Originally published May 28, 2014
Okay I have to admit it took a lot for me to use the phrase “low-hanging fruit” for this article because I find it to be one of the most over-used and absolutely annoying phrases in the context of government contracting. But if it helps me sell my point, it’s worth it.
When I hear someone mention they are looking for low-hanging fruit, my usual retort is something along the lines of “Already been picked by those in the know,” or similar because I truly believe if there were opportunities ripe on the vine just waiting to be plucked, one of any number of experienced sales, business development or capture professionals with relationships and insight would make that low-hanging fruit gone baby gone!
So why am I writing this piece if not just to be annoying and see how many times I can include ‘low-hanging fruit’ in one article? To briefly discuss one type of procurement that really could be a type of low-hanging fruit for small federal contractors. In fact, it’s the very same purchasing method that contributed to me winning my first million dollar deal with the Navy way back when I was an inside sales wonk. This particular piece of fruit is known as a Simplified Acquisition which is very different than a Micropurchase, but typically less arduous for Government and Industry, than traditional buys.
Shall I go on?
Purchases made this way by government agencies, boards and commissions (sixty-four in all) during FY13 accounted for over $17B in obligations. More than twelve-hundred NAICS Codes were referenced and the majority of the buys were competitively awarded. The buys included goods and services, construction and R&D and the primary award instrument was a purchase order, a stand-alone contract, as opposed to an order placed against an established contract vehicle such as a GSA Schedule, GWAC, BPA or Indefinite Delivery Contract. There’s also an inherent preference for contracting with small business concerns for which the small business community needs to do a better job at ‘helping’ agencies understand and see there are plenty of ‘responsible small business concerns that are competitive in terms of market prices quality and delivery.” That would be the ‘Rule of Two’ agency deputy secretaries, chief acquisition officers, senior procurement executives and small business directors were reminded of by the heads of OFPP and SBA on June 6, 2012.
On that note, small business concerns did receive nearly ten billion of the $17B obligated during FY13. Only seven billion to go! But again, small business concerns need to do their part to identify these buyers and become top-of-mind for future buys. (in FY2014, Simplified Acquisition spending crested $19 billion making the five year average increase one billion dollars each fiscal year from FY10 to FY14)
Did I mention Uncle Sam obligated $17B this way during FY13? As compared to $15.4B the previous fiscal year, but here is the interesting part, during FY12, governmentwide obligations were $517B whereas in FY13 they were $461B. Did you catch that? The year agency spending saw a $56B downturn, spending under Simplified Acquisitions increased, a lot.
Here’s the part a lot of folks misunderstand. Simplified Acquisition buys are normally subject to the Simplified Acquisition Threshold which starts where the MicroPurchase Threshold leaves off and goes up to $150K. That is, unless the buying agency invokes the Test Program for Certain Commercial Items which allows them to use the same streamlined procedures to make buys valued up to $6.5M. That got your attention didn’t it? (This test program was made permanent in the 2015 NDAA)
Last thing I’ll mention. These types of purchases are usually solicited via an RFQ versus RFP which again can mean substantially less work for Government and Industry. Question. Can anyone out there from Industry tell me the ‘legal’ difference between an RFQ and RFP? No fair if you are a former GS-1102!
Guy Timberlake, The Chief Visionary