If you are the owner, executive or business development professional for a company pursuing federal contracts, let's talk for a few minutes. Like every other person in our country (if not the world) you are probably stunned and amazed at what's going on right now. Those are the only descriptors I can use in this post unless I want to get it tagged with an NC-17 rating. You know what I mean.
There is no doubt things stink right now and there is also no doubt that my wife and I, like every other small business owner, are taking a good hard look at contingencies in case the chuckleheads in Washington, DC elected to make decisions on our behalf continue to do the one thing they've proven they can do well. Nothing.
In the meantime, I wanted to try and be a bearer of good news rather than the current norm, and talk about what is happening rather than what is not. For starters, the U.S. Government is still spending money. Honestly, I would not joke about something like that at this time. To be specific, the U.S. Government is still obligating dollars for the purchase of goods and services from vendors just like your company. Now you're probably going to say something along the lines of 'probably just insignificant dollar amounts,' or that it's 'all direct-award/sole source' or they are probably 'buying stuff the average small business does not provide.' Of course, I would then tell you you're wrong. Hey, it's my blog after all!
Now I suppose you want me to back-up my comment, right? Okay, here you go.
From October 1, 2012 through October 10, 2012, more than seventy contracting agencies (think FEMA versus DHS or Farm Service Agency versus USDA) reported contract actions leading to net obligations of $5.9 billion dollars.
From October 1, 2013 through October 10, 2013, more than seventy contracting agencies reported contract actions that resulted in $1.5 billion dollars being obligated (also net). Wait a second. That doesn't look right, it was much closer than that when I did the math the first time. Let's see carry this, divide by that and... oh yeah! I forgot to remove Department of Defense spending!
Since DoD transactions don't appear to you and I for ninety-days, we won't know what they have spent until January 1st through January 10th. So if you take that into account, the obligations during this period in 2012 were actually, $1.7 billion dollars (for 2013, DoD obligations account for $4M of this spend).
That's better isn't it? Only about $200M off the pace for the same period in 2012. Now let's address your other questions. As far as sole source versus what was competed during the first ten days of October, just under $1.1 billion of the 2013 buys were:
- Competed Under Simplified Acquisition Procedures;
- Competitive Delivery Order;
- Competed Full and Open, and;
- Competed Full and Open After Exclusion of Sources.
The rest was not competed.
As far as what agencies are buying, one billion has been obligated for services (versus goods) and there are nearly 700 NAICS Codes referenced in these transactions. The top two NAICS Codes by obligation amounts are Computer Systems Design Services and Other Computer Related Services. I know those descriptors represent offerings by many of the small businesses in our membership.
Nine of the first twenty-two NAICS Codes account for $440M in spending and each one is indicative of direct awards and subcontracts our member companies regularly pursue and win. By the way, there are actually more NAICS Codes referenced this year versus the same period in 2012 and the rankings are completely different.
Here are the last few things I'll say about the current spending:
- Most but not all of it is being awarded to established contract vehicles, but the GSA Schedule is not the preferred choice
- Small businesses have seen $189M in set-asides since the shutdown began
- Set-asides or no set-asides, small businesses have captured $525M of the shutdown spending so far
- The number of agencies making obligations continues to rise
The social media sites are full of folks who seem to indicate everyone should throw in the towel and wait for this to end while apparently doing a meet and greet with others to perseverate as to why things are so bad.
We just empowered our member companies with information like this with much more detail, and marching orders to get out there and get some business. Have you seen the number of solicitations out there? Are you in touch with your customers for those buys that don't require a synopsis to FBO.gov or similar?
After all, a government shutdown doesn't mean the government is closed for business!
(Thanks for that Larry!)
Peace.The Chief Visionary
"The person who says it cannot be done should not interrupt the person doing it."