you're reading...
Chief Visionary's Blog, FEATURED ARTICLES, Industry Contributor, Op-Ed/Blog

How Small Business Got $500,000 (or More!) in FY2016


Over the years I’ve done a number of comparisons assessing the economic impact of federal contracting dollars on small business concerns by looking at the procurement methods and the types of contracts used by federal civilian, defense and intelligence agencies. This is one of those.

My approach is to observe how many small companies received obligations at a certain dollar level during a specific fiscal year and analyze the information based on solicitation procedures, award type and more. For example, I compare dollars getting to small business via indefinite delivery vehicles (IDVs) versus standalone contracts and when established contract vehicles are used, I measure the result of single award versus multiple award contracts. As always, I give a nod to FAR Part 13 buys to continue spotlighting this still great opportunity for American Small Businesses to get a foot in the door or better, push the door open even wider.

If you work for or lead a company pursuing federal sector opportunities and your role requires understanding various factors that will impact your ability to conduct effective Marketing, Business Development, Capture and Proposal Management, you’ll find this useful. Sound good? Okay, here we go!

Guy Timberlake, The Chief Visionary


For some reading this, $500,000 would be a game-changer and for others it’s more of a nice-to-have, part of the collection that ultimately gets them where they want to be. Either way, a win is a win and this piece examines how that happened for small federal contractors during the Government’s 2016 fiscal year, and if you read between the lines, how much of it will happen in FY2017. When I previously penned comparisons of Simplified Acquisition spending to dollars obligated against the Federal Supply Schedule at the $500K and $250K levels, I discovered that small businesses should really consider ‘vehicle selection’ based on their customer set, offerings and more because the ‘hype’ espoused by many different elements is not always reality. Specifically, not all dollars spent by agencies are attached to contract vehicles, and not all dollars attached to contract vehicles are subject to ‘Multiple Award Fair Opportunity’ since single award contracts are still very prevalent and relevant.

In this piece the threshold is small business concerns awarded $500K or more in obligations in FY16. To make the list, a small business needs to have accrued the obligations in one or more transactions via one of the award types or solicitation procedures. It’s important to note I’m looking at gross vs. net obligations in this analysis. This means I’m not considering deobligations by agencies as part of my query.

Getting Started

The number of small business concerns capturing $500,000 or more in FY16 obligations is:


These companies sank their teeth into a bucket of federal agency (gross) obligations valued at:


which is a per company average of:


That ain’t too shabby! Here comes the detail.

Instruments of Award

When agencies issued obligations to agreements, contracts and orders, here’s what it looks like. This might not mean much to some (or many) but it paints a pretty clear picture of how these dollars moved. For example, over one-third of the obligations were made to standalone contracts, that is, purchases made where there is no reference to an established contract vehicle. To be specific, the dollars associated to ‘Definitive Contracts’ and ‘Purchase Orders’ are the one’s to which I’m referring.


For the instruments above that are indefinite delivery vehicles (BOA, BPA, GWAC and IDC), the obligation amounts corresponding to these IDV’s reflects single award IDV’s for the BOA, BPA and IDC. For GWAC dollars (and some of the IDC dollars) the obligation amounts represents the guaranteed minimums for companies on those contracts. Notice anything missing from the list of IDV’s? How about the Federal Supply Schedule (aka the GSA and VA Schedules)? Since these are exclusively multiple-award vehicles with no minimums paid to vendors, there are not obligations to the IDV Type ‘FSS.’ To get a look at how these impact the dollars above we need to add in one additional attribute to the query.


Here’s what this tells you. the Federal Supply Schedule accounts for nearly $8B in obligations made to small business concerns when each company received $500K or more in FY2016 obligations via this contract type. You’ll note that Indefinite Delivery Contracts (IDCs, better known as IDIQs which is actually 1 of 3 types of IDCs) represents nearly 50% of these obligations. Half of the IDV obligations resulted from single award buys versus multiple award buys. Knowing this and assuming at least some of those buys are for what you sell, how would that impact your teaming B2G hi rgbstrategy?

If a better understanding of federal agency ‘Awards and IDVs’ is something that would assist you in seeing the opportunity landscape more clearly, check out our e-course ‘What You Don’t Know (About Codes and Contracts) Can Hurt You!‘ available in our B2G Essentials™ online classroom.

One (is the Loneliest Number)…

But it’s also getting the bulk of federal fiscal dollars when it comes to small business. Of the obligations going to small business concerns (based on the criteria of the query) 60% went to a contract or contract vehicle where ‘Multiple Award Fair Opportunity‘ was not a factor. The ‘S’ represents obligations to single award IDVs and the blank represents awards made to single award contract vehicles (on initial award or as a modification to the initial award versus as a separate task or delivery order) and standalone contracts which are inherently single award.


