Data analysis is playing an increasingly important role in government contracting business development, and will continue to do so in the future.
Over the course of the last decade, companies have increasingly recognized the impact that data can have on their operational efficiency.
In a recent McKinsey survey, nearly 50% of respondents reported that data and analytics have fundamentally or substantially changed the way their sales and marketing departments operate.
The emerging practice of utilizing data and analytics for process improvement is unsettling to some, though. According to a New Vantage executive survey on the subject, 46.7% of executives fear disruption from companies that use data to remain agile and hyper-competitive.
These statistics raise a few questions:
- What does this mean for your government contracting firm?
- Can you use data to achieve the same transformations seen in private sector organizations?
- What kind of data is useful to your company, what data is available, and how can this data be leveraged to improve business outcomes?
In this article, we’ll take a look at data’s role in government contracting. We’ll reflect on how data has been used in the past, analyze its contemporary applications, and project how it can be leveraged in the future.
Not-So-Good Ole’ Days: Data and Government Contracting in the Past
It goes without saying that government contractors, even in the recent past, were not operating with anywhere near the scope of data available to companies in the market today. Not only were records unavailable in electronic form, but agencies had no directive to report anywhere near the amount of data on their procurement process that is now mandated.
The federal government only realized the value of mandated reporting of contract actions in 1974, when the Office of Federal Procurement Policy Act was passed with the goal of generating transparency in the procurement process. The office published its first report on government acquisitions in 1980.
Prior to this time, if contractors were looking to identify trends in acquisition by department or agency, the data just wasn’t accessible.
Timely reporting and categorization of data has also been an issue in the past. Before the advent of electronic reporting requirements, delays in the reporting process rendered data from the reports ineffective in identifying trends and opportunities for government contractors. It was not until the roll-out of the Federal Procurement Data System (FPDS) that the government acted to create a web-based, searchable database that allowed government contractors to slice and dice acquisition data.
Another factor that limited the ability of government contractors to use data to improve their capture processes was a lack of software that allowed for cost-effective data analysis. Given the large amount of publicly available data, manually parsing out relevant information would have been too costly and time-consuming to have a meaningful impact. As we will see shortly, this is a problem that is certainly being addressed in today’s technological environment.
Data in the Modern Contracting Environment
Recent years have seen incredible data growth both in availability and quality, and that trend is expected to continue. As the cost of digital data storage plummets, the total data generated and stored is expected to double every two years.
The government is taking advantage of the ease of storing data by enacting measures to ensure that data relevant to civilians, watchdog groups, and contractors is abundant and accessible. With FPDS-NG providing updates on contracting data, you now have access to knowledge of the current acquisition environment that would have been a fantasy 20 years ago.
A range of both government and subscription-based websites offer easy access to government opportunity data as well. FedBizOpps is the primary platform for government buyers to post solicitations and contractors to respond to them. And software platforms such as GovWin, GovTribe, BGov, and Govini offer market intelligence based off of publicly-available opportunity data.
The aforementioned resources allow you to filter through opportunities by contract size, NAICS code, or many other variables. It is certainly convenient to have access to all of these opportunities, but the problem has now shifted from not having enough data to information overload. With all these database resources and market analytics available, the issue now is not in the accessibility of data but rather its application.
Contractors are also using customer relationship management (CRM) software to manage their business development data. Platforms like Salesforce and Microsoft Dynamics CRM allow you to maintain contact information, log business development activities, and track your opportunity pipeline.
While these are excellent data repositories, they fail to fully leverage the data that’s being collected.
First, they do little to help you predict the probability of winning a contract and don’t correlate business development activities to PWIN.
They also don’t help you analyze what processes are truly effective and identify what doesn’t work.
In short, these platforms fail to provide predictive analytics (more on this soon).
Fortunately, advancements in data and predictive analytics are changing the way we use and value data. These advancements will pave the way for savvy government contractors to outperform competitors by gleaning insight that is currently unavailable.
Data’s Bright Future in Government Contracting
The future of data in government contracting relies on two fundamental aspects: increasing the availability of data and utilizing this data effectively.
Fortunately for contractors, it appears that the government is working hard to increase data availability.
By passing the OPEN Data Act in 2016, Congress has officially recognized the need for public accessibility of the data that you can rely upon to improve your acquisition processes. While the act does not only apply to contracting data, it is indicative of a growing attitude that access to data is good for the general public and the government itself.
The Open Data movement has already resulted in searchable, web-based resources provided by the government that provide useful data to government contractors.
USASpending.gov is a centralized repository that provides information on how the federal government spends it money. Reports can be simply generated and spending data can be accessed via an API (application programming interface) for external analysis.
Data.gov is another recently launched site that provides over a quarter million searchable datasets. While not specifically related to federal spending, you can perform trend analysis on healthcare, manufacturing, or other industries that may be relevant to your expertise.
And the government continues to build tools that provides more and more helpful data to the general public.
Still, the question for government contractors remains – how does a company extract tangible benefits from the wealth of available data? The answer: predictive analytics.
Predictive analytics is a branch of analytics that uses contemporary data to predict future outcomes. Relying on advanced techniques such as data modeling, machine learning, and artificial intelligence, predictive analytics can turn big data into valuable intelligence.
It will be possible to look at publicly-available procurement data to identify opportunities that have the highest potential for success for an individual contractor. And this goes beyond simply filtering by NAICS and PSC codes. You can run regressions and other statistical analyses that will help you to select opportunities that best fit your core competencies so you can focus your BD efforts.
That same data can also be used to identify the most likely competitors for opportunities. It would be a management decision whether to aggressively go after that contract on your own, attempt to team with another firm to pursue, or abandon the proposal and look for opportunities where there is less competition.
The power of predictive analytics could be turned inward as well.
Internal data gathered through both successful and failed proposals might very well provide insight into factors that are critical to improving PWIN.
You’ll be able to analyze historical process data to identify what business development tasks were important to increasing PWIN, what past performance projects were most relevant to which opportunities, what key personnel had the most influence over contract wins, and much more.
So what does this mean for you?
The possibilities are seemingly endless. The technology to perform these kinds of analysis is here today, it’s just a matter of when you’ll take advantage of it to improve your business outcomes.
We know firms who have leveraged data in their capture processes to garner win rates of over 90%. That’s pretty amazing.
Filtering of procurement and opportunity data with spreadsheet tools like Excel or Google Sheets is just the beginning. The real value comes when you set up the systems and processes to truly take advantage of this data.
How are you using data in your BD and capture processes? We’d love to hear from you.
In future posts, we’ll go more in-depth into how you can apply data to improve your capture processes. Sign up for our email list below to be notified when these articles are published.