2013: The RFP rally that didn't happen

The first half of fiscal 2013 started with delays and uncertainty that slowed the release of new solicitations. The hoped for comeback for RFPs in the second half of the year never materialized. Bob Lohfeld explains why.

What happened to all of those request for proposals that we were promised for the final quarter of fiscal 2013?

The pundits told us that procurements delayed earlier in the year would come rushing to market in July, August, and September, and the final quarter would make up for the slow spending that we had seen earlier in the year.

It simply didn’t turn out that way. The rush of procurements never came, and August closed with the fewest number of large-value RFPs released since we started keeping statistics.

While the government stepped up contract awards in the final quarter -- 36 percent of all contract dollars were awarded in the fourth quarter -- these were mostly awards for procurements that were released earlier in the year and had been in evaluation or were for awards of task orders on IDIQ contracts.

The RFP rally that wasn'tHover chart to show exact totals

Legend
2011 2012 2013
Fiscal 2013 was a slow year for RFPs compared to 2011 and 2012 and ended with a dip rather that a rally.

Looking at the data

The chart shows the number of RFPs released per month in each of the last three fiscal years with an expected award value greater than $50 million. These large-value RFPs include procurements in information technology, aerospace and defense, professional services, and technical services and exclude procurements in architecture, engineering, and construction.

RFPs released in the final quarter of fiscal 2013 were down 17 percent compared to the average number of RFPs released in the final quarter of the two prior years. The final quarter of fiscal 2013 produced only 89 large-value RFPs in comparison to 112 in 2011 and 103 in 2012.

August showed a 50 percent decline in the number of RFPs released compared to the two prior years and was the worst month in the past three years, producing only 21 large-value RFPs. In comparison to prior Augusts, 2011 had 40 similar RFPs and 2012 had 41.

RFPs down 31 percent for the year

The total number of large-value RFPs released in fiscal 2013 was down 31 percent from the average number of similar RFPs released in the two prior years. With sequestration, a deadlocked congress, government furloughs, and a general uncertainty about the government budget, large-value RFPs dropped to 352 in 2013.

In comparison, the government released 520 large-value RFPs in fiscal 2011. This number declined 4 percent in fiscal 2012, dropping to 497 RFPs. The average number of large-value RFPs released in fiscal 2011 and 2012 was 508 per year.

Where did all the RFPs go?

It’s hard to know for certain what happened to all the expected RFPs, but we have some good insight.

Some contracts simply got extended. Rather than release competitive solicitations during the busy contract award season, the government just kicked the procurements down the road and extended the incumbent contractor. If you were the incumbent this was good news, but if you were the challenger you saw your RFP slip to the right by as much as a year.

Some work went to multiple award task order contracts, but not all task order contracts saw an upswing in task order competitions. Whether you saw an uptick or not depended on which contracts you held. Finally, some work may have found its way onto GSA schedule contracts since sales under these vehicles have been doing well.

All in all, some procurements slipped their RFP dates, some found other ways to get to market, and some were just cancelled.

What’s ahead?

We are probably about midway through a long-term cyclical decrease in federal spending. The bottom will likely occur in fiscal 2014 or perhaps fiscal 2015, although this is pretty much a guess on my part since there’s really no way of knowing at this time what will come out of the Congress.

During this downturn, we know for certain that fewer RFPs will be released. Fewer RFPs means fewer contract awards, and fewer awards translate into shrinking revenue across the market.

Competition will be stiffer, and successful companies will improve their competitiveness and adjust to continued challenging times.

 

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