Helping the government find money for you (colors & expiring budget)

Why you should know this

  • They government might want to buy from you, but you may need to help them find the money: The government spends tons of money, but most of it is earmarked two years earlier. So you might have a government customer that wants your product or service, but if they don’t have available money you’re both out of luck.
  • You can help them find money: You would be amazed at how little government officers know about, and in fact are intimidated by, the government acquisitions process. So if you want to make the sale, you may have to teach the government how to buy, including helping them find money for you.

Searching for budget that can go to you

  • What you are looking for: Ideally you are looking for budget that:
    • Hasn’t been earmarked for someone else
    • Designated for your general kind of product or service
    • (Preferably) is going to expire shortly
  • Not obligated: When government budgets they list all their needs, then roughs out what it will cost to meet each need. So by the time you show up all of the budget the government has for this year (and likely next year) has been allocated to other people’s programs. So you want to find the least obligated money available
  • Can the money be used for your product or service (the color): When congress passes the president’s budget they put requirements on how the money is spent. And government money is broken out by:
    • Operations and maintenance (O&M)
    • R&D
    • Major Systems
    • Construction
    • Government agencies have to abide by this: If an agency gets $100 for O&M that money has to be spent on O&M. If you are trying to sell construction services, but the customer has O&M money you are out of luck
      • Or maybe not out of luck: There are ways to move money between pots (colors) but you will need to speak with advisors in the field to make this happen
  • When the money is spent: Another way for Congress to control how the money is spent is to put an expiration date on it. And typically the color of money dictates how long the money lasts:
    • Operations and maintenance (O&M): 1 year
    • R&D: 2 year
    • Major Systems: 3 year
    • Construction: 5 year
    • An example:
      • Congress approves $100 for Navy R&D in the FY 2022 budget
      • It is now Sept 1 2023 (one month till end of Fiscal year), so the Navy has one month to spend that money or it lost (goes back to the treasury

Where to find money that can be sent your way

Re-allocating money:

  • Sometimes the government overestimates the amount of money needed for a particular need or
  • The vendor on a contract does a poor job so the government stops funding the contract
  • If this happens the money budgeted for that contract could be re-allocated to you.
  • Finding excess funding: See the FedScout contract funding tool

Subbing to a prime that has an overfunded contract:

  • This is very similar to the re-allocation concept but instead of having the money taken off of another contract you can sub-contract to the prime
  • The prime take a percentage as a “pass through” and you get to make a sale
  • Finding these contracts: See the FedScout contract funding tool

Finding expiring budget

  • Look for budget that:
    • Is in your color (e.g. if you sell O&M the budget is O&M)
    • Allocated to your customer agency
    • Preferably expiring
  • Government agencies have a strong incentive to spend expiring money