Appropriations | The Contracting Education Academy

September 5, 2019 By cs

Lawmakers expect a stopgap spending measure to avoid an October shutdown

Despite the two-year budget deal, agencies are likely to receive a continuation of current spending levels well into the fall, Congressional aides say.

Agencies probably won’t receive new appropriations by the start of the 2020 fiscal year. With current funding set to lapse on Oct. 1, lawmakers appear resigned to pass a continuing resolution to give themselves more time to iron out the details of line-by-line appropriations bills.

The two-year budget deal hammered out primarily between House Democrats and the White House in late July set top-line spending levels, but Congress still must approve a package of 12 funding measures—or pass a CR—to avoid another government shutdown before current appropriations expire.

The House has passed most of the required annual spending bills for fiscal 2020, but lawmakers still must reconcile them with the Senate, which has yet to approve any appropriations bills for the upcoming fiscal year. The upper chamber delayed work on the spending bills until top-line funding levels were established and the deal was signed by Trump. The Senate Appropriations Committee is set to begin considering the legislation upon returning from recess next month.

Keep reading this article at: https://www.govexec.com/management/2019/08/lawmakers-expect-stopgap-spending-measure-avoid-october-shutdown/159473/

February 7, 2019 By AMK

DoD procurement overhaul report recommendations draw both praise, critique from industry groups

The most important recommendation to come out of the third Section 809 Panel report on defense procurement reform is one that doesn’t directly relate to procurement, according to a leading industry group.

Corbin Evans, director of regulatory policy for the National Defense Industrial Association, told WashingtonExec the most crucial recommendation is for Congress to enact timely regular appropriations bills instead of continuing resolutions. Otherwise, defense acquisition will continue to suffer, regardless of what other reforms are made.

“This has been an NDIA priority for years,” he said. “It’s important to ensure that these bills are done on time and that money can be distributed in a predictable manner.”

Evans also singled out the panel’s recommendation to enable enhanced use of advanced payments at the time of contract awards to small businesses, which comprise about 75 percent of NDIA’s 1,700 members.

Keep reading this article at: https://washingtonexec.com/2019/01/section-809-report-dod-acquisition-reform/

January 25, 2019 By AMK

No, the Pentagon did not waste $28 billion

Last week, headlines blared with claims that the Defense Department had failed to spend $28 billion in time, forfeiting all that money back to the US Treasury.

The story said the Pentagon had “let $28 billion go to waste,” with “tens of billions of dollars unspent” as “time ran out.”

This would be an awesome and scandalous story, were it true. Fortunately, it’s not. Just about all of this $28 billion in taxpayer funds will be spent. What this story really highlights is the arcane complexity of the budget execution process at the world’s largest organization. The Pentagon receives a lot of criticism on many different topics, but this is one instance in which piling on is unwarranted.

Keep reading this article at: https://breakingdefense.com/2019/01/no-the-pentagon-did-not-waste-28-billion/

September 6, 2018 By AMK

How has federal contract spending changed over time?

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data. The results are thought-provoking.

Take a look at what they discovered when they examined the USAspending.gov database:

Over the past decade, federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act. As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013. By 2015, contract spending had fallen 27 percent from its 2010 peak, before rebounding slightly in the following years.
Seasonal trends in contract spending occur within each year. Spending tends also rise and fall on a monthly cadence, with roughly one small peak and one small drop per month. During the last month of the federal fiscal year — September — contract spending spikes, especially one week prior to the end of the government’s fiscal year.
End-of-year spikes consistently occurred across the decade, and generally followed the broad rise and fall of spending. On average, September spikes accounted for between 6-8 percent of the annual spending in a fiscal year.
USAspending.gov data captures two types of activity related to contracts: 1) the issuance of new contracts, and 2) modifications to existing contracts. Splitting spending on contracts into these two categories, DataLab found that spending on new contracts tended to spike in September. Modifications, however, displayed less variance and did not spike as drastically at the end of each fiscal year. This suggests that new contracts — not modifications—drove the spikes at the end of each fiscal year.
USAspending data also captures what the government received from a contract (i.e., goods or services.) This categorization scheme, utilizing Product and Service Codes, contains almost 6,000 different categories, ranging from Dining Facility Maintenance to Buoys. For this analysis, DataLab collapsed these 6,000 categories into seven high-level groups. Notably, contracts classified as Facilities, Equipment, and Construction, displayed about 3.5 times the level of variance over the decade as total contract spending, and over 50 times the variance of spending on Weapons and Ammunition. Unlike the other categories, contracts for weapons ammunition did not spike at the end of the fiscal year.

DataLab also looked at USAspending data to determine the relationship between the passage of continuing resolutions, new appropriations, and the amount of spending on contracts across the government. Here’s what they found:

Continuing resolutions caused contract spending to spike in the same week, which was not observed for the passage of new appropriations. These findings cohere with qualitative research conducted by the Government Accountability Office (GAO), which noted in February 2018 that “some agency officials reported delaying contracts and application times for grants while under a [continuing resolution].” If agencies are unable to issue new contracts because adequate funds are not available under continuing resolutions, needs accumulate, and then are satisfied once funding is available.
Notably, DataLab found that the passage of new appropriations resulted in a statistically significant decreases in total contracts and especially on professional services contract spending. This suggests that new appropriations allow the government to engage in longer-term budgeting, potentially facilitating forward-looking spending decisions.
DataLab also noted that research and development spending was less variable and less impacted by continuing resolutions, suggesting that this type of service is likely to follow a distinct pattern for contract issuance from the typical cycles followed by other goods and services. As one of the smallest categories of spending, it is possible that this type of contract is partially sheltered from the timing of congressional appropriations.
Other categories showed evidence of very large spikes in spending in response to congressional appropriations, such as transportation and logistic services. Further research as to why specific types of spending are more reactive to continuing resolutions would need to be done to explain why.

To see this report, including trends displayed in graphs and tables, visit: https://datalab.usaspending.gov/contracts-over-time.html

February 28, 2018 By AMK

Agencies will have to race the clock to spend massive influx of money

After years of absorbing cuts or flat spending levels, most federal agencies will soon face a novel dilemma: spending a massive influx of money with only a few months to get it out the door.

A recent agreement struck by congressional leadership and signed into law by President Trump boosted non-defense discretionary spending for agencies by $63 billion in fiscal 2018. The measure also included a continuing resolution through March 23 to buy lawmakers time to write line-by-line appropriations, meaning a forthcoming omnibus bill will give agencies only about six months to spend the new funding before it expires Oct. 1. Such a tight timeline could prove problematic for agencies and put pressure on many areas of their operations, according to former federal budgeters.

“This will tax grant making, contract professionals, hiring professionals,” said Robert Shea, a former associate director for administration and government performance at the Office of Management and Budget in the George W. Bush administration. “This is going to tax every facet of the agencies just to make sure they’re spending wisely.”

Keep reading this article at: http://www.govexec.com/management/2018/02/agencies-will-race-clock-to-spend-massive-influx-of-money/146112

Despite the two-year budget deal, agencies are likely to receive a continuation of current spending levels well into the fall, Congressional aides say.

The most important recommendation to come out of the third Section 809 Panel report on defense procurement reform is one that doesn’t directly relate to procurement, according to a leading industry group.

Last week, headlines blared with claims that the Defense Department had failed to spend $28 billion in time, forfeiting all that money back to the US Treasury.

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data. The results are thought-provoking.

After years of absorbing cuts or flat spending levels, most federal agencies will soon face a novel dilemma: spending a massive influx of money with only a few months to get it out the door.

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