What's behind the decrease in awards placed against contract vehicles?
Sunday, June 02, 2013
Posted by: Guy Timberlake (theasbc.org/visionary)
I guess I could also have titled this one "What's behind the increase in 'open market' awards by federal agencies?" although the term open market typically refers to the GSA Schedule and my discussion is about buys against any established contract vehicle, or not.
Yes I'm back with another look at what I see as an anomaly in how federal agencies are making contract awards. To remind all of the younger folks out there, or those who just came into government contracting in the last 10-15 years, there was a time when getting meaningful business meant having access to a contract vehicle. You know, a GSA Schedule, Blanket Purchase Agreement, GWAC, MAC, etc. If you didn't have one, you needed to partner with someone that did or you could kiss your opportunities and aspirations of success goodbye.
That was the belief system most of the industry veterans I worked with subscribed to back in the 80's 90's and early 2000's. Things don't seem to have changed all that much, as far as what people believe, that is.
When I first started digging around into this shift, I ended up coining the "No Contract Vehicles Needed" theme and use it as the name of a market intelligence seminar/webinar I host each month (three times actually, for different discipline areas). I still want to be sure folks don't think of this as me saying you don't need a contract vehicle to generate sustainable business in the federal sector, but I did just do another update on FY13 spending to see where things stand.
Additionally, I also went back a few years to see what the balance of awards by award type looked like three, four and five years ago. What I found continues to build the level of intrigue for me. In FY2009, the difference between awards made on contract vehicles versus those where the award instrument was a definitive contract or purchase order, was over $33 billion in favor of delivery/task orders, BPA Calls and initial awards of GWAC, BPA and other Indefinite Delivery Contracts. That difference was $35 billion in FY2010 but then dropped to only $18 billion for FY2011. FY2012 saw it dip to $16 billion and for FY13 YTD, the pendulum has swung all the way to the other side, with awards made via definitive contracts and purchase orders leading by better than $16 billion. See for yourself:
For those who have not seen my earlier posts, this represents the reported governmentwide spend YTD for competitive and non-competitive awards based on the Award/IDV Type. Also, this represents hundreds of thousands of buys where more than 1100 NAICS Codes (and 2200 PSC Codes) were referenced in the awards.
I'm just curious what it all means for Government, and if Industry, especially small federal contractors, have adjusted their radar (and tactics) to account for this shift.
Peace.The Chief Visionary
"The person who says it cannot be done should not interrupt the person doing it."