Strike While the Fed Dollars are Hot

Every August and September, there is a spike in federal spending. This is the annual “use-it-or-lose-it” period referred to as the “busy season.”

Government agencies (federal, state and local) are allocated specific funds each year. If money is left at the end of the fiscal year, the agency doesn’t get to keep it; the money goes back to the Treasury Department. The federal fiscal year (FY) is Oct. 1 through Sept. 30, while most states are on a July 1 to June 30 fiscal year.

The question then becomes, how does a company go after that end-of-FY “treasure trove?” Here’s where B-to-B catalogers stand to benefit a whole lot more than they do when they target private industry customers. You don’t need a contract to go after government orders of less than $3,000 on the federal level, and somewhat lower for state and local governments.

To get a good understanding of how to best tackle this opportunity, let’s first put the government market in perspective.

● There are more than 86,000 governments in the U.S — federal, state and local.

● These governments represent more than 20 million full-time employees (out of 151 million total, according to the U.S. Census Bureau).

● Their spending represents more than 25 percent of the gross domestic product (GDP).

● Including health care as institutional spending and a part of government spending, total government spending is more than 300 percent of the GDP, according to the institutional list compiling firm MCH Inc.

● In FY 2006, government spending on the SmartPay card, the credit card federal government reps use for purchases, topped $17 billion on more than 26 million transactions. It’s expected to hit $18 billion in FY ’08.

● The average order on a federal credit card runs 15 percent to 20 percent greater than a regular B-to-B order.