June 29 2012 Copyright (c) 2012 Business Research Services Inc. 301-229-5561 All rights reserved.

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  • Federal agency fourth-quarter buying spree underway

    The annual end-of-year rush has begun to spend federal contract dollars before the fiscal year ends on Sept. 30.

    While the trend may be somewhat less pronounced this year, agency contracting offices are hurrying to expend appropriated fiscal 2012 dollars in the final quarter of the fiscal year.

    “The last quarter of the federal fiscal year means ‘Spend it or lose it,’ said Tom Johnson, publisher of Set-Aside Alert. “Contracting offices will be spending it, and there’s a lot of money left to spend.”

    The federal buying surge is an annual event. It was exacerbated last year because Congress in April 2011 finally approved the budget for the fiscal year that had begun on Oct. 1, 2010. There was much less delay for the fiscal 2012 budget, approved in December 2011.

    Even so, the fourth quarter spending pattern is likely to hold this year, specialists predict. Monthly contract spending typically nearly doubles each September, compared to the previous month, according to data compiled by Bloomberg.

    “There clearly will be an uptick,” Stan Soloway, president of the Professional Services Council, said in an interview. “There might not be enough dollars for a ‘spree,” but you will see something.”

    Gloria Larkin, president of TargetGov consulting firm in Columbia, Md., said her research has shown a general pattern of up to 60 percent of federal agency spending occurring in the final quarter of the fiscal year.

    “It is a pattern we have seen before, and we expect to see it again,” Larkin said in an interview.

    Kevin Boshears, OSDBU director for the Homeland Security Department, said at an industry event in mid-May that DHS had spent about $6 billion so far in fiscal 2012, and expected to spend another $8 billion by Sept. 30.

    Federal contractors are being advised to move quickly to identify and respond to opportunities. That means checking for new solicitations, reviewing agency budgets to determine what work is unfinished and asking agency officials about upcoming solicitations.

    Companies also are being advised to make it easier for contracting officers to take action.

    “They have stacks of contracts to move,” Larkin said. “The fastest way is to give them a vehicle they can use immediately.” Those could include micro purchases or sole-source acquisitions, she said.


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