If you’ve had an opportunity to read any of my #Ask@GovConGuy articles, you might have seen the one’s where I explained the purpose and usage (by government and industry) of NAICS Codes and PSC Codes. No? Then take a quick look (that’s why I provided the handy links!) before you go any further as that will go a long way to explaining my approach for this piece.
Uncle Sam leverages two classification systems to describe the purpose of their acquisitions and procurements, and the target of those actions, a/k/a what they’re buying. Know which system serves what purpose? If not, you might be surprised to learn you are likely missing lots of opportunities that are right in front of your face, literally.
For example, if an agency wanted to purchase the services of an electrical contractor, how would they describe that purchase? Chances are good that if I were an electrician I could find work listed under the NAICS Code 238210, but is that the only NAICS Code agencies might use to purchase my services? Nope! Choose from a bevy of Product and Service Codes that come under the headings of Equipment Related Services, Electronic & Communication Services, Construction Services, Facility Related Services and more, and you have upwards of fifty different PSC Codes that can be used in conjunction with just as many NAICS Codes, if not more. Like I said, read the other articles first.
For the record, the average ratio of the number of PSC Codes referenced in a fiscal year versus NAICS Codes is 2:1. More than twice as many PSC Codes are used by agencies to describe the part of a purchase not described by NAICS Codes, when NAICS Codes are used. FY15 year-to-date there have been 2,584 Product and Service Codes referenced by agencies reporting obligations to the Federal Procurement Data System – Next Generation. As best I can tell, PSC Codes are referenced on every contract action in FPDS-NG.
Before I show you the top products and services purchased so far this fiscal year, let me get something off my chest. Established contract vehicles, also known as “hunting licenses” and task order/delivery order contracts and formally known as Indefinite Delivery Vehicles (IDV) are not the only way to do business with the U.S. Government. No matter what the GSA Schedule “mills” and the segment of unscrupulous consultants try to sell you on. They are also not necessarily the easiest for you or agency buyers. It all depends on what you sell, to whom you wish to sell and the policies of the agency regarding what they determine offers the best overall acquisition approach for their needs.
To that end, I provide you with a breakdown of the dollars obligated by agencies this fiscal year by the AWARD and IDV type. Everyone who’s participated in one of our competitive intelligence workshops should nail this, but for the record, a ‘Definitive Contract‘ and ‘Purchase Order‘ are not IDVs. They represent two of the four types of ‘Awards’ that for the most part represent the “work” and the “money” all of us are fighting for every day. The other two “Awards” are specifically tied to IDVs as they represent they mechanism agencies use to place orders against GSA Schedules, BPA, BOA, GWAC and Indefinite Delivery Contracts (IDC) such as an IDIQ. Got it? Good.
Now let’s see what’s been purchased this year. Keep in mind the number you see are based what’s available in FPDS-NG which means ninety days of DoD spending is not included in these numbers. Needless to say, there are billions not accounted for in this report. Nevertheless, we’ve cracked two hundred billion in FY15 obligations which is not a bad pace. So what are agencies buying? This next graphic shows the top ten PSC Codes by spending, when agencies made awards under the GSA Schedule, IDCs, BOAs and GWACs:
(click on images to expand)
Remember, we’re only looking at dollars attributed to the top ten PSC Codes for each award type. If you combine the above number with obligations made under Blanket Purchase Agreements (BPA) you come out at just over $34 billion. Here’s what BPA dollars look like for the top ten PSCs:
Now $34 billion in obligations is nothing to sneeze at, that is, until we pull in the big guns! That would be the awards made without the use of an IDV in the form of ‘Definitive Contracts‘ and ‘Purchase Orders‘ which come out to under $43 billion for it’s top ten:
So what do you do with information like this? Boil it down! Look at your customers, how they buy, what they buy and more, to ensure you know and understand all of the moving parts. I just heard today from a company I know where they may have missed a “sweet spot” opportunity coming out of a different contracting shop associated with their customer. You can identify down to the contracting office level, what they buy based on whichever criteria you want to use. Bottom line? Few if any surprises, unless they really go outside of their customary routine.
If you are looking for teaming partners that have certain vehicles or types of contracts then the same rules apply. I can tell you whose contract (by issuing agency) is being used by which contracting agency (even if inter-agency contracting is the method). I can tell you which vendor has that vehicle and how much work they gotten, by agency and more. I also teach all of this.
Understand how agencies describe what you sell (and what they buy) to ensure you are less often stuck on the outside looking in at work.
Guy Timberlake, The Chief Visionary
“The person who says it cannot be done should not interrupt the person doing it.”