Pace picks up for year-end contract awards
I’ve already written a couple times about the rush of contract awards we see at the end of the fiscal year, and 2014 was no different.
But in looking at the last five fiscal years, a pattern has emerged: The pace has picked up.
Starting with the end of fiscal 2012, the last three days of the fiscal year have seen defense awards total about 250 or more. [I’m using Defense Department awards because they have an easy-to-use archive of awards.]
The pace has definitely picked up in the last three years.
In 2010, the total number of awards for the last three days of the fiscal year was 205. In 2011, the total was 201.
But in 2012, the total hit 249, followed by a whopping 290 in 2013.
This year, the total reached 260.
And if you have any doubt that the end of fiscal year contract awards are much higher than average, consider this. On Sept. 30, DOD made 95 awards, and on Oct. 1, the total was 23.
I think 2013 stands out because the government shutdown was imminent, and procurement officials were anxious to get awards out before they were locked out. On Oct. 1, 2013, the shutdown began. The Defense Department didn’t make another contract award until Oct. 17.
The annual brinkmanship didn’t come into play as fiscal 2014 came to a close because Congress passed a continuing resolution, but I think the psychological toll of uncertainty and budgetary games has mounted.
The end of fiscal year pressure has always been great, but it has grown, and government buyers feel the need to buy because they just don’t know what will happen to their budgets.
The current continuing resolution puts off any decisions on budgets until December and the lame-duck session of Congress. It is doubtful that we'll see a shutdown at Christmas, but the game of chicken could well return.
Who will blink first?
Unfortunately for contractors, there is little that you can do about this, other than double down on the basics – talk to your customers and build the pipeline. Be prepared for delays and then a headlong rush to award.
It’s contracting in the modern era.
Posted by Nick Wakeman on Oct 01, 2014 at 9:23 AM