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If Uncle Sam Makes It Rain During Q4...

Posted By Guy Timberlake, The American Small Business Coalition, LLC, Tuesday, July 15, 2014
Updated: Tuesday, July 15, 2014

If Uncle Sam Makes It Rain During Q4... Look for the 'Simplified' Opportunities!

For the last few months I like many others have been anticipating 'Fiscal Year End 2014' and what it may bring for government contractors. Will there be gifts under the proverbial tree this year or just more coal? Of course, there's been the usual back and forth about record spending and how companies should position themselves to jump on opportunities when Uncle Sam makes it rain.

Yet there will be a ton of obligations made (face it, anything in excess of one billion dollars is a ton to most of us) and there will likely be a number of bluebirds realized as 'fallout' dollars appear on a contract near you! If you're lucky, some of those contracts will be in your name!

But as I so often do, here's a dose of reality. If you are not one of the companies who has been diligently working to stay top of mind with customers and prospects throughout the year, you may as well sit this one out. After all, this is a relationship business and just because there's a potential spending spree around the corner doesn't mean the rules that apply the rest of the year are all of a sudden ignored. One of the rules I'm referring to is the "People do business with those they know, like and trust." rule. But I'm not here to be a Debbie Downer, I actually have news that should offer a glimmer of hope to many who might otherwise not have a reason to celebrate.

Let's just say for a second this will be a fourth quarter for the record books. The questions most companies have are "How will those dollars be spent?" or "Will most of the work be directed to other companies?" and "What if we don't have a GSA Schedule or other established contract vehicle? Will there be opportunities for us?"

If history repeats itself in any way, shape or form then the answer is yes. Here's why.

According to the Federal Procurement Data System (FPDS-NG), at the end of FY2012, agencies reported $114B in obligations for Q4. Most of these dollars were competitively awarded, $79B in fact. Even with a $56B downturn in overall spending from FY2012 to FY2013, agencies report $125B in Q4 obligations with $86B of that competitively awarded for FY2013. For all the hubbub about the importance of GSA Schedules, Blanket Purchase Agreements, IDIQs and GWACs, the numbers for both fourth quarter's show indefinite delivery vehicles only accounted for just over half of the total dollars obligated.That means the remainder each year made it onto contracts that did not reference the contract number of a GSA Schedule, BPA, IDIQ or GWAC.

For a high-level view of what agencies were buying, let's just say there were more than one-thousand NAICS Codes referenced each year end. For FY2013, a total of 1158 NAICS Codes were referenced during that fourth quarter. If you've never heard me rant about the importance of understanding and leveraging Product and Service Codes in your SAM and DSBS profiles and in how you track awarded and upcoming opportunities, here's why. $721M in Q4 FY13 obligations were reported without any reference to a NAICS Code. Got PSCs?

By most obligations, the top ten NAICS Codes referenced during the closeout to FY13 accounted for $59B and included:

> Aircraft Manufacturing
> Engineering Services
> Commercial and Institutional Building Construction
> Facilities Support Services
> Research and Development in the Physical, Engineering and Life Sciences (Except Biotechnology)
> Administrative Management and General Management Consulting Services
> Other Computer Related Services
> Computer Systems Design Services
> Search, Detection, Navigation, Guidance, Aeronautical and Nautical System Instrument Manufacturing
> All Other Professional, Scientific and Technical Services

Now, for the stuff that could make the year end on an upbeat note for several companies, hopefully of the small business variety. Let me help you get 'simplified' this fiscal year end! Why? Check this out.

At the end of FY2012, fifty-nine federal agencies, boards and commissions rallied to obligate $5.2B using Simplified Acquisition Procedures. One-third of the total Simplified Acquisition obligations made during FY2012. During FY2013, sixty-one agencies combined to spend $5.3B during Q4, also a significant chunk of the $17B in Simplified Acquisition obligations made that fiscal year. Remember the $56B downturn in overall spending from FY12 to FY13?  Even with a drastic drop in spending, agencies obligated more dollars on Simplified Acquisitions during the FY13 fourth quarter and on the year as a whole.

Here's why I think this is good news. First, more than half of the Simplified Acquisition dollars obligated were awarded to standalone contracts versus established contract vehicles. Next, the majority of the dollars were competitively awarded ($4B each year). The big one? Small business concerns scored $3B at the end of each fiscal year.

Even though Simplified Acquisitions represents a small slice of the overall fiscal year end pie, they represent a great opportunity for small business concerns any time of year. Generally there is less burden when responding to these buys (RFQ vs RFP) and the turnaround from time a need is identified until it is in-house for the customer is often very short. Then there's the inherent preference for small business concerns.

Interested in learning more detail about fiscal year end spending via Simplified Acquisitions? Beginning July 22nd I'll be posting details and taking questions related to agency spending, NAICS Codes, competition and more in our FPDS-NG User Group (Information To Win™) on LinkedIn.

Hope yours is a Happy and Productive Fourth Quarter!


The Chief Visionary

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

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