Federal Agencies expected to spend almost $200B on acquisition in Q4 2020; Are you ready?

By Pamela Racer (PTAC at Western Carolina University)

Hold on tight!! The federal fourth quarter is here; the money is flowing and it’s going to be a busy 10 weeks for many contracting officers and vendors. There are more than 98,000 active procurements on beta.sam.gov and an unknown number of thousands of task orders under the schedules program at the General Services Administration, the assorted GWACs and other multiple award contracts across the government.

Federal Agencies are expected to spend $194 billion between mid-July and September 30th, according to Bloomberg Government. The biggest slices of the pie will come from Professional services with about $32 billion to spend and from the Technology arena with about $28 billion to spend.

This is not a new trend. In 2019, $182 billion was obligated in the fourth quarter. This represents an increase of more than $30 billion since 2016 according to Bloomberg Government (BGov) in a recent webinar. “Spending in the last month of the fiscal year is usually more than that of July and august combined.”

Of that $194 billion expected to go out the door in Q4 2020, BGov estimates that agencies will spend $101 billion in September, the most in one month since 2018 when they spent $99 billion.

Given how much money has to get out the door, it appears that most agencies may give preference to schedules, governmentwide acquisition contracts, set-asides and sole-source contracts in the fourth quarter.

For instance, NASA said agency customers’ fourth quarter spending accounted for 54% of all of its revenue under the SEWP (Solutions for Enterprise-Wide Procurement) GWAC (Government-wide Acquisition Contract) in 2019. September alone accounted for 33% of the spending. As for 2020, currently SEWP is 35% ahead of 2019 sales. It is estimated it could reach $8 billion to $9 billion in total obligations in 2020.

At National Institutes of Health’s Technology Acquisition Assessment Center (NITAAC), the agency is expecting fourth quarter spending to account for around 57% of their total revenue for 2020.

While the fourth quarter portends to be extra busy, so does the first quarter of fiscal 2021. Several agencies are planning major contracts over the next six months.

The IRS is ready to move forward with its Pilot IRS program. The tax agency issued a notice that it plans to release a solicitation for one of its three initial pilots, and is considering releasing two others. The IRS said both of these programs may include a solicitation in 2021.

At the Department of Homeland Security, industry had the