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Chief Visionary's Blog, Civilian, Defense, FEATURED ARTICLES, Industry Contributor, Intelligence, Op-Ed/Blog, Simplified Acquisitions

Simplified Acquisitions vs. The World: Small Business Impact Revisited

HCB Guy on Mic2Since FY2009, civilian, defense and intelligence agencies have increased spending under the Simplified Acquisition Procedures by nearly one billion dollars per fiscal year, on average. No other procurement type has experienced consistent growth like this especially when you consider the overall fiscal spend has dropped by $100 billion during the same period. Here’s a look at the positive impact these streamlined buys have when compared to the most used contract vehicle type in federal contracting.

– The Chief Visionary

Just like legendary comedian, Rodney Dangerfield, Simplified Acquisitions don’t get any respect. Not from vendors, agencies or even Congress. Well that’s not entirely true no respect dangerfieldsince tens of thousands of vendors benefited from the efforts of 61 federal agencies at the department-level who issued contracts for buys made this way in FY2015 (and 79 department-level organizations who funded these buys). In fiscal year 2015, Uncle Sam set a record by obligating more than $20 billion to the purchase of goods and services using the streamlined purchasing rules found at FAR Part 13. By the way, did you catch my math related to the number of agencies?

These organizations made buys across the proverbial spectrum of offerings referencing more then 1100 NAICS Codes and nearly 2400 PSC Codes in the process of setting this record. This means unless you have a tremendously obscure offering, there’s no excuses for not at least checking out this opportunity to determine if there is an opportunity. Time is money, and it won’t take much time or money to understand these opportunities, or as much time or money to pursue and capture them compared to other buys.

But this article is about impact, positive economic impact on small business concerns and the communities they call home to be precise. Here’s the backdrop.

Government agencies make purchases in a number of ways and each brings with it a specific level of ease or complexity for either or both sides. The unique attributes of Simplified Acquisitions are based on why these procedures were written and adopted. In short, they are established so that everybody wins (where ‘everybody’ is the buyers and the sellers) when it comes to reduced levels of effort for Government and Industry. With a reduced level of effort for Industry still fresh in your mind, consider the following:

Buys Using Most Used Established Contract Vehicle Type

During FY2015 when agencies made obligations to small business concerns using an Indefinite Delivery Contract (IDC), the parent to Indefinite Quantity (IDIQ), Definite Quantity (IDDQ) and Requirements (IDR) contracts, 6,737 small businesses captured $41 billion via single-award and multiple-award contracts. This pot includes $13B in modification dollars and includes all forms of competition. This is a nice collective win for small businesses and nothing to be sneezed at since every company counted captured at least $250,000.

Now if we consider the level of effort required to capture the initial hunting license for those dollars that went to multiple-award vehicles (for the record, more dollars went to single-award vehicles) and then the subsequent dogfights at the task order level, the reward is still sweet, but at a substantial cost of doing business.

Buys Using Simplified Acquisition Procedures

A similar review of FY2015 obligations made when Simplified Acquisition Procedures were used shows 6,353 small businesses captured $9 billion in goods and services buys. The trick here is the rules used to make these purchases were less arduous, the solicitation type was expedited (Combined 19844222_mSynopsis/Solicitation in many cases) and often in the form of a Request For Quote (RFQ) versus a Request For Proposals (RFP) which can mean less time in responding.

Several agencies cite 30-60 days as the average processing time for these buys from the time a need is identified until a purchase is issued and 70 percent of the $20 billion was obligated via a Purchase Order or Definitive Contract, standalone contracts as opposed to delivery or task orders against an established contract vehicle. Only about $1.5 billion were modification dollars and on average, seventy-percent of Simplified buys are competitively awarded.

How Simplified Obligations  Were Divvied Up by Small Business

For the $9 billion in Simplified dollars that went to small business based on a $250K minimum take, here’s a breakdown of how companies did:

  • 105 companies realized >$10M (#1 took home $372M);

  • 145 companies realized >$5M and <$10M;

  • 1,680 companies realized >$1M and <$5M;

  • 1,706 companies realized >$500K and $<$1M;

  • 2,717 companies realized >$250K and <$500K.

For some, the dollars and ranges represented total government business for the year, and for others it represented a supplement to their overall winnings. What’s interesting is the variance in the number of companies is less than four hundred. Also remember, every company represented in this review netted at least 32323643_l slice of american dollar pieone-quarter million in obligations during FY2015 via one of the methods described. I’ll take mine in non-sequential unmarked bills, please!

Which range would make your year and which one would supplement your other winnings to help FY2016 end on a high(er) note?

P.S. FPDS-NG reported $8 billion in similar obligations via the Federal Supply Schedules (FSS) to 3,046 small business concerns during FY2015. With just one billion in additional spending to small business, Simplified Acquisitions more than doubled that economic impact and remember, the GSA Schedule does not have the same spending thresholds as SAP buys.

Peace!

Guy Timberlake, The Chief Visionary (bio)
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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