As the economy slowly regains its strength, contractors may see more government sales opportunities in 2012, GovPro.com’s Mike Keating explains in this Expert’s Corner.

In 2012, government purchases of goods and services will reach $2.99 trillion, down slightly from $3.03 trillion in 2011, according to Waltham, Mass.-based economic forecaster IHS Global Insight. Of that amount, federal government purchases of goods and services will total $1.22 trillion in 2012, while state and local government purchases will reach $1.77 trillion.

Things are looking up in 2012, says Don Gonneville, owner of San Juan Capistrano, Calif.-based Gonneville Inc., a certified Service-Disabled Veteran-Owned Business Enterprise (SDVOB) and a small business that distributes generators, light towers and wet abrasive blast systems to the federal government.

“Despite budgetary constraints at every level of government, we are forecasting a 40 percent increase in sales revenue from our government clients in 2012,” Gonneville tells IMT. “This growth will come primarily from newer products that we are just introducing — products that are environmentally advantageous while offering cost benefits and ultimate savings.”

The public sector is a key customer, Randy Stevens, vice president of sales at Stillwater, Okla.-based E-Z Drill, says. “We’ve always felt the government market was a strong one for our drills. And there’s great opportunity to continue that as cities and states do more repair work to address the aging infrastructure issue. We have drills that are appropriate for departments of transportation working on large highway repair projects, and we also have smaller units for city street work and utility work.”

For E-Z Drill, airport work continues to generate business, Stevens says. Besides commercial airports, E-Z Drill sells to U.S. Air Force bases, Stevens tells IMT. His firm’s drills are used on a variety of airport projects, including repair and new construction.

The topic of government’s aging infrastructure isn’t going to go away, Stevens says. “It will have to be addressed, even if it’s in small doses. And we’re ready to support those projects.”

On the IT front in 2012, “the federal government will be keenly focused on efficiencies and common platforms as opposed to silos and customized solutions,” according to Jim Brinker, vice president of Federal Systems at Fremont, Calif.-based SGI. The technical computing vendor sells IT and archiving solutions to government.

“There will be continued spending on cloud-oriented architectures and high-performance computers to meet the big data needs of the government,” Brinker tells IMT. “We also think that the government will look for savings by consolidating their data centers and taking advantage of modular architectures and other technologies that can reduce space, power and cooling expenses.”

Sellers of energy-saving equipment will find opportunities in the public sector in 2012, Lourdes Martin-Rosa, advisor on Government Contracting at New York-based American Express OPEN, says. “President Obama recently announced nearly $4 billion in combined federal and private sector energy upgrades to buildings over the next two years as part of the Better Buildings Initiative (BBI),” Martin-Rosa tells IMT.

One of the goals of the BBI is to upgrade energy performance by a minimum of 20 percent by 2020 in 1.6 billion square feet of office, industrial, municipal, hospital, university, community college and school buildings. The BBI includes a $2 billion commitment for energy system upgrades at federal buildings and facilities.

New technology may help state governments get out of their fiscal doldrums, Sujit CanagaRetna, senior fiscal analyst for the Atlanta-based southern office of the Council of State Governments, says. “Notwithstanding the significant economic obstacles that have confronted states in the aftermath of the Great Recession, there are a number of bright sparks on the state economic landscape that offer optimism for a self-sustaining recovery.

“These bright sparks include a panoply of projects involving solar, wind, biotech, auto industry, aviation and export-led industries that have the potential to generate more broad-based, sustained growth at the state, regional and national levels,” CanagaRetna continues.

Tax revenues are growing, but states still face a tough fiscal situation, according to The Fiscal Survey of States, Fall 2011, a report released in late November by the Washington-based National Governors Association and the Denver-based National Association of State Budget Officers. The report notes that even as states struggle with lukewarm revenue growth, they will be called on to spend more because of the economic distress caused by continued high unemployment.

Election years rarely benefit government contractors, Mark Amtower, a government marketing expert at Amtower & Co, says. In 2012, Amtower says, “it will remain important for contractors to maintain a strong focus on current customers, look carefully at partnering with companies that have other contracts that may require the products you sell and stay very current on new procurement regulations and trends.”

One last piece of advice from Amtower: “If you are a manufacturer using the channel, look at the resellers who perform best for you and see if there is more you can do with them. Consider cutting off the underperformers so you can focus on those that do perform well.”

Michael Keating is senior editor for Government Product News and a contributing editor for American City and County, both published by Penton Media Inc. His mid-year 2011 government budget forecast is available at GovPro.com and IMT. His complete 2012 government budget forecast will be available soon at GovPro.com. Keating has written articles on the government market for more than 100 publications, including USA Today, Sanitary Maintenance, IndustryWeek and the Costco Connection. Mike can be reached through his website, MikeKeat.net.