For the better part of the past decade, procurement shops throughout the federal government couldn’t seem to stop themselves from creating new contract vehicles.
There’s something alluring about seeding and cultivating a multiple-award contract (MAC), with dozens of companies clamoring to participate and the promise of hundreds of millions of dollars blooming under a vehicle of your creation. Since 2005, thousands of multiple-award indefinite-delivery, indefinite-quantity (IDIQ) programs have sprung up, many with multi-billion-dollar ordering ceilings.
The contract vehicle garden is now overgrown. Supply clearly exceeds demand.
Just look at IT services. The 10 largest contract vehicles have $17 billion in annualized ordering capacity. But those vehicles hosted under $12 billion in actual orders last year, leaving 37 percent excess capacity. Examples of underutilized contracts abound. The Interior Department’s cloud computing IDIQ has a $1 billion annualized ceiling. It attracted just $27 million in spending in fiscal 2015, according to federal procurement data.
The excessive excess capacity won’t last.