When it comes to small federal contractors and biggest bang for the proverbial B&P bucks, things aren’t always what they seem. With all of the attention given to contract vehicles like GSA’s STARS II, ALLIANT Small Business and the Federal Supply Schedules, one might expect those and other Multiple Award Indefinite Delivery Vehicles to do well in a competitive analysis. But that isn’t always the case.
This ranking and comparison looks at the small business economic impact when companies won a cumulative $250,000 or more during the first three quarters of FY2015.
– Guy Timberlake, The Chief Visionary
The parameters for this review are based on initial award obligations (versus modification obligations) signed during the period of October 1, 2014 through June 30, 2015. Each obligation indicates being issued to a small business concern by agency contracting officers regardless of if the procurement was set-aside or unrestricted. Finally, in order to make the list, each company must have accumulated $250,000 or more in obligations during that period in at least one of the eight Procurement Methods or Award/IDV Types listed. Our source for the data and information collected was the Federal Procurement Data System – Next Generation.
Several of the small companies making the cut achieved the minimum threshold in multiple categories.
The Total Spend
Based on the parameters described previously, civilian, defense and intelligence agencies made initial award obligations of $29 billion to small business concerns during the first three quarters of FY2015.
Based on 10,228 uniquely identified companies, the average obligation was $2.8 million per company.
– all but twenty-two companies accumulated more than $250K
– 3,499 companies were obligated between $1M and $5M
– there were 657 companies obligated between $5M and $10M
– fifty-two small business concerns were obligated more than $50M
– the top five companies by obligations shared a pot worth $1.9 billion
How Dollars Went From Agencies to Small Businesses
With the exception of one, each of the eight items listed below represents an agreement, contract or contract vehicle. In the FPDS-NG system they are described as Awards and IDVs (Indefinite Delivery Vehicles). A simple explanation of the difference is that an IDV allows an agency (or agencies) to place orders for supplies and services against an established single or multiple award contract vehicle such as an IDIQ or GSA Schedule.
These orders (which represent the majority of obligations to these vehicles) are known as Awards and are represented as either Delivery Orders or BPA Calls in FPDS-NG. Delivery Orders (Goods) also represent Task Orders (Services) in the FPDS system. Delivery Orders also represent orders placed against BOA, FSS, GWAC and IDC vehicles in FPDS-NG. BPA Calls are delivery and task orders specifically for Blanket Purchase Agreements.
Two other Award Types exist which do not represent orders placed against established contract vehicles. These are Definitive Contracts and Purchase Orders. We refer to these as ‘standalone‘ contracts because they only have one contract number as opposed to orders placed against established contract vehicles which have two contract numbers, one to identify the order and one to identify the contract vehicle the order is being placed against.
Finally, the item that is neither an Award or IDV is number three, Simplified Acquisition Procedures, which represents a purchase method transcending all of the Award and IDV Types listed. For this reason, no Simplified Acquisition dollars (roughly one billion based on the report parameters) are included in the totals of the seven Awards and IDVs, eliminating these dollars being from being double-counted.
So, without further adieu, here’s our list of the ways to small businesses won $250,000 or more in federal contracts last fiscal year!
Indefinite Delivery Contracts
IDCs, which are a sub-category for Indefinite Quantity (IDIQ), Definite Quantity (IDDQ) and Requirements (IDR) contracts, accounted for just under $15 billion in small business obligations through the third quarter of FY15. 4,276 companies captured a piece of this rock with $9 billion of those dollars resulting from single-award IDCs. This means the majority of these dollars didn’t require a hunting licenses but a license to kill!
Thirty-three federal agencies, boards and commissions issued the IDCs used in this spending with DoD waaaaaaaayyyyyyyyyy out in front with over ten billion served. Dollars that is.
What’s interesting is IDCs and it’s cousins account for the most dollars by far, but in the end, those dollars didn’t reach as many small business concerns as some other buys we’re looking at.
These are plain old bilateral contracts that happen to account for nearly half of all fiscal obligations each year, for several years. Agencies don’t place orders against these because they are not IDVs. Definitive Contracts are an Award which means they pretty much always have money associated with them (as opposed to many IDVs that are accompanied by a ‘zero’ out of the gate) and represent “work to be done and money to be paid” if everyone does their part.
For this comparison, Definitive Contracts not resulting from Simplified Acquisition buys accounted for $5.4 billion and touched 2,517 small business concerns. That would be more than half the number of companies impacted by IDCs with about one-third of the spend of IDCs. Not bad!
