The Unpredictability of the Federal Market: Federal Budget, Continuing Resolution and Government Shutdown

As a sales professional, you expect buyer hesitancies or the introduction of a new decision maker to derail your sales process slightly but in federal sales the potential pitfalls can completely kill your sales process and there is not much you can do to stop it. There are three major elements of federal sales that will make or break your deals:

1. Federal Budget
2. Continuing Resolutions
3. Government Shutdown

This article will discuss what each of these elements entail and how you can best fortify your pipeline against them.

The Federal Budget

Sales 101 states you need to ensure your buyer has the necessary budget for your solution or else you are wasting your time selling to them. The same is true in federal sales but the process for obtaining a budget is much more convoluted than in the private sector.

5 Steps Of The Federal Budget Process:

1. The President submits a budget request to Congress​
2. The House and Senate pass budget resolutions​
3. House and Senate Appropriations subcommittees "markup" appropriations bills​
4. The House and Senate vote on appropriations bills and reconcile differences​
5. The President signs each appropriations bill and the budget becomes law

It seems straightforward and there is even a specific timetable for each step to reach completion per Title III of the Congressional Budget Act, which is detailed below:

While it may seem like a straightforward and organized process, the pitfall is that this requires the President and Congress to agree on how the budget is allocated. If opinions conflict then refusal to approve the budget unless certain stipulations are met can delay the process of the budget being approved and ultimately can mean that funds are reallocated throughout government. For a federal sales professional, this means that agencies you are prospecting may not receive the budget they need to fund your solution. The best way to combat this is to ensure you have an accurate and up-to-date view of your whitespace so you can pivot your efforts to agencies or departments that are well funded.

Continuing Resolution

A continuing resolution (CR) is the point where all federal sales professionals drop their heads in defeat; it is the bane of the federal sales process.

When Congress and the President fail to agree on and pass one or more of the regular appropriations bills, a continuing resolution can be passed instead. A continuing resolution continues the pre-existing appropriations at the same levels as the previous fiscal year (or with minor modifications) for a set amount of time. Continuing resolutions typically provide funding at a rate or formula based on the previous year's funding and that formula is typically 1/12 of the previous fiscal years budget per month.

Additionally, CRs typically include language that prohibit new program starts or the addition of initiatives not funded in the previous year. In other words, those deals you have been working on for a year or more that needed new budget allocation aren't going to be closing any time soon. To make matters worse, when the budget is approved, it still takes time for funds to trickle down through the agencies. This is when new programs start being ranked by prioritization. If your solution is not considered a priority, then it will likely be pushed and, depending on the length of the CR, could be pushed as far as into a completely new fiscal year.

The best way to combat this is to properly plan and close as much as you can before the start of a new fiscal year.

Government Shutdown

A government shutdown occurs when Congress fails to pass or the President fails to sign appropriations. In this case, the current interpretation of the Antideficiency Act requires that the federal government begin a "shutdown" of the affected activities involving the furlough of non-essential personnel and curtailment of agency activities and services.

The Effects Of A Government Shutdown:

• All government purchases are halted
• Applications, such as for drilling permits or small business loans, may not be processed
• Museums and national parks may close
• Government statistical reports may be delayed
• Nonessential workers will be furloughed while essential personnel may be required to work without knowing when they will get paid

While a government shutdown may seem like a total halt to your pipeline, there are a few options to keep your sales process moving. There are many Federal agencies that do not depend on the Federal Government to pass a budget because they are either funded in other manners or self-funded. Some of these agencies include:

• NSA
• CIA
• Amtrak
• United States Postal Service

If possible, prospecting within these agencies can help offset the effects of a shutdown to your sales goals. However, you should be building these relationships prior to a shutdown not starting at a time of uncertainty.

Do You Need Help Fortifying Your Pipeline Against The Unpredictability Of The Federal Market?

Then request a FREE Consultation from Sanctum Federal! Our team has successfully built several Federal sales startup practices and secured millions of dollars of revenue directly from the Federal market and our mission is to help other organizations do the same!

Use the form below to request your FREE Federal Sales & Marketing Consultation and learn what methods you can learn to increase you or your team's ability to sell to the Federal Government!