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Q4 Dollars by the Day: Agency ‘Simplified’ Spending at Fiscal Year End

To size up the state of recent federal purchasing when agencies use 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, continuing a streak that averages a one billion dollar increase in Simplified Acquisition spending each year since FY2010. That streak, it seems, is well on it’s way to making it to a sixth year based on how things look in FY2015. But I’ll discuss this and more at the end of this piece as there’s something more timely to discuss, given what’s around the corner.9519853_l fishing

Since we’re about to enter the final month of FY2015, I thought I would offer insights into spending by the day when agencies leveraged Simplified Acquisitions for end of year purchasing.

In my article Setting Your Hook for Q4 Low-Hanging Fruit! published on the GovConChannel, I discussed the significant changes in Q4 Simplified Acquisition spending from FY13 to FY14 to include how federal agencies did more with less by increasing their output of Q4 obligations in FY14 when their overall fiscal spend had been Shocked Excited FSS vs SAPreduced by more than $20B from FY13. Not only did agencies increase Q4 spending by more than $1 billion, the total spend for FY14 obligations made using Simplified Acquisitions Procedures jumped by nearly $2 billion on the fiscal year.

To further emphasize the significance of this feat let me add this all occurred at the same time sales on the GSA Schedule fell by over $2 billion, sliding from $35.2 billion to $32.9 billion from FY13 to FY14. Coincidence? I don’t think so.

So how’s your Q4 turning out so far? Are you seeing the opportunities and realizing the dollars you hoped for? While customers in the agencies are pretty much done when it comes to submitting new requirements to be purchased, the folks in contracting still have a ways to go. In Simplified Acquisition buys alone they still have billions to obligate, especially if the trending increases continue. The graphic below shows how agencies have increased Q4 obligations from FY13 to FY14 and if I added in FY12, it would look pretty much the same with a $1.5 billion increase in SAP obligations during a $56 billion downturn in overall spending from the previous fiscal year.

20150824 Uncle Sam Love Grows for SAP During Q4Why the blanks for FY2015? Since DoD obligations are reported ninety days in arrears I don’t have the actual totals. However, I do know as of July the government-wide spend, when it comes to Simplified Acquisitions, was more than $600 million ahead of FY14 spending during the same period. For that reason I’m confident when the numbers do come through, we’ll see a continued increase in daily and overall spending.

HCB Guy on Mic2As I prepare for presentations in Kentucky this week at a government contracting conference hosted by the Kentucky PTAC, I’m working with some of our members and other participants of ‘Finding and Winning Simplified Acquisitions‘ and  ‘The Complete Simplified Acquisitions Workshop!™‘ to get an agency and contracting office-level view of who is buying what these companies sell when agencies tap the Simplified Acquisition Procedures.

I fully expect several of these companies to capture business in the not-so-distant future based on my advice.

Here are just a few of the reasons this approach has and continues to work:

  • The majority of these obligations are made to standalone contracts versus established contract vehicles such as IDIQ and BPA contracts
  • Most of these dollars are initial award versus modifications such as ‘New Work in Scope’ or ‘Exercising an Option’
  • More than seventy percent of these dollars are competitively awarded
  • Small business concerns do very well during Q4 capturing over 60% of these year end dollars
  • Buys above the synopsis threshold populate FBO.gov (although that should not be the first place you learn about these opportunities)
  • Companies who developed relationships with purchasers earlier, do well in buys under $25K that do not require a synopsis

So in addition to the larger game you may be hunting, these streamlined buys grow in numbers because of increased use by agencies. Make these buys a part of your hunting routine so you develop knowledge and relationships before you actually need them. Learn how agencies invoke the provisions at FAR Part 13 when doing business and understand how evaluations of quotes and offers for these buys can differ 39302590_l(favorably) than other purchases.

Finally and especially for small business concerns, be sure you understand the economic impact of agency purchases made this way and how they can help level out your revenues and profits throughout the fiscal year. The graphic below represents the very real impact realized when every small business concern that made the report accumulated at least $250K in obligations via Simplified Acquisitions or the GSA Schedule in one fiscal year. Based on the state of your small business, $250K could represent a small part of your annual revenues, or most of it.

Take a look at how the numbers stack up when we compare these two acquisition methods:

20150420 Who Wins FSS vs SAP at 250K Five YearsKeep your eyes open and ensure you have a pipeline balanced with long and short-term opportunities so you can weather the twists and turns of this business and achieve meaningful growth as well.

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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