Federal Government Market Segment: Sizable but Unfamiliar Opportunities

November 30th, 2017

As part of our KG Prime market intelligence series, we recently examined and retrieved data regarding the U.S. federal government market segment. Specifically, we studied both tax and non-tax related receivables, delinquencies, and write-offs, while exhibiting the Department of Education (ED) to provide context for the other federal government creditor agencies (e.g., IRS, Department of Agriculture, or Department of Energy). Throughout our in-depth research, we consulted with Randy Kamm, founder and principal of Collection Quotient Consulting and subject matter expert for federal government opportunities on KG Prime, to provide further insight and guidance. Upon completion of our research initiative, the results of our examination confirm that although we almost exclusively hear about accounts receivable management (ARM) opportunities with regard to ED, there are sizable and lucrative opportunities across the many other federal government creditor agencies. Additionally, among other reasons, because the federal government is mandated to outsource a certain portion of its activities to small businesses, this market segment should be even more appealing to the ARM industry, which is primarily comprised of small, mom-and-pop businesses.

As shown by the graph below titled Total Government Accounts & Taxes Receivable, both accounts receivable (A/R) – which is comprised of the non-loan receivables (e.g., debt derived from license fees or sale of goods and services) from the various federal government agencies (e.g., Health and Human Services or Homeland Security) and taxes receivable (T/R) grew significantly since 2004, albeit experiencing moderate fluctuation throughout many years, equaling nearly $140 billion in 2016. Importantly, we all know ED’s prominence in the federal government as it relates to the ARM industry, but we can clearly see that both A/R and T/R segments grew quite quickly – at 7.8% and 7.2% annually, on average, respectively – over the 13-year period. This suggests, in consideration of our extensive research findings, that there are vastly more lucrative federal government-related ARM opportunities available other than ED, even when we don’t consider loans to the public.

 

To access Kaulkin Ginsberg’s analyses on the federal government market segment, which includes an introductory podcast with Randy Kamm, among other ARM-focused examinations of pertinent information for contracting purposes, or the rest of our vast research on this segment, please become a KG Prime member today by requesting a company code or contacting us at hq@kaulkin.com. Through KG Prime, you’ll gain access to a user-friendly and secure website full of in-depth M&A, economic, compliance, and market-related data and analyses tailored specifically to the ARM industry. Basic membership is free for ARM companies or others interested in the ARM industry.

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One Response

  1. John Russo says:

    Please keep me posted on this subject matter.

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