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The US government as buyer-background

Prior to 1950, the US government depended on its own employees to create and provide products and services for the nation. It quickly realised that hiring and training its own people to create new technology and provide complex services was much less cost-effective than contracting these out to the private sector. As a result, the mid 1990’s brought about some substantial federal procurement reform initiatives that radically transformed the government’s procurement process. Today, with a workforce of less than four million across the nation, the US government depends on the private sector to provide most critical products and services.

The federal government has also simplified its procurement process to create a more commercial environment for companies to work with federal agencies. With a total budget of over $3tn, the US government remains the world’s largest buyer, purchasing everything from paperclips to night vision goggles. In fact, the US government spent over $330bn on goods and services last year, much of which was concentrated on information technology.

British firms find local advantage

As in years past, companies in the Greater Washington region (Washington DC, Northern Virginia and Suburban Maryland) stand to gain from recent increases in government spending. Federal procurement in the region topped $52.6bn in 2004 – an increase of 19% over 2003 — and is only expected to continue to increase. Businesses located in the region say one of their biggest advantages is proximity to a wealth of federal resources and the opportunity to meet with their potential government clients at a moment’s notice.

Greater Washington business skyline

It seems the US government also sees proximity as an advantage, since 40-50% of all government contracts are awarded to companies with a presence in Greater Washington. British companies such as BAE Systems, BNFL, BSI Group, Cobham, De La Rue Global Services, Dedicated Micros, FDM Group, Qinetiq, Halcrow, Memex, Rolls Royce, Smiths Group, Strategic Thought, Tessella, Ultra Electronics, and hundreds more have made Greater Washington their North American home.

Internationally-owned firms in the region secured more than $4.4bn in federal contracts during 2004/2005 — the majority of these awarded to locally-based British companies. This trend toward contracting by the US government has had a major impact on the Greater Washington economy, bringing new opportunities for businesses of all sizes. People often think of Washington, DC as a “government town” where most of the population is employed by the federal government. However, only one in six workers in the Greater Washington area is currently on the government’s payroll, down from one in four in 1977. By contrast, Greater Washington’s private sector has grown substantially and now accounts for one in every three jobs in the region.

Fourth largest economy in the US

The Washington DC metropolitan area now has the nation’s largest and strongest technology cluster with more than 9,000 high-tech companies and 333,000 technology employees — twice the national average and three times that of San Jose, CA.

Home to companies such as AOL, Accenture, BearingPoint, Booz Allen Hamilton, CSC, Discovery Communications, EDS, Intelsat, L-3 Titan Group, Lockheed Martin, National Geographic, Northrop Grumman, Raytheon, Sprint Nextel, and Unisys, this once sleepy “government town” has been transformed into the fourth-largest regional economy in the US, leading the nation in job growth for the past five years. These companies, and thousands of others like them, know that the Greater Washington region is practically recession-proof. When the US economy slows down, the federal government still continues to buy — and is one of the only entities in the world that is required to pay its bills in full and on time.

Opportunities in homeland security

The US government will spend $63bn on IT products and services in FY 2006 and is expected to increase spending particularly in the area of homeland security. The Department of Homeland Security’s (DHS) FY 2007 budget is projected to increase to $4.4bn – 21.2% over FY 2006, the largest increase of all civilian agencies. Within DHS, the Transportation and Security Administration (TSA), and health information technology, specifically in the area of biosecurity, will realise the largest increases for 2007.

Centres of excellence such as the National Institutes of Health (NIH), American Type Culture Collection, George Mason University’s Center for Biodefense, and the US Army’s Medical Research Institute of Infectious Diseases, will undoubtedly lead national efforts for biosecurity research and development. Currently over 33,000 bioscience professionals, 933 research and development facilities, 70 federal research labs, and hundreds of bioscience companies contribute to Greater Washington’s growing biotechnology and biodefense industries. In fact, with over 50 colleges and universities, 46% of the region’s adult population has a bachelor’s degree or higher and 21% has an advanced degree — making Greater Washington the nation’s most highly educated area.

Location is everything

There is no other single place in the US where a company can tap into such a highly-educated employment base and a high concentration of decision-makers in both the public and private sectors. This region is now home to nearly 50 of the major Fortune 500 companies, 9,000 technology companies, 700 internationally-owned businesses, and 180 embassies. Uncle Sam, the world’s largest buyer, continues to be the primary magnet for companies, but access to commercial clients, a global network, and research and development resources makes Greater Washington the number one destination for firms around the world.

About the Greater Washington initiative

Are you looking to locate or expand your business into the Greater Washington region? The Greater Washington Initiative (GWI) represents Washington DC, Northern Virginia, and Suburban Maryland as the region’s nonprofit economic development organisation. Our complimentary and confidential services help British businesses:

Understand

Get to know Greater Washington’s key industries.

Compare

Is Greater Washington right for your business?.

Locate

Within the region, where is the most strategic site?

Integrate

Hit the ground running by connecting with local partners and resources!

For more information, contact:
Nicola Lewis, MBE
UK Business Development Representative
4 Carlton Gardens, London, SW1 Y5AA
Tel: + 44 (0)207 839 6844
Mobile: +44 (0)7894 072929
Email: nicolalewis@bot.org

April DuBois
Director, International Business Development
1725 I St., NW, Suite 200
Washington, DC 20006
Tel: +1 (202)857.5986
UK TollFree: 0500.892.691
Email: aprildubois@bot.org

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