Are you ready for the rise in first quarter spending?
By
Nick Wakeman
Government spending in the first quarter is growing as the fourth quarter spend is dropping. Are you ready for that shift?
It is no surprise that agencies spend a significant portion of their budget during the fourth quarter.
A new report by the data analytics company Govini brings that point home well, but they also found that fiscal first quarter spending is rising.
In fiscal 2015, the government obligated 21.8 percent of its annual funds during the first quarter, a 2.3 percentage point increase over fiscal 2014. At the same time, fourth quarter spending has retracted somewhat since fiscal 2013, when 33.9 percent of spending was in the last quarter. In fiscal 2015, it had fallen to a projected 31 percent in fiscal 2016. Forty percent of agencies reported lower fourth quarter spending.
Of course, if Congress and the White House ever get their act together and enact a budget anywhere close to Oct. 1, the first quarter will become even more important.
The Defense Department, particularly the Air Force and the defense agencies, is the big spender in the first quarter, Govini found.
The Air Force is spending money on aircraft components and services while the defense agencies are focused on mission-critical services and products. The Defense Health Agency is spending on health care services, while DISA is buying network hardware and DLA is replenishing military inventories.
On the civilian side, the big first quarter spenders include Veterans Affairs, Energy, Treasury and Justice. VA is focused on surgical instruments while Treasury is buying software development. Energy is spending on R&D.
The Govini report takes a deep dive into these areas, but beyond the spending details, I find the focus on the first quarter to be refreshing. As they say at the beginning of the report, most of your results are all by certain as the quarter comes to a close.
Another interesting factoid in the Govini report is that 79,600 contracts and task orders worth $87.4 billion are set to expire in the first quarter of fiscal 2017. They also found that first quarter spending tends to preferred contractors that support core mission requirements.
What that tells me is that there is no time to catch your breath from the fourth quarter to the first. It is merely a transition from a spirit to a marathon. The better trained and conditioned you are, the more successful you’ll be.