Why OTAs might be needed to fight the Fourth Quarter spending spree

The fourth quarter is almost always a feeding frenzy and OTAs might be a popular tool for agencies looking to quickly close out their IT budgets.

The federal government’s year-end fourth quarter spend has become an annual ritual in Washington, D.C., every September, similar to the anticipation of kids returning to school and the start of fall sports.

It’s more than just the numbers that have revealed this new reality for fourth quarter spending. The entire contracting market has felt it. Government contractors anticipate the release of RFPs over a typical “federal summer” with contract awards to follow in the fall.

In 2018, the year-end spend was referred to as a spending spree of “historic proportions” with nearly 40 percent of contracts being awarded in the last quarter of the government’s fiscal year. Even in a normal year, it was anticipated that 2020 would continue the trend and final quarter spending was predicted to increase. Of course, 2020 has been anything but normal. And it appears this year’s final quarter spend will surpass the previous ones, but with good reason.

The Impact of COVID-19

Suffice to say, 2020 has had a few more challenges than previous years for federal executives. The COVID-19 pandemic has upended all facets of life, business and government. With so much uncertainty throughout the year, many agencies were not able to move forward with some initiatives as quickly as they hoped, thus they did not spend as much as anticipated in the spring and summer months.

Combined with the now-annual Q4 spending frenzy, it means that this year’s fourth quarter will be unlike any before when it comes to government spending. In IT spending alone, Bloomberg Government estimates that nearly $28 billion will be spent by agencies in fourth quarter of fiscal 2020.

An example of the spending push comes from the Department of Veterans Affairs (VA). The VA has spent only $1.7 billion on IT contracts so far this fiscal year, compared to its $7.8 billion IT budget request, which leaves a massive $6.1 billion that must be spent in the final quarter. Furthermore, the CARES Act appropriated the VA an additional $2.2 billion to modernize its IT and electronic health records systems.

OTAs May Be the Answer

While GSAs push to best in class (BIC) government wide acquisition contracts, has created preferred paths to the market, and the use of those BICs can often lend themselves to short turnaround times to make awards, OTAs seem to be on the rise as another alternative.

Other transaction authority (OTAs) have soared in recent years, as they allow agencies to enter into contracts quicker than some of the traditional procurement methods. These have been most popular within the Department of Defense, as they aim to seek to enlist capabilities faster. Their spending through OTAs has increased from about $1 billion in fiscal year 2015 to $7.8 billion in 2019, according to Bloomberg Government data.

However, the use of OTAs could quickly expand to other agencies in a response to COVID-19 and the need to utilize funding in a timely manner to keep pace with the increased demands that have risen in helping our Country get past this pandemic.

According to federal market analyst Chris Cornillie, this may also become the new normal for procurement moving forward.

“We expect that HHS will continue to use OTAs as it meets the needs of the COVID response, and we may see HHS normalize OTAs as a larger part of their R&D portfolio in future years,” he said.

With many agency leaders facing a “use-it-or-lose-it” deadline for utilizing their budgets before the end of the fiscal year, the use of OTAs may be a critical and needed weapon for agencies to acquire the resources needed to execute on their fiscal 2020 initiatives.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.