Column: How are we doing in FY2018?

      Frankly, I am concerned about federal contract spending this fiscal year, and in particular, about federal contracting with small businesses.

      The data show a 6% decrease in small business opportunities posted to FedBizOpps.gov from Oct. 1, 2017 to June 30, 2018, in comparison to the same period the year before.

      We have kept records of the number of small business opportunities of various types posted on FedBizOpps.gov for the last three years.

      So far this fiscal year, there have been 22,921 such opportunities, which is a 6.3% reduction in comparison to the number of opportunities from the same period in fiscal 2017 (24,463 opportunities). That is a substantial year-over-year decrease.

      The current total of opportunities at this point in the fiscal year is not much higher than it was two years ago, in fiscal 2016. We counted 20,031 opportunities for the first three quarters of fiscal 2016.

The busy season?

      As of June, we have moved into what is typically the “busy season” of the federal fiscal year.

      But, examining postings of FedBizOpps small business opportunities for just the month of June alone, showed a reduction of 10% in comparison to June 2017.

      My concern is whether this drop in posted opportunities is the “canary in the coal mine.”

      Is the decline of FedBizOpps notices foretelling a less-than-anticipated fourth-quarter spending spree?

      Fourth quarter contract awards generally amount to about 40% of the year’s spending. No doubt fourth quarter will be big this year too. But there’s a serious question in my mind about whether Uncle Sam can spend all the money appropriated for fiscal 2018 in the short three months that remain.

Where’s the increase in spending?

      When Congress passed funding bills for fiscal 2018, we were led to expect a substantial increase in new spending--$80 billion in additional funds for defense and $63 billion in additional money for civilian agencies.

      Contracts take time to be awarded. Usually an opportunity must be posted for a reasonable period. When proposals are received they take time to evaluate. There may be a discussion period and then a call for “best and final.” Offers are then evaluated and an award is made. This may require anywhere from one to three months.

      Since the fiscal year ends on Sept. 30th, Requests For Proposals should be appearing now in FedBizOpps, but we are not yet seeing the expected increase in the procurement stream.

What’s going on here?

      I am skeptical that the fourth-quarter spending spree will be as large as expected. There simply may not be enough time to spend the huge amount of funding that has been appropriated.

      One reason for this is that numerous unfilled executive and managerial slots may be making it difficult for agencies to focus, plan and execute acquisitions in a timely fashion. Agencies may be awaiting more guidance on objectives and priorities.

      Another possibility--and I realize this is contrarian--is that the Administration may be actively trying to reduce the government’s civilian spending, and may see a means to do so despite a substantial piggybank provided by Congress. Just because Congress appropriated monies usually doesn’t require that agencies spend it. At the end of the fiscal year, most unobligated and unspent funds expire. There may be strategic meaning to the absence of an uptick in solicitations at this point in time.

      Having said all that, there surely will be a fourth-quarter surge this year, as there is every year. My prediction is that it will not meet the forecasted bounty.

What strategy will serve small business?

      We know that the number of filled procurement slots is down substantially over the last few years. It is also acknowledged that a number of recent hires into those openings are relatively new to procurement and that training has not continued at prior levels. Consequently, a portion of today’s contract specialists lack the experience and knowledge to successfully manage large procurements. The result appears to be increased use of multiple award term contracts and IDIQ situations.

      Government-wide acquisition contracts (GWACs), including GSA schedule contracts, are ways for time-constrained contracting personnel to make awards with companies already vetted for the job. In the construction field, the US Army Corps of Engineers uses multiple-award task order contracts (MATOCs) in the same fashion. It makes sense: make awards for three or five years and parcel out tasks as needed.

      With this in mind, small businesses need to look intensively at (a) using GSA schedules, GWACs (SEWP, STARS II, VETS, Alliant, CIO-SP) and agency-wide contracts (FirstSource, NETCENTS), (b) pursuing MATOC contracts, and (c) teaming with other businesses, including large businesses.

      Being a prime enables you to manage and control contracts after they are awarded, but also involves the risk of spending significant time and effort getting an award and then failing to win tasks.

      Joining as a subcontractor, or engaging in a joint venture, means you share the cost and effort of winning the initial award and subsequent task orders. This may enable you to bring your special knowledge and expertise to the table, supported by other subs and the prime for skills or expertise you may not have.

Conclusion

      Seba Smith once wrote that “there are more ways than one to skin a cat.” This conclusion applies today, as much as it did in the Gold Rush days of the 1850s. Think outside the box this year to win in the federal market.

Tom Johnson is the publisher of Set-Aside Alert. Reach him at tjohnson@setasidealert.com.

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Column: How are we doing in FY2018?

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