Small Business Impact (by the Numbers)

Here’s where we take a look at how many small businesses were on the receiving end of these obligations based on the Award/IDV Type and some of the Solicitations Procedures. Why? It speaks to the level of effort required by Government and Industry and the overall size of the types of opportunities. Additionally, it also indicates how the communities supported in part or largely by the success of small businesses benefit as well. This is always a concern for Commerce agencies at the state level and the regional and county-based economic development organizations.

Small Business Impact by Award Type – Standalone Contracts
  • Purchase Orders – When agencies used this simple but effective instrument, 2,746 small business concerns saw activity in the amount of $5.8B (when each accrued at least $500K this way). Half of these companies (based on obligations reported against specific DUNS numbers) received $1M or more. The ‘King of the Hill’ in this pack captured over $680M.
  • Definitive Contracts – This is a term used in FPDS-NG to describe contracts that must be reported to FPDS-NG that are other than an indefinite delivery vehicle (IDV). While the vast majority of these type contracts are to other than small business concerns, 6,004 small businesses received definitive contract actions in FY16 valued at $27B.
Small Business Impact by Award Type – Indefinite Delivery Vehicles (IDV)
  • Basic Ordering Agreements – BOAs don’t see a lot of action in the small business community or in federal contracting over all when compared to all of the other types. In FY16 BOAs were responsible for 257 small business concerns seeing $879M in fiscal obligations greater than $500K. 148 of them captured greater than $1M this way.
  • Blanket Purchase Agreements – These flexible agreements (versus contracts – that doesn’t happen until an order is placed) have seen increases in use in the last few years. 1,095 small businesses saw obligations of nearly $5B when agencies placed ‘calls’ against BPAs.  Additionally, another $18M went to 11 small businesses as orders placed with the initial award of a BPA. There are
    different ‘flavors’ of BPAs used by agencies depending on their needs. These include but are not limited to:

    • FSS/BPA – These are agency-specific BPAs established from the terms and conditions of a company’s GSA Schedule (FAR Subpart 8.4).
    • SAP/BPA – These are agency-specific BPAs established primarily for small business concerns based on the Simplified Acquisition Procedures at FAR Part 13. These are competitive, non-competitive and even ‘open solicitation’ type opportunities that contributed to $21B in Simplified Acquisitions spending in FY16.
  • Federal Supply Schedules – Not every agency making buys against the GSA or VA Federal Supply Schedule is obligated to report to FPDS 35692053_mlso there is always discrepancy between reported sales against the Schedules and what actually appears in the transaction database. So we use the data available to us. In this case, for FY16 orders placed against Federal Supply Schedules accounted for $7.8B in obligations to 2,198 small business concerns, which is $2B more dollars obligated to 548 fewer small businesses than when agencies leveraged purchase orders vice the FSS. When you add in the hard and soft cost of acquiring a FSS and the constant threat of having it revoked, purchase orders look pretty good.
  • Government Wide Acquisition Contracts – I see lots of articles, blogs and search phrases referring to several contract vehicles as GWACs that in fact are not GWACs. To set the record straight, OASIS and HCaTS are not GWACs. They are, Government Wide, Multiple Award, IDIQ contract vehicles. GWACs, which can only be issued (currently) by GSA, NASA and NIH NITAAC are IDVs specifically supporting information technology-related acquisitions under authority of OMB and the Clinger-Cohen Act.. Don’t let this lull you into believing agencies can only buy goods and services on GWACs and conversely, don’t believe agencies cannot purchase IT goods and services under OASIS or HCaTS. When it comes to GWACs for FY16, 458 small businesses captured $6B in GWAC obligations. That’s a whopping $13.2M average per company. 406 of those companies saw $1M or better and the top 27 companies captured $50M or more, averaging $98.5M each. Deep versus wide impact, to say the least.
  • Indefinite Delivery Contracts – Most folks don’t know this term. What they do know is one of the 3 versions of an IDC known as an Indefinite Delivery (ID) Indefinite Quantity (IQ) contract. After Definitive Contracts, IDCs account for the most obligations each fiscal year. In fact, IDCs account for more dollars ($184B in FY16) than all of the other IDV Types combined (BOA, BPA, FSS and GWAC obligation totals are $52B). Having set the stage appropriately, you won’t be surprised when I tell you 5,885 small businesses captured $44.7B when IDCs where leveraged. That’s an average of $7.6M per company. For the record, 36 of those companies received $100M or more (much more in the case of the top company who boasts over $1B in FY16 obligations).
Small Business Impact by Solicitation Procedures

Solicitation Procedures are the methods agencies use to publish solicitations and very much dictate if you can see or respond to specific requirements. For example, when you see ‘Subject to Multiple Award Fair Opportunity’ listed, it indicates only the companies part of the pool of companies awarded a certain vehicle will have an opportunity to respond to those solicitations. Here’s a look at the economic impact on small businesses during FY16, based on a few of the methods agencies leveraged when soliciting offers and quotes.

