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Is Fiscal Year-End Spending Old School?

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Decades of federal government contract spending have proven a direct causation to the Sept. 30 fiscal year-end dramatic increase in awarded contracts. Even with a reduced budget and sequestration, the “use it or lose it” mentality is a driving force in government purchasing at that time — whether it’s a $100 credit card purchase or a $10 billion contract.

However, there is a new issue affecting this year-end spending frenzy, and contractors will be well-served to pay attention, if increasing sales is a business goal. This new issue is a dramatic increase in specific contract vehicles used by the government at the fiscal year-end. These vehicles are trending towards multiple-award contracts (MACs), General Services Administration (GSA) schedules and other indefinite delivery vehicles (IDVs).

A recent federal government market analysis by Govini, a federal business intelligence platform, stated that “almost one-fifth of [federal] government spending happens in the last month of the fiscal year, and much of that is aided by agency MACs. Half of federal agencies spend more than one-third of their funds in the last [three months] of the fiscal year. MAC ease of use, combined with budget uncertainty, aids contracting officers … as MAC utilization now account for 18% of annual contract obligations.”

Govini further stated that GSA now accounts for 49% of the MAC market, led by federal supply schedules. GSA GWACs (Governmentwide Acquisition Contracts) account for $5 billion, for small and large businesses, such as the Alliant 2 and Alliant SB contracts that are specified for open competition and set-aside for small businesses, respectively.

How does one position a company to be in the right place at the right time for the flood of fiscal year-end contracts? Using the insight from the mentioned research — holding one or more contract vehicles, while aggressively marketing said vehicles to targeted decision-makers from June through September — will be a wise move in the effort to increase revenues in the federal marketplace.

Gloria Larkin is president of TargetGov, in Linthicum. Visit www.targetgov.com or call 866-579-1346 for more information.