Skip to content

What Every Federal Contractor Should Know at the Start of the 2023 Fiscal Year

The federal government fiscal year greatly impacts trends and opportunities — and this year is no exception. The new fiscal year began October 1 with some interesting trends and opportunities that every federal contractor should see.

What federal contracting trends are shaping the market?

  1. Market Consolidation

The number of unique vendors and contractors receiving federal funding has steadily decreased since 2019. What does this mean? Year over year, the federal contract market is getting tighter.

Graph showing the unique obligation recipients between the 2019 and 2022 fiscal years

Merger and acquisition activity is largely responsible for this trend. As more contracts get consolidated into larger vehicles, the market gets increasingly more competitive. To counter this trend, we advise focusing on subcontracting and partner relationships.

  1. Excess Contract Ceiling

Another interesting macro trend in the federal market is that ceiling values (or potential values) are now outpacing funding. In FY2019, before COVID, the total amount of ceiling awarded on a contract mapped closely to the amount of funding going out. 

From FY2022 forward, though, the amount of ceiling has greatly outpaced available funding, meaning many contracts have headroom left on them. This trend is expected to continue in the coming months and years.

Graph showing the total contracts awarded, total ceiling awarded and total obligations between the 2019 and 2022 fiscal years

This means two things for federal contractors.

First, the amount of unobligated headroom on contracts is getting larger. (This falls in line with larger, longer-term contracts being awarded to fewer contractors.)

Second, federal contractors can anticipate fewer contracts being awarded going forward as ongoing requirements are locked up in the previously mentioned larger, longer-term contracts.

  1. Research and Development Emphasis

In Q1 and Q2, the types of opportunities being solicited by the government involved pretty standard goods and services. Recently, The Defense Advanced Research Projects Agency (DARPA) contributed some interesting opportunities that take more of a research and development focus.

For example, Environment-driven Conceptual Learning (ECOLE) from DARPA is soliciting innovative proposals in the following areas of interest:

  • Human Language Technology
  • Computer Vision
  • Artificial Intelligence
  • Human-computer Interaction

This is just one of many research and development (R&D) opportunities coming down the pipeline from DARPA that provide a unique opportunity for contractors to break into the R&D market.

 

What opportunities are trending right now?

Here are four trending opportunities (some flying under the radar) pulled from GovTribe data, which includes over 3 million opportunities, over 70 million awards, and over 2 million contractor profiles:

 

Where can federal contractors find more federal contracting data?

This data is just the tip of the iceberg. Start a free trial with GovTribe today to leverage more exclusive federal contracting data and win more bids.