Loneliest Number Or Not, It Pays To Be The 'One'
I was three years old when Three Dog Night released their hit 'One is the Loneliest Number' and now, nearly fifty years later, I get to use it as a reference for lost opportunities in government contracting. Not just any lost opportunities but Simplified Acquisition buys where the government recorded only one offer (Yep! Just one!) from industry when these competitive purchases were made. Are you a little curious about where I'm going with this one? Here we go!
Today I'm looking at dollars left on the table from low-hanging fruit opportunities worth $3.1 billion for FY14 and just over $42 million for FY15 year-to-date.
Here's the criteria:
- All obligations are the result of Simplified Acquisitions based on the Solicitation Procedures
- Only base/initial awards were included, not modifications (which deducted $400M from the total)
- Number of Offers Received were fewer than two (2)
- Extent Competed includes:
- Competed Under SAP (Simplified Acquisition Procedures)
- Competitive Delivery Order
- Full And Open Competition
- Full And Open Competition After Exclusion Of Sources
- Award and Indefinite Delivery Vehicle Type includes:
- Basic Ordering Agreement (BOA - an IDV)
- Blanket Purchase Agreement or BPA (incl. GSA/BPA) this is an IDV
- BPA Call (delivery/task order against a BPA)
- Definitive Contract (mutually binding contract for goods services - not an IDV)
- Delivery Order (delivery/task orders against BOA, BPA, FSS, GWAC and IDC)
- IDC (incl. IDIQ and MAC - also IDVs))
- Purchase Order (offer by an agency to purchase goods/services - not an IDV)
Are we good? Okay, here's the meat.
During FY2014, sixty agencies, boards and commissions obligated nearly $15B using the Simplified Acquisition Procedures. This number will likely increase since FY14 is still being closed out and final numbers for DoD won't be publicly available until the end of December. The final number is going to be my next 'low-hanging fruit' blog that discusses the ever-increasing use of Simplified Acquisitions by civilian, defense and intelligence agencies. For example, Simplified Acquisition obligations are currently at $15B with $353B in total FY14 obligations governmentwide. Compare this to FY2012 when agencies obligated $15.4B using Simplified Acquisitions when they obligated $518B governmentwide. Total dollars go down and these streamlined, inherently small business-friendly buys continue to increase. Stay tuned for that one but now back to the topic at-hand.
With $15B in streamlined buys for products and services already accounted for, I wanted to see how much was left on the table, so to speak. As I mentioned earlier, I'm looking at buys that were competed, but apparently only one response from industry was received. For the $3B in FY14 buys this equates to 103,000 purchases by fifty-nine agencies during the last completed fiscal year. The top five departments by obligation are DoD, Broadcasting Board of Governors, HHS, Justice and VA, accounting for $2.2B of this one-offer spend.
For FY2015, $41M in one-offer competitive buys are attributed to Justice, VA, Treasury, USDA and DHS. For the record, there were 1,354 unique purchases processed to get to the $42M. That's an average of better than $31K per buy. That's not a bad chunk of change when you think about it.
Now here's what I don't understand. Over $30M of the FY15 one-offer buys were competitively awarded to large businesses while $1.7B of the $3B in FY14 one-offer buys went to large business. It could have been mid-sized businesses, too but it wasn't small business. Here's how I interpret this. Small federal contractors don't know or don't care to look for these buys that could quite literally 'help keep the lights on' while waiting for the larger deals to come in. Had these been sole-source buys I wouldn't have a leg to stand on, but because they were competitively awarded to large companies, it means small business essentially did not show up.That needs to change.
Just in case you were wondering, $1.8B of the FY14 total and $21M of the FY15 total were issued by Purchase Order and Definitive Contract with PO's far and away accounting for the bulk of those dollars. These are buys that do not reference an IDV contract number which most often means you don't need a GSA Schedule, BPA, GWAC or IDIQ to pursue these opportunities.
Small contractors continue to say they are starving for viable opportunities and I continue to espouse the benefits of low-hanging fruit as part of a balanced diet ...er ...approach. You knew what I meant, right?
The Chief Visionary
"The person who says it cannot be done should not interrupt the person doing it."