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About Those ‘Federal Business Opportunities’

Questioning the logic of pursuing solicitations posted by civilian, defense and intelligence agencies on the Federal Business Opportunities portal? You’re not alone as opinions about the platform range from it being regarded as vitally important all the way to those who view it as a fool’s errand. Nevertheless, the first fact I’ll share in this article is that Uncle Sam reports obligations of nearly $100 billion dollars during FY2014 when FedBizOpps (or FBO) was leveraged.

That number represents roughly one-quarter of all competitive and non-competitive dollars reported by agencies to the Federal Procurement Data System-Next Generation or FPDS-NG. No matter how you slice it, that’s a lot of dough. With that in mind, are there and what are the opportunities on FedBizOpps? Conventional wisdom espoused by a number of agency representatives depicts FBO as the 11053385_ml opportunitiesveritable ‘center of the universe’ for small companies pursuing contracting and subcontracting opportunities. If it were only that simple. There is more than one way for agencies to solicit vendors with information about new opportunities that might peripherally involve the FedBizOpps portal, if at all.

For example, if the purchase is to be awarded using an established contract vehicle (known as indefinite delivery vehicles or IDVs), only the vendor or vendors awarded the contract vehicle are likely to see those opportunities. Why vendor or vendors? Mainly because a large number of IDVs of the BOA (Basic Ordering Agreement), BPA (Blanket Purchase Agreement) and IDC (Indefinite Delivery Contract which includes IDIQs, MACs and more) variety can be and are single award contract vehicles.

3138176_ml businesswoman arm wrestlingThis doesn’t take into account non-competitive buys.

FY14 saw over $20 billion in FBO obligations tagged as non-competitive or follow-on’s to competitive buys (I consider follow-on’s to be non-competitive), bringing the tally for competitive buys on FBO to $80 billion.

Generally, non-competitive buys are required to be synopsized, but not necessarily on FedBizOpps. If being sole sourced under an established contract vehicle, visibility to that announcement could (again) be limited to companies awarded the contract vehicle.

What if the amount of the purchase doesn’t warrant a synopsis on FedBizOpps?

While it can vary based on the agency,  the purchasing method and terms of the contract/contract vehicle to be used, buys under $25K typically fall below the threshold where agencies are required to issue a synopsis on FBO. Want to venture a guess as to how big the bucket of dollars is between $3K and $25K? If you’re not in the ‘billions’ category then you are way off.

What’s the significance of $3K?

That ‘s the ceiling of the Micropurchase Threshold (or the basement of the Simplified Acquisition Threshold, depending on who’s telling the story) and micropurchases are not synopsized on FBO (nor captured in FPDS-NG). This is another big bucket of dollars you should be aware of. Think about it this way, GSA cites $17B as the FY14 spend on agency purchase cards. Subtract the nearly $3 billion reported to FPDS-NG as SmartPay payments above the micropurchase threshold, and I think you’ll get the idea.

Okay, so back to FedBizOpps and the opportunities posted there.

During FY2014, sixty-two agencies, boards and commissions contributed to the flow of obligation dollars. 9519853_l fishingDoD was number one by a long-shot as the distance between them and number two is more than fifty billion dollars. Number two is VA and the top five rounds out behind them with HHS, DHS and GSA. Collectively, the top five accounts for $86 billion in competitive and non-competitive FBO obligations.

Did I mention I’m only looking at initial awards? That’s right, the numbers I’m reporting don’t include modifications (which accounts for much more than half of all fiscal obligations). With that in mind, the overall impact (again, without modifications being considered) of the $100 billion in FY14 FBO obligations is… two trillion dollars! That number is the sum of the base value of contracts and contract vehicles referenced in this report plus the value of all options to those contracts if they are ultimately exercised. Yep, that’s the exact same look I had on my face when I reviewed this information for the tenth time!

Curious about the distribution of dollars by ‘Award Type?’

Delivery order comes out on top with $66 billion of the spend. While delivery/task order awards are buys made against a BOA, FSS (GSA Schedule), GWAC or IDC contract, I’ll bet breakfast at Silver Diner the bulk of these dollars are obligations against agency-specific IDIQ contracts. I’ll cover that topic during the webinar on FBO spending in January. Stay tuned.

Obligations made to IDCs during initial award is just under one billion. I suspect those are dollars to single award indefinite delivery contracts. For the last category of IDV, BPA spending comes in at $611 million dollars.

What about buys when agencies did not use an established contract vehicle?

