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A more ‘simple’ contracting method with perks for Government and Industry (What agencies are buying?)

Posted By Guy Timberlake, The American Small Business Coalition, LLC, Sunday, May 04, 2014
Updated: Sunday, May 04, 2014

What do agencies buy when they use Simplified Acquisition Procedures?

(This is the second of six reports based on a conversation with Amy Morris, Morning Anchor at WNEW All News 99.1 (CBS Radio DC) These reports will also 'air' on All News 99.1.)

Like its cousin the Micropurchase, Simplified Acquisitions are not taken seriously in the realm of government contracting. A key reason so many industry organizations fail to deliberately account for these types of buying in their strategies is lack of information. While both micropurchases and simplified acquisitions account for billions in obligations every fiscal year, they are seen as tedious and not worth the effort by many companies. Even more don't believe the Government buys what they sell via either method. Since this series is about Simplified Acquisitions, we'll focus on what agencies purchase when they use these streamlined procedures.

"Too many companies believe Simplified Acquisition buys are just too small which isn't surprising given the mega-contracts and contract vehicles being awarded", says Guy Timberlake, chief visionary officer and CEO of The American Small Business Coalition. "They are mesmerized by the huge acquisitions being conducted and either don't want to or cannot devote the time needed to pursue these requirements which very often are in support of a large program and might end up being their "way in" to key relationships and larger opportunities."

So what exactly does the U.S. Government buy when it utilizes the Simplified Acquisition Procedures each fiscal year?

Timberlake offers "For the $17B obligated in FY2013, agencies referenced 1,204 North American Industrial Classification System (NAICS) Codes, the six digit numeric code that indicates the purpose for goods and services being procured and 2,403 Product Service Codes (PSC), the more granular numeric or alpha-numeric codes used to describe what agencies actually purchased."

Based on his review of data available in the Federal Procurement Data System-Next Generation administered by the U.S. General Services Administration, Timberlake assessed that $10.4 billion of the total obligations went to the purchase of goods and the remaining $7 billion was used to procure services of various types.

Here's a look at the top nine (9) of twenty Industry Title's based on FY2013 Simplified Acquisition obligations (Source: FPDS-NG):
Industry Title
FY2013 Obligations
 23 Construction$626M
 31-33 Manufacturing $6.7B
 42Wholesale Trade
 48-49Transportation and Warehousing $508M
 51Information $774M
 52 Finance and Insurance  $491M
 54Professional, Scientific and Technical Services
 56 Administrative and Support and Waste Management and Remediation Services
 62 Health Care and Social Assistance

Nearly $10 billion of the FY2013 Simplified Acquisition obligations were made via a purchase order which according to Timberlake "Are standalone contracts representing buys not placed against an existing contract vehicle like the GSA Schedule, Blanket Purchase Agreement or Indefinite Delivery Contract (IDC)." He sees these as an area of opportunity for companies new to government contracting and those who simply have not had a need to invest in such contract vehicles.

In part three we'll take a look at the departments and agencies making the buys using Simplified Acquisitions.
The Chief Visionary

"The person who says it cannot be done should not interrupt the person doing it."

Tags:  simplified acquisition 

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