VACANT FEDERAL OFFICES CONTINUE TO POSE CHALLENGE FOR CONTRACTORS

While many private sector workers have returned to their offices, the same is not true for federal employees.  A Government Accountability Office (GAO) report released last week found that occupancy rates at most federal agencies are still only about 25% of capacity, or less, while none are more than half full.  GAO based its findings on data from 24 agencies that occupy 98% of federal property.  The figures pose challenges for contractors selling products such as furniture, office supplies, printers, and other devices that support office-based work.  Service companies may be challenged on when and where to send employees that had previously worked on site.  Virtually every contractor may find it more difficult to develop relationships with new customers.  It seems unlikely that federal workers will return to their former offices en masse as well. “While all agencies have resumed in-person operations, it is clear that the federal workplace has evolved as agencies have embraced hybrid and remote office environments,” said acting GAO physical structure team head David Marroni.   The GAO report also triggered multiple discussions on the need to get rid of or repurpose underutilized real estate, with a drive to get more feds back in the office being a distant second priority.  Contractors that had counted on a more full-scale return of federal workers to their buildings will have to rethink their business plans and approach to federal business.  All companies will have to get used to virtual meetings as the way that most federal discussions will take place.  We’ve found that a best practice on this front is to have the agency send the actual meeting invitation so that they can use the platform that best meets their needs.  In person meetings are still important to business and relationship development.  Such gatherings, however, may take place more frequently at events, such as this week’s NCMA World Congress, or in non-federal meeting spaces.  A Starbucks card may be the new credential that facilitates in-person contractor meetings with federal customers.