The combined obligations to definitive contracts and purchase orders comes in just over $32 billion dollars when FBO was a factor. Neither of these award instruments requires agencies to reference a ‘master’ contract number as they do when a buy is made against a GSA Schedule or IDIQ. They have their own terms and conditions (for each buy) and don’t allow recurring buys which is a perk of using contract vehicles. Still, as of a few days ago, 10110437_l businessman binocularsmore than half of all FY14 obligations made by agencies and reported to FPDS-NG, went to a definitive contract or purchase order. Hmm.

One piece of advice I offer and subscribe to when it comes to ‘opportunities’ on FBO is, if your first visibility to an opportunity is when a live RFP or RFQ hits FedBizOpps, your chances of winning are pretty slim. Selling commodity products? You might be able to bend that rule, but even so you are behind the proverbial eight-ball. It’s not necessarily due to a ‘wired’ opportunity as so many like to think and say, it’s as much and more that 30123454_l fixing businessyou don’t have competitive and customer insight to support a good decision. If the agency is not known to you (or you to them), you’ll essentially be throwing something at the wall to see what sticks, which some folks do call a strategy.

On a side note, if the opportunity did come from an agency where you are prospecting or currently doing business and you were caught by surprise, it’s likely time to change how you develop and manage relationships and track competitive information.

Here’s the last bit of information for this piece and it refers to what agencies were buying.

More than one thousand NAICS Codes are referenced for FY14 with twenty-four in excess of one billion dollars in obligations, and nearly one hundred NAICS Codes with less than one billion but at least $100 million. The top five NAICS Codes account for $31 billion of the total obligations and they are:

  • Petroleum Refineries
  • Commercial and Institutional Building Construction
  • Pharmaceutical Preparation Manufacturing
  • Aircraft Manufacturing
  • Engineering Services

For another perspective, obligations to NAICS Codes under the category of:

  • Construction (23) account for $14 billion;
  • Manufacturing (31-33) account for $50 billion;
  • Transportation and Warehousing (48-49) account for $3 billion;
  • Professional, Scientific and Technical Services (54) account for $17 billion, and;
  • Administrative and Support and Waste Management and Remediation Services (56) account for $4 billion.

11385440_l on targetNow the information I’ve provided barely scrapes the surface of the information (freely) available to support strategic and tactical activities tied to opportunities posted on FBO or anywhere in the government contracting community for that matter. You can garner a high-level and foxhole level view using information readily available at 11224434_l questionyour fingertips from public sources. Of course, you’ll still need to leverage relationships, but the same information can help you identify the relationships that matter, whether you are selling direct or subcontracting.

Part of the reason for this commentary is because I bear witness to industry (primarily the lobbyists of organizations who stand to profit most from the DATA Act and similar) demanding more information (in a format most conducive to increasing their profits) when there are volumes of freely accessible and usable information already made available by agencies, not being fully utilized.

My opinion? Waste not, want not.

Peace!

The Chief Visionary
http://www.theasbc.org/visionary

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

About Editor-in-Chief Visionary

Guy Timberlake is the Editor-in-Chief Visionary of GovConChannel and oversees the creation and curation of relevant and timely 'News And Information That Matters To Small Government Contractors.'

Discussion

5 thoughts on “About Those ‘Federal Business Opportunities’

  1. Reblogged this on GovConChannel and commented:

    Receiving mixed signals about how FedBizOpps impacts your ability to find and do business in the federal sector? Read this…

    Like

    Posted by govconchannelchief | March 12, 2015, 18:48
  2. The Federal Procurement Data System currently shows $422B in obligations for FY14 (still waiting for the other $18B in DoD obligations to become public). Of those dollars, $258B have ties to notices posted on #FedBizOpps. That’s $105B in initial awards (before modifications) and of that amount $84B was competitively awarded (Competed Under SAP;Full And Open Competition;Full And Open Competition After Exclusion Of Sources).

    Like

    Posted by govconchannelchief | December 27, 2014, 22:19

Trackbacks/Pingbacks

  1. Pingback: Opportunity: Small Business Channel Partners for Symantec, McAfee and Citrix – Defense Media Activity | GovConChannel - September 1, 2015

  2. Pingback: GovConChat™: FedBizOpps Effect on Federal Procurement Dollars | GovConChannel - December 29, 2014

  3. Pingback: Reconsidering the Respect FedBizOpps Gets | GovConChannel - December 28, 2014

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