  • Negotiated Proposal/Quote – Buys under FAR Part 15 accounted for $33B or more than 1/3 of the dollars in our query, and touched 5,474 small business concerns with 3,919 of them realizing $1M or more of this type of obligation. For the record, 54% of these dollars ($18.6B) were issued to IDVs and all but $1B of that to IDCs. Of the $16.7B obligated to indefinite delivery contracts, all but $825M were single award buys. Rushing out to win or team on a multiple-award vehicle? Check to see what your customers are doing first by validating it for yourself (versus asking them).
  • Sealed Bid – No negotiations here! 746 small businesses made the cut when sealed bidding was the solicitation method which accounts for $3.4B of the spend on this report. 84 of those companies crested the $10M mark via sealed bidding and single award IDCs were the contract type that resulted from these actions.
  • Subject to Multiple Award Fair Opportunity – When you need to secure a hunting license before you can pursue agency requirements, this is the solicitation elmer-fudd_558520procedure likely to prevail since the real battles (and the real money!) don’t happen until task orders start flying. This query reports 4,895 small businesses  capturing $500K or more via multiple award vehicles during FY16 for a tally of $39.5B. That averages out to just over $8M per company. 905 can boast $10M or more this way. The keys to success on vehicles like these is managed, deliberate visibility (Marketing), account penetration and relationship management (Business Development) and effective processes for task order management (Capture and Proposal Management). Without a plan and resources in place to execute, you are more likely to be part of the ’80’ rather than the ’20’ in the govcon version of the Pareto Principle. You know, where 20% of the vendors on a multiple award contract (usually less) capture 80% of the business (usually more)? Just in case you’re wondering, when this procedure was in effect, obligation totals by IDV were (be sure to compare the BOA and IDC totals with the ‘Impact by Award Type’ section):
    • Indefinite Delivery Contracts – $22.3B
    • Federal Supply Schedule – $7.6B
    • Government Wide Acquisition Contract – $6B
    • Blanket Purchase Agreement – $3.4B
    • Basic Ordering Agreement – $7.2M
  • Simplified Acquisition – Whether your company is just starting out to get a foot in the door or trying to expand your footprint, buys made using the Simplified Acquisition Procedures continue to be a great but still very much misunderstood opportunity for small business. Before providing you the impact on small business, here’s the Simplified Acquisition impact on federal contracting. While overall reported obligations dropped by $100B during the period of FY2009 to FY2015, buys made this way grew an average of $1B per fiscal year and they haven’t stopped! You can learn more about Simplified buys here.

    (Click to enlarge)

    But here’s what you’re waiting for, during FY16 when small businesses captured at least $500K in Simplified Acquisition obligations, 3,725 of them split a pot of federal contract dollars totaling $8.5B. That’s an average of $2.3M per company which may not sound like much compared to other methods described here, until you consider the investments:

    • 72% of these obligations were made to standalone contracts. This means $6.1B of these dollars did not reference an established contract vehicle, reducing the ‘buy-in’ for companies.
    • Of the $2.4B purchased from indefinite delivery vehicles, all but $556M  was via single award vehicles. Again, reducing the cost of doing business by not leveraging a ‘hunting license.”
    • Did we mention the time from identified need to award? The average period of time as reported by multiple agencies is 30-60 days. What’s not to like?!?

In addition to those tangible ‘cost of acquiring business’ factors (we call it C.A.B. Fare!) Simplified Acquisitions touched 75% of the number of companies on the multiple award vehicles (3.725 vs 4,895) with 5 times fewer dollars ($8.5B versus $39.5B) and a lower cost of entry and overall C.A.B. Fare. I’m not saying forsake hunting license opportunities (that would be silly), but expand your awareness of how agencies do business based on what you sell and to whom you sell it.

Obviously, this information is the proverbial ‘tip of the iceberg’ when it comes to truly vetting opportunity and the angle of approach you use to achieve desired results. One takeaway is that the chatter on the street is not always what actually occurs. The ability to validate what you hear is not difficult nor time consuming if you apply fundamental processes to finding and winning federal contracts and subcontracts. I hope your 2017 has started off as wonderfully in life and business as mine has!


Guy Timberlake, The Chief Visionary (bio)
http://www.theasbc.org | @theasbcguy | @govconguy

“The person who says it cannot be done should not interrupt the person doing it.”

asbc rgb

A snapshot of federal agency solicitation procedures and contract types when small business concerns captured $500,000 or more during fiscal year 2016.
How many small businesses captured $500,00 or more in federal contract dollars during fiscal year 2016?
What is an IDV?
What is an IDC?
What is an indefinite delivery contract?

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.'


No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: