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Chief Visionary's Blog, FEATURED ARTICLES, Industry News, Op-Ed/Blog, Simplified Acquisitions

Why ‘Simplified’ Business is Still Good Business in FY2015

Want to hear a good joke? I’ve got a million of them! Want to hear about contracting dollars Uncle Sam spends that continue to buck trends? I’ll show you nineteen billion of them, and growing, and that’s no joke either.

Federal civilian, defense and intelligence agencies obligate dollars for goods and services in a variety of ways, through a variety of award instruments. Some are easier than others and that conveys to the cost of doing Taxi by Al Fed / © Some rights reserved. Licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives licensebusiness for both government and industry. For vendors, particularly small business concerns, I want to help them do what I refer to as minimizing their CAB fare. You know cab fare, right? That would be the cost of getting from Point A to Point B when you’re in the city or leaving the airport, except the CAB I’m referring to is the Cost of Acquiring Business also known as your company’s tab for finding opportunities (Point A) and finding your way to winning those opportunities (Point B).  My point, is there are ways of doing business with Uncle Sam that inherently cost less.

For example, what if you could pursue and win business without a GSA Schedule, BPA, IDIQ, etc.? Then you wouldn’t have the expense of pursuing a ‘hunting license’ on top of other costs. Did you know half of the fiscal obligations reported to FPDS-NG during FY14 were not orders placed against established contract vehicles?

What if the solicitation type for purchases was less arduous for one type of procurement versus another? Generally speaking, your cost of responding is less when a Request For Quotation or RFQ is used versus a Request For Proposal or RFP. Lower level of effort?  That would help keep your CAB fare low, right? The procurement method 6911798_ml low hanging fruitI’m referring to is Simplified Acquisitions and for several other good reasons to consider these as part of your approach to growth in the federal sector, click here to watch a short video I put together describing fifteen reasons we refer to these as ‘low-hanging fruit!’

So let’s take a look at where things are FY2015 year-to-date. Things are moving along better for some than others, but Uncle Sam is still shelling out contracts and there are opportunities. We hear chatter about increased spending in certain areas such as civilian agency IT, but the billions of fewer dollars obligated last fiscal year versus the year before still weighs on the minds of many. Which is why I’m glad I have some good news to share! First, let me start with a reminder of how good a year FY14 was for purchases made using the Simplified Acquisition Procedures. Agencies obligated over $19 billion using this procurement method last year. Why is that good? Let’s start with this:

20150103 FY10 through FY14 Total Obligations vs SAPLast years obligations via Simplified Acquisitions capped off a five year stretch of increased spending resulting in average growth of one billion dollars in additional obligations each fiscal year. At the same time, overall government contract spending declined by $100 billion, making the upward trajectory of simplified buys more pronounced.

Then there are the other reasons such as:

  • Nearly two-thousand small businesses captured at least $1 million in simplified obligations in FY1432323643_l slice of american dollar pie
    • Over five-thousand small federal contractors saw obligations of at least $250K in FY14.
  • More than sixty percent of FY14 simplified obligations were issued as definitive contracts or purchase orders.
    • These awards are not orders placed against established contract vehicles such as the GSA Schedule.

I think you’ve got the picture.  So how is FY15 stacking up against FY14? Not bad at all. In fact, the difference in reported Simplified Acquisition obligations for the current year is only $1.6 billion less than the same time last year.

'15 Reasons Why We Call These Opportunities Low-Hanging Fruit!'Here’s why this is good, yet again! The Department of Defense reports it obligations ninety days in arrears (to the public) which means those dollars are not included in this total. Try it this way, total obligations reported to FPDS-NG for FY15 are $125 billion whereas it was $185 billion this time last year. The major difference is DoD who reports $62 billion for this year and reported $118 billion for last year. That’s $56 billion less. Not only am I willing to bet DoD has obligated close to that amount for this year, I’m also wagering at least $1.6 billion of that amount is Simplified Acquisitions. Think Defense Logistics Agency, just for starters.

Here’s a look at simplified spending by department this year (click on it to enlarge):

20150327 SAP Oct 1 - Mar 27 FY14 and FY15Let’s assume though that DoD has only obligated half of that $56 billion this year. I still say there are enough Simplified Acquisition dollars in there to bring the FY15 total up to FY14 levels, or higher. What this means to me in an trendy kind of way is that we could see another increase in simplified obligations, while the top line decreases a little or a lot. Either way, it means more potential opportunity for small federal contractors who are tracking opportunities to put something in their coffers. It can be easier than waiting to see what comes over the fence on that IDIQ contract where you are a sub. Something to think about.

Here’s my last bit of information before I dangle the carrot.

FY15 YTD, there are 1,936 Product and Service Codes referenced in the nearly five billion in Simplified Acquisition spending, and remember, PSC Codes describe WHAT the agency was buying versus HOW they were going to use it, 27080785_ml keep it simplewhich is what the NAICS Code represents. The top ten PSC Codes account for $1.2 billion of the spend and the notables for my small business friends around the country include:

  • ADP Software
  • Medical and Surgical Instruments, Equipment and Supplies
  • Support – Professional: Other
  • IT and telecom – Other IT and Telecommunications
  • Airframe Structural Components
  • Support – Professional: Engineering/Technical
  • Housekeeping – Custodial Janitorial
  • Support – Professional: Program Management/Support

By the way, small business concerns have captured $640 million of the $1.2 billion represented by the top ten PSCs. Not bad.

Okay, here’s the carrot. If you’re interested in knowing more, I will host a free one hour webinar on Wednesday, April 8 at 2:00PM ET and will provide agency level detail, competition and much more to everyone who sends an email to webinar@theasbc.org with the subject line ‘Good Business!‘ I have to receive the email by COB (5pm Washington, DC time) on April 6th.

I like to think of Simplified Acquisition as a ‘gateway’ opportunity. Did I mention selling this way nearly twenty years ago led to my first million dollar deal with the Navy? Heck, at the end of FY14 we helped one of our members land a $2.5 million dollar simplified acquisition award, also with the Navy.

Hmm. I’m sensing a theme here.

Peace!

Guy Timberlake, 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.'

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