Simplified Acquisition Procedures
On Tuesday, October 20th at 2:00PM ET I’m hosting ‘Agency Purchases Accelerating Pipelines,’ a free webinar to provide a substantive overview of these streamlined buys. We’ll host this one monthly just in case you’re reading this report after that date. But for the record, agency spending on Simplified Acquisitions has been increasing an average of $1 billion each fiscal year since FY2009. Can we say that about another type of purchase or Award/IDV Type? Nope! FYI.
When agencies sought to simplify their lives by saving time and money related to the administration associated with making a purchase, they reached out to FAR Part 13 and obligated just over $4 billion to small businesses. All but one billion of this spend was awarded via purchase order or definitive contract which means most of the buys were not orders placed against IDVs. 3,363 small businesses staked a claim here.
Comparing this to the top dog, IDCs, Simplified Acquisitions accounted for 80% of the number of companies impacted by IDCs, with less than one-third of the obligations. That’s pretty dang efficient! When you factor in all of the inherent benefits it’s not hard to see why I believe small businesses should include Simplified Acquisitions in their pipelines or why I’m such an advocate for agencies using this ‘underdog’ procurement method.
Federal Supply Schedules
GSA and VA combined to obligate $1.8 billion to schedule buys, distributing those dollars to 1,216 small businesses along the way. Pretty good except what’s surprising to me is even though the Federal Supply Schedules account for ten to twelve billion more in spending each fiscal year than Simplified Acquisitions (that number has been shrinking rapidly over the last six years), doesn’t have a threshold restriction of $150,000 and has greater visibility to both Government and Industry, in almost every head-to-head comparison made over the years, FSS underperforms.
I wonder how much impact the NASA and DoD class deviations have had on the Schedules program? I wonder how much impact those policies will have when they become government wide rules?
Government Wide Acquisition Contracts
All three agencies with GWAC authority (GSA, NASA and NIH) saw their information technology contract vehicles garner just shy of one billion in small business obligations during quarters one, two and three, with NASA accounting for $600 million, GSA realizing $247 million and HHS/NIH capturing $135 million. Altogether they touched 216 companies, which again surprises me given the level of participation small business has in all of the GWACs, with three of them at GSA setup exclusively for small business concerns.
Blanket Purchase Agreements
BPAs established by twenty-nine departments rang up $844 million in obligations to 419 small businesses. The surprise I received analyzing this part was the fact DoD was not the top player for the first time in pretty much any level of spending. They were edged out by DHS by $800K for the top spot. Like IDCs, BPAs can be single or multiple award so I’ll add that $600 million of the spend was obligated to single award BPAs.
I always encourage small businesses to get themselves PO’d by Uncle Sam because the result is money in the bank! It’s one of the most common procurement instruments across many industries but like Simplified Acquisitions, Purchase Orders just don’t get any respect. I’ve had conversations with folks from Industry who don’t feel the need to bother with these insignificant orders, and folks from Government who differ on whether or not there is a threshold for purchase orders.
I respond to both of them the same way. I know for a fact a company doing business with Treasury out of Idaho received at least three purchase orders where the obligation amount for each was above $9 million during FY2015. So unless you believe nine million is insignificant or there exists a purchase order threshold above nine million, you lost me.
Purchase Order buys not associated with Simplified Acquisition Procedure procurements, tallied $587 million in obligations issued to 508 small businesses. Like Definitive Contracts, these are not IDVs but Awards and will only indicate one contract number in FPDS-NG.
Basic Ordering Agreements
I’m not certain what percentage of those reading this piece will ever compete for or be awarded a BOA as I’ve never been a party to one although I’ve done business with all seven federal agencies issuing those that accounted for $274 million in obligations during the first three quarters of FY15. The majority of these dollars, $214 million to be exact, were obligated via single-award BOAs. In all, 135 small federal contractors were recipients of this BOA spending.
Pulling a ‘Columbo’
Just one more thing before I let you go. If you compare the obligation totals and the number of companies impacted for items 2, 3 and 7, Simplified Acquisitions and the standalone (Non-IDV) contracts, to the same totals for all of the IDV items, guess what comes out on top? The Indefinite Delivery Vehicles take the prize for number of dollars, but Simplified Acquisitions, Definitive Contracts and Purchase Orders put $250,000 or more in the hands of more small companies, using fewer dollars in the process.
This is the part where I usually talk about having to invest less upfront and spend less time chasing one versus the other, my lower C.A.B. fare thing, but you know that already, right?
“The person who says it cannot be done should not interrupt the person doing it.”