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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

 

Filed Under: Government Contracting News Tagged With: acquisition planning, appropriations, continuing resolution, contract award, DataLab, GAO, R&D, Recovery Act, research and development, spending, Treasury Dept., USASpending

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

Filed Under: Government Contracting News Tagged With: appropriations, grants, OMB, spending, spending bill

September 6, 2017 By AMK

President backs deal to avert a shutdown … for now

President Trump on Wednesday backed a Democratic plan to avert a government shutdown and default, surprising many on Capitol Hill.

On Sept. 6, 2017, Trump told reporters on Air Force One that he supported a Democratic plan to keep government open through a continuing resolution that would expire Dec. 15. He said he also supports a plan to attach a three-month increase in the debt limit to Hurricane Harvey relief. The comments came after the president met with congressional leaders Wednesday morning.

“We essentially came to a deal, and I think the deal will be very good,” Trump said. “We had a very, very cordial and professional meeting. So we have an extension, which will go out on December 15. That will include the debt ceiling, that will include the CRs, and it will include Harvey.”

Keep reading this article at: http://www.govexec.com/management/2017/09/congress-gets-closer-debt-ceiling-spending-deals/140779

Filed Under: Government Contracting News Tagged With: appropriations, budget, continuing resolution, federal contracting, government shutdown, shutdown, spending, spending bill

May 26, 2017 By AMK

Tight budgets bring a silver lining

For years, the question of when the government might return to “regular order” – that is, a “normal” process in which appropriations are essentially completed by the end of September — has been a prominent one.

Agency leaders, industry, and others, have continually and appropriately harped on the deleterious impacts of the funding yo-yo that has dominated the scene for far too long.

And if there was one thing many hoped for as a result of having one party in control of both the White House and Congress, it was a return to regular order.

Well, it’s probably not going to happen. As virtually all recent reports have indicated, the budget debate within the parties, let alone between the parties, remains fierce and the chances of getting a full year fiscal 2018 funding bill by Sept. 30th are slim indeed.

President Trump’s budget blueprint – the “skinny budget” — generated plenty of debate; the release of his full proposed budget will only turn up the heat further.  No  budget resolutions have yet been proposed, let alone passed, and no spending instructions given to the appropriations committees.

Keep reading this article at: https://washingtontechnology.com/articles/2017/05/22/insights-soloway-budget-silverlining.aspx

Filed Under: Government Contracting News Tagged With: appropriations, budget, budget cuts, sequestration, spending reduction

December 20, 2013 By AMK

Breaking News: Senate sends defense bill to President, expected to be signed

The Senate approved a sweeping defense policy bill late Thursday (Dec. 19, 2013).

The House, which has recessed for the holidays, has already approved the mammoth measure. And President Barack Obama is expected to sign it.

Overall, the bill would authorize about $527 billion in base defense spending for the current fiscal year, plus funds for the war in Afghanistan and nuclear weapons programs overseen by the Energy Department. The numbers are in line with the Pentagon’s request but more than $30 billion above the levels set under the bipartisan budget agreement passed in Congress this week.

Appropriations committees are expected to work through the holidays on spending bills for passage before the Jan. 15, 2014 expiration of the current continuing spending resolution that funds the federal government. If Congress is able to act in time, it would finally give the Defense Department and the rest of the government a budget.

The elevated spending levels in the new defense authorization bill allowed the Armed Services committees to avoid tough strategic choices about what to cut and what to keep under the spending caps put in place by the Budget Control Act of 2011. But it also means the bill is out of sync with the fiscal realities facing the Defense Department.

The 84-15 vote followed a drawn-out partisan spat that at times appeared to threaten the annual National Defense Authorization Act (NDAA). Senate Republicans, particularly, fumed about the compromise legislation’s movement through Congress on a fast track, with no opportunity for amendments.

For more details on this story, visit: http://www.politico.com/story/2013/12/senate-national-defense-authorization-act-barack-obama-101364.html

Download a summary of the FY14 National Defense Authorization Act at: National Defense Authorization Act for FY14 – DRAFT BILL – 113hr1960rh 06.2013

Filed Under: Government Contracting News Tagged With: appropriations, Budget Control Act, DoD, funding level, industrial base, NDAA

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