Uncertainty around a continuing resolution, appropriations and potential shutdown, workforce issues, Contracting Officer shortages, the impact of clearances on hiring, lack of civilian cyber standards, and the pervasive impact of vacant political billets. No matter the federal agency with which your company offers services, both contractors and federal officials can agree that these issues are at the top of everyone’s mind and resonate across the industry.

PSC’s Vision Federal Market Forecast Conference highlights these issues and more, as it annually brings together more than 300 attendees from 150 different companies, as well as dozens of government attendees hailing from roughly 35 different agencies— many of whom were interviewed for the Vision forecast. Now in its 55th year, Vision is the only non-profit federal market forecast that is for industry, by industry. The 2019 Annual Forecast captures insights from hundreds of government executives, think tank experts, congressional staff and Wall Street analysts who took part in non-attribution interviews, which then provided quantifiable assessments of the budgets, programs, priorities, and issues across
various markets. Here are a few highlights from the 2019 Vision Conference, held Oct. 28-29 in Falls Church, Va.

Macro-economic and Defense Topline
Team Lead: Lou Crenshaw
• The 2019 Bi-Partisan Budget Agreement is a high-water mark for topline discretionary spending growth
• Year-long continuing resolution is possible due to Congressional distractions
• Parity continues to be a factor in budget negotiations but will depend on election results
• Near-term debt appears to be a non-factor, as long as interest rates stay low, but outyears are a concern
• Possibility of an economic slowdown 12-18 months away with slow recovery due to limited options.

Federal IT Budget Outlook
Team Leads: Greg Lobbin, Steve Vetter
• President’s Management Agenda efforts continue to drive enterprise-wide behavior and transformative capabilities
• IT Modernization is increasingly being driven by agency mission outcome discussions
• Personnel availability and management processes are the two biggest challenges for CIOs
• Current trend suggests that civilian agencies’ growth is steady and Department of Defense (DoD) growth is increasing, but not as fast as prior years.

Defense Services
Team Leads: Jason Dombrowski, Chris Meissner
• Some, but not a lot, of changes in the DoD priorities;
• Readiness continues to be a priority
• Without stable senior leadership, no significant changes in priorities
• The War for People
• People, or lack thereof, is likely the #1 concern for our industry going forward
• Flat growth: winners mean losers
• With projected growth below inflation, any changes in mission will necessitate reallocation of funds.

Acquisition Trends
Team Leads: Kitty Klaus, Mark Youman
• Contracting Officer shortage is getting real
• Approaching breaking point with fewer contracting officers & reduced assisted acquisition services
• Best-in-Class Contracts are an increasing “must have”
• New acquisition methods gain traction
• Pentagon OTA spending could top $7 Billion in FY 2019 with nothing from the Hill this year to change the trajectory.

This article was published October 30, 2019 in the Fall 2019 edition of PSC's Service Contractor Magazine. Click here to view a PDF of this article.