Government Spending Trends In Alaska

USASpending.gov reports that since 2010 there have been a total of 71,453 contract opportunities valued at over $10 billion dollars awarded in Alaska. But the trend has been a declining one, with spending going from $2.5 billion in FY2010 to $1.3 billion in FY2014. That’s a significant spending reduction in a state that depends largely on government spending to make ends meet.

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So how do you stay in the game? Staying competitive in a diminishing market requires agility, clear thinking, and a will to work harder than your competitors. Understanding the cause of a downturn and the impact it has on government spending is critical to continued success when the flow of opportunities slows to a trickle. That means understanding the market. It means being willing to adapt. Below are some statistics that may help.

How Are They Buying?

The first order of business is understanding how the federal government does business. As shown in the chart below, agencies in Alaska prefer Firm-Fixed-Price (FFP) contracts by a wide margin. How does that impact your “spend?” In other words, how well do you know your company’s cost of doing business? Are you on top of those costs, or are they on top of you and weighing you down in today’s competitive marketplace?

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Where Are They Buying?

Next on the list is where the money is being spent. If you live outside the major metro areas surrounding Anchorage and Fairbanks the number and size of opportunities diminish. This leads some to think that federal contract opportunities in their region don’t exist. However, a little research shows that even in remote parts of Alaska opportunities do exist. The problem is identifying the who, what, where, and when, and learning how you can position yourself to take advantage of them.

Federal prime contract opportunities are only part of the picture. There’s a derivative economy in many regions of Alaska funded through federal, state, and local spending, an economy that may afford opportunities you haven’t considered. That’s another reason to contact Alaska PTAC. Our experienced staff can help you get the lay of the land regardless of where you are in Alaska, and help you make the most of the resources available.

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Doing the Math

Nearly 40% of federal opportunities available in Alaska are set aside for small business. That’s a remarkable record considering the federal small business utilization goal is 23%. As the chart below indicates, federal agencies in Alaska are doing quite well in putting small businesses to work.

Equally important, however, are the “hidden” opportunities not set aside for small business. To position yourself for these opportunities it is critical to cultivate good relationships with prime contractors, your local SBA and PTAC, and industry organizations. That will help you be in line to take advantage of available subcontracting opportunities. It’s equally vital to learn how to compete on larger acquisitions. The key to success in this area is developing strategic partnerships through teaming, sound market strategy, and by demonstrating a willingness to compromise and adapt. These factors  are critical to your success.

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Making the Most of Your Opportunities

Last but not least in the public sector market, and closely related to the subcontracting and teaming opportunities mentioned above, are the many programs available to help you level the playing field. These are the socio-economic programs administered by the federal government. HUBZone, women-owned small business, the 8(a) program, and others expand the possible prime and subcontract opportunities available to you. Call to learn about these programs and see whether you might qualify.

The chart below shows the relative number of contract actions by category. Notable is that while there were almost twice as many awards to women-owned small businesses than to HUBZone firms, the overall value of those awards was significantly less, indicating much smaller value awards going to women-owned firms. The second chart indicates the relative dollar value of awards to each category.

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In State Spending

No record of spending would be complete without referencing state and local spending. While federal spending has declined significantly in recent years and more contractors are competing for less work, spending by state and local agencies has steadily increased. The $15.5 billion figure for FY 2014 in the chart below represents $10.1 billion in state and $5.4 billion in local spending across all sectors. The message?There’s more opportunities for you as a prospective government contractor in Alaska than you might imagine, and the Alaska PTAC can help you find them!

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The Hidden Economy

The record of government spending in Alaska wouldn’t be complete without reference to the billions in federal funds that flow through federal, state, and local agencies via grant awards. While not “government contracts” in the strictest sense, these awards are nonetheless government money being funneled into the state through HUD, BIA, EPA, the Departments of Energy, Education, Health and Human Services, and others. As the chart below depicts, grant awards in any given year contribute a significant amount to the state’s economy, especially in rural areas, and can generate local and regional contract opportunities outside traditional avenues of government procurement spending. Note that grant funding of in-state programs sometimes outstrips federal procurement spending by a considerable margin.

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