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Setting Your Hook for Q4 Low-Hanging Fruit!

Let it be known I am not a sport fisherman, but I will teach my daughter the things my father taught me and hopefully I will get to enjoy days of having hooks in the water with my little girl somewhere peaceful. Somebody else can clean our catch should we be so lucky!

As far as fishing in the sea of government contracting during fourth quarter, been there and done it many times for many years. It’s not as big as it used to be, but it’s still full of opportunity, if you know what you’re looking for and if you have the right bait. There’s no secret I have a favorite pursuit during this time of year and I’ll tell you the pond is stocked a heck of a lot fuller than the days I was fishing it. More than twice as much in fact. But enough of that, let’s get to the good stuff!

When it comes to the state of purchases made by agencies using Simplified Acquisitions, the phrase that pays is “FY2014 was a banner year for Simplified Acquisition spending!”  And it was with over $19 billion in goods and services purchased using ‘simplified’ rules resulting from government-wide spending of $443 billion.

That’s a lot of dough in both buckets and nearly a two billion dollar increase in ‘simplified’ obligations from the previous fiscal year!14894648_l

Now compare FY2014 to FY2010 when $13 billion in ‘simplified’ dollars resulted from $540 billion in total fiscal spending, and you might understand why we’re still psyched! Apparently the lower  the top-end, the bigger the pot of ‘Simplified’ dollars is the trend over the last five completed fiscal years.

Speaking of trends, we happen to like the one that shows an average increase of one billion dollars in obligations each year from FY2010 through FY2014.

Shall we make it a sixth? Well that does seem to be the plan. So in addition to a little soothsaying about how the FY15 fourth quarter could look for simplified obligations, I’ll go out on a limb and offer a prediction for FY15 overall. Why not, right?

Simplified Acquisition Spending FYTD

As of this day in FY2014, federal agencies were reporting just over $11 billion in competitive and non-competitive fiscal obligations  made using the Simplified Acquisition  Procedures. For the current fiscal year, agencies are reporting just over $9 billion in dollars obligated this way. It’s just about two billion less than what we see reported for FY14.

Dod-seal pngOrdinarily this would not be a good thing except there’s a bucket of money not currently accounted for in the current spend.

Who’s the culprit? None other than the biggest spender in federal contracting, the Department of Defense. The reason?  In the Federal Procurement Data System-Next Generation, their obligations are made public ninety days in arrears for operational security. This means all of the transactions for the armed services, SECDEF and the ODA’s (Other Defense Agencies) like DLA, WHS and so on, don’t appear in the totals just yet.  But believe me when I tell you they are there in abundance. Do you think three months of DoD spending could account for that almost $2 billion? I’ll bet anyone dinner at Ruth Chris’ by the time that ninety day window closes, we’ll more than make up for that difference.

So now begins the fun!

Interesting Facts About the FY14 Q4 Spend

If you are tracking business opportunities for fiscal year end (I assume you are or you probably wouldn’t be reading this) you may have caught the earlier fact that agencies spent $11 billion of $19 billion from Q1 to Q3 of FY14, which means just over $8 billion of these streamlined dollars came pouring in from the start of July to the end of September last fiscal year. Here’s a snapshot of 8230212_ml fruit dollarshow that happened:

  • Sixty-one federal agencies, boards and commissions reported ‘actions’ during Q4 FY14
  • Department of Defense accounted for over half of the spending and the rest of the top ten departments ‘ringing the bell’ looked like this:
    • State Department
    • HHS
    • Justice
    • Treasury
    • Interior
    • Transportation
    • VA
    • Agriculture
    • Homeland Security
  • Nearly $6 billion was obligated against purchase orders and definitive contracts (as opposed to awards made against established contract vehicles such as GSA Schedule, BPA and IDIQ).
  • Small Business Concerns captured $5 billion (with and without set-asides).
  • Small Business Set-Asides accounted for $2.5 billion with Total Small Business Set-Asides accounting for $1.6 billion of that total.
  • Opportunities solicited on FedBizOpps accounted for just over $3 billion in obligations.
  • Competitive awards accounted for nearly $6 billion in FY14 Q4 obligations.

In all honesty, I don’t expect the FY15 Q4 spend to look terribly different except for more dollars being obligated. Yep! I did say more dollars. Keep reading and you’ll understand why.

What’s It All Mean?

If I’m a fiscal year-end fishermen (and I am!), I’m tapping every relationship I have and those of my partners in order to stay top of mind. That’s what counts during year-end. By the way, if you 19310684_ldidn’t begin this process during the early part of Q3, you’re behind the eight ball and playing catch-up to others. Stay on top of the buyers who make ‘Simplified’ purchases (they are easy to spot) and make them aware of pricing, whether you accept GSA SmartPay cards (they’re not just for Micropurchases you know!) and similar. Look at previous spending for each one to understand how they typically buy by reviewing the Award/IDV Type. Remember, the majority of Simplified Acquisition buys are not made against an established contract vehicle, so if you don’t have a GSA Schedule, IDIQ or other, don’t sweat it, but do your research to understand which customers lean that way and for what products and services.

Here’s something else to consider. The federal spend via Simplified Acquisitions during FY13 Q4 was higher than it was in FY12 Q4 despite a $56 billion downturn in overall spending. 39302590_l

But wait! There’s more!

FY14 Q4 obligations were $3 billion higher than FY13 with a $20 billion downturn. How many fewer dollars will agencies spend this year overall? It seems as if it can only help in the area of Simplified Acquisition spending!

Uncle Sam looks to be on track for another big year of spending under the Simplified Acquisition Procedures, resulting in a sixth year of increased spending this way. In fact, I think we’ll continue to see an average increase of one billion more in obligations of simplified buys.

Why? Because according to a few agency procurement officials, efficiency in contracting is a big deal right now and that represents one of the core tenets of buys made using Simplified Acquisition Procedures. Just check out FAR Part 13. Think it couldn’t get any better? Just wait until they increase the threshold to $500,000!

How About More Detail?

I plan to host a webinar in the next two weeks that will dive much deeper into fiscal year-end spending via 9519853_l fishingSimplified Acquisitions to include what agencies are buying, drilling down to 32211011_m webinarsub-agencies and specific contracting offices and more! If you would like to be notified when it’s posted, follow me on Twitter at @SimplifiedAcq or @theasbcguy.

On Tuesday, July 21st in Columbia, MD, I’m hosting ‘The Complete Simplified Acquisitions Workshop!‘ that provides a comprehensive review of these buys and how agencies leverage them, and then we start working on pipelines as in populating them. That’s why these sessions are limited to just ten (10) participants!

I hope the low-hanging fruit fish are biting for you during this fiscal year end.

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

Go-To-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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