Expect another end-of-fiscal-year surge, especially in IT contracting.
Federal agencies typically squeeze much of their contract spending in at the end of the federal fiscal year, and that trend is expected to continue this fall, analysts and agency officials said Wednesday.
Since 2009, agencies have spent an average of 32 percent of their annual contract dollars in the last three months of the fiscal year, which ends in September, Bloomberg Government analysts said at an event sponsored by the company. The event, called “The Race to the Finish,” was aimed at companies seeking to increase their government contracting opportunities.
Much of the late-stage spending is on large multiple-award contracts, especially for information technology purchases. For example, about half of the spending under NASA’s Solutions for Enterprise-wide Procurement vehicle -- which is available to all federal agencies for purchasing IT products -- occurs in the the fourth quarter.
Last year, agencies obligated $142 billion in contracts during July, August and September, according to Bloomberg. A significant proportion of those contracts usually go to small firms, as agencies become aware of how much they need to award to meet small business contracting goals for the year.
“We’ve got 55 shopping days left this year,” said Bill Gormley, a former high-ranking acquisition official at the General Services Administration who now runs his own consulting firm, at the event. “There’s a lot that gets pushed through at the end.”
It’s a myth that government waits until the yearend so as to avoid competition in awarding contracts, said Joanne Woytek, program manager for NASA SEWP. Especially with the long-term continuing resolutions of recent years -- under which agencies are typically prevented from awarding new contracts -- it often simply takes until later in the year for government contracting officers to complete their work.
SEWP, which is in its fifth iteration as a multiple-award contracting vehicle, took in about $3 billion in contract spending last year. About one-third of that came in September, Woytek said. On the last day of the fiscal year, Sept. 30, SEWP spending totaled $150 million -- about 6 percent of the yearly total in one day.
On GSA’s contract vehicles, some of the spending has moved out from the end-of-year rush to take place as early as July, said Tim Dempsey, systems chief in the agency’s Office of Acquisition Management.
“The holiday season is really starting," he said.
Still, Dempsey said, spending on GSA’s online procurement site, GSA Advantage, accelerates as the end of the fiscal year approaches.
“It’s really interesting to go online Sept. 30,” he said. “It’s kind of like Black Friday.”
(Image via Melpomene/ Shutterstock.com)
NEXT STORY: Q&A: The Case for Crowdsourcing War Games