A presidential election always has a dramatic effect on the volume of proposal releases. Activity usually slows down considerably 10 – 15 days before the election. If a new president is elected, one can expect a brief increase in solicitations towards the second fiscal quarter as the out-going president and agency political officials seek to solidify their favored programs. However, then there will be a clear slowdown in proposal activity for probably 6 – 9 months or possibly more. This is because the new president needs time to bring onboard the senior political appointees who approve the programs and set priorities. But even if an incumbent president wins another term, there is still an observable slowdown lasting a two or three months while many of the executive appointees leave and are replaced.

At present, most observers predict that the incumbent president will win the election. If so, then we should see the short slowdown scenario. If his opponent instead is elected, then we should expect the longer slowdown to take place.

Savvy federal marketers believe the effect of the sequestration, even if it does go into operation, will not be as extreme as some observers fear. Granted some DoD contractors could be seriously affected and areas with large numbers of DoD contractors may see significant spending reductions with significant lay-offs. With that said, however, even if there is a 10% reduction in the $500 B annual government-wide spending on goods and services that still leaves $450 B of programs to be procured in the current fiscal year!

The enactment of the fiscal year 2013 appropriations will likely have a stronger effect on the volume of RFP releases than will the impact of sequestration. In some unusual years, the congress approves most of the 12 major appropriations bills as early as the fall. In other years, the process stretches into January or even April, as was the case in 2010. This is important, because the procurement groups can’t release new program RFPs before there are appropriated funds to pay for them. So business is necessarily slower until the appropriations levels are clear.

Some lobbyists and marketing executives believe it is likely we will have appropriations for 2013 enacted through a Continuing Resolution (CR), meaning authority for agencies to spend at the same rate in the new fiscal year as the last year, unless Congress modifies the spending rates — either up or down. But the burning question is, how long will the CR last? Will it be a 1-month CR lasting through October only? Will it cover first fiscal quarter — through December only? Will it go through March with allowances for sequestration starting in January? Or will it cover the entire year? Could there be a CR for some agencies and a “regular” appropriation for others?

What we probably will NOT see is a repeat of 2010 where congressional wrangling caused the final appropriations for the year to delay into April before being finally completed. Congress got too much of a black eye with the voters over their unseemly behavior to repeat such brouhaha.

The recession further complicates an already complex story. Anyone who watches the news can see the growing chorus of analysts predicting a second dip in the recession. What if there is a renewed recession? Usually recessionary economics does not effect federal spending very much. However, it does effect the propensity of government contractor companies to prepare proposals AND the way they go about it. Companies experiencing slower business or lacking confidence in the market typically slow down their volume of bidding because they fear spending too much to chase a sluggish market. However, recessionary times tend to increase the demand for the proposal consultants because some companies reduce their full-time proposal staff and use outside support to get the proposals done as needed.

So how does all of this add up? When you combine the upcoming presidential election, the risk of sequestration, the uncertainty around the timing of appropriations and the economy, what can we say about the volume of proposal business to expect over the next 6 – 9 months? The opinion is almost unanimous that the last two months in FY 2012 – August and September – will be relatively fast as agencies try to meet end of fiscal year program objectives and spending goals. The fall is nearly always relatively slow, and with the presidential election, business is likely to be even slower than usual. In each of the last three presidential elections, business was actually moderate until a week or two before the election, at which time it slowed down significantly.

Attempting to assess the volume of business for the first two quarters in calendar year 2013 is more difficult. Will there be a continuing resolution, and if so for how long and what form will it take? This observer believes that some form of sequestration will take effect. Thus the dollar volume of spending will decline. As a result, competition will be stronger as companies fight for slices of a smaller pie. And competitions will tend to change somewhat, with Capture planning being more important than ever and lowest-price-technically-acceptable awards growing even more in popularity.

As proposal guru Eric Gregory said, “Once every three to four years, something happens to pertubate the market. This may be caused by something like a change in the procurement process, a political change, or a recession.” Fiscal Year 2013 is being hit by not one change but 4 changes. So those groups that best align their strategy and resources to these realities are the ones that will survive and thrive.