition, teaming with a business who has different capabilities can help broaden the contracts you are eligible for. This is also a good time to connect with large businesses who are looking for subcontractors.

4. Let the professionals help

Whether you’re seeking teaming partners or contracting opportunities, there are procurement assistance professionals at the local, regional, and federal level who are ready to help. As a government contractor, I regularly connect with procurement professionals in my area. As a result of our strong relationships, they have alert us about specific bidding opportunities, provide guidance on agency procedures and invite my team to events.

If you’re a small business, you’ll find small business procurement assistance professionals in an agency’s Offices of Small and Disadvantaged Business Utilization (OSDBU). You can also reach out to Procurement Contract Representatives (PCR), which are located in most SBA local regional offices. Make sure to introduce your companies’ capabilities to your local PCR, they are a valuable resource to obtain contract activity in your home town.

For businesses of every size, the Association of Procurement Technical Assistance Centers (APTAC) provides helpful resources online and in their 300 local offices around the country.

5. Refine marketing materials to stand out on paper and at events

Whatever path you take to pursue new government contracting opportunities, clear and concise marketing materials and messages will help busy buyers get a clear view of your business.

I recommend attending agency events regularly to build relationships and learn about procurement needs. To prep for these events:

• Position yourself as a problem solver: Differentiate your business by showing how you can help an agency solve a specific problem.
• Do your research: Take the time to gain in-depth agency knowledge prior to the event. Understand the agency’s missions and goals prior to your meeting.
  
• Practice, practice, practice: Perfect your elevator pitch and look like a professional.
  

GovEvents curates an easily searchable calendar of agency events that you can search by location.

Before events, use LinkedIn to connect with management-level employees at many federal agencies and present your business. Updating your profile and researching new contacts can go a long way to building important relationships before you meet in person. Plus, if you have some additional marketing budget, you can create LinkedIn ads that target buyers directly.

Looking ahead

Hopefully your efforts will result in additional projects from 2017 budgets, and if not, don’t get discouraged — the work you put in now will not be wasted. All the marketing work, contacts made, and research you do today will give you a head start on next year. And fortunately, the federal budget outlook for FY18 spending looks strong, with spending priorities looking similar to 2017. For more insight on end of year spending and contracting opportunities, visit USASpending.gov and FBO.gov.

Lourdes Martin-Rosa is the president of Government Business Solutions (GBS) and the American Express OPEN Advisor on Government Contracting. Since winning its first contract from the U.S. Department of Homeland Security in 2009, GBS has worked with numerous federal agencies including the U.S. Department of Energy, U.S. Department of State and the U.S. Department of Defense.

During a panel discussion at the annual 930Gov end-of-year conference, Casey Kelley, director of the General Services Administration’s Alliant GWAC, said agencies should plan for this months before the fourth quarter arrives. When that’s not possible, it’s important to have strong relationships with internal contracting shops, as well as GWACs and other government buyers, he said.

Related: New database shows prices paid on Alliant contracts

“If they have to do it quickly, my recommendation would be for the end user at the agency — if they haven’t yet — to quickly build rapport with their 1102s, their contracting shop,” Kelley said. “Understand what their workload is, understand what they’re looking for in terms of a defined requirement, assistance with developing source selection and evaluation criteria, any insight in terms of what that requirement is and what kind of market research they’ve done to assist the 1102. Anything to help that contracting officer who now has the pressure to sign their name and execute on behalf of the government.”

The September spending spree has become the norm for federal contracting, according to Deltek analysts who broke down monthly awards for the last 10 years. On average, agencies have spent 17.6 percent of their budgets in September for the last five years, compared to between 7 and 9 percent throughout the year.

More: Prepare for September spending spree

That trend holds out on the Alliant GWAC, according to Kelley.

“September is our busiest month of the year,” he said, noting agencies spent $697 million on 29 task orders in September 2014, $865 million on 24 orders in September 2013 and $1.9 billion on 38 task orders in the last month of fiscal 2012.

Based on sales to-date this year, Kelley conservatively estimated about $500 million will be ordered off Alliant this September.

Kelley also noted there tend to be fewer total task orders in September with higher dollar values on each.

More: 5 technologies for your year-end spending

Getting effective competition with a shortened lead time requires preparation and coordination with agency contracting shops.

“We’re always, even at year-end talking about relationships … What type of a relationship do you the agency buyer have with your contracting shop?” said Larry Allen, president of Allen Federal Business Partners. “As a buyer you have to understand whether or not your contracting shop has the expertise and bandwidth to do what you need it to do in the timeframe in which you need it done.”

“Those who have that rapport work well and are effective,” Kelley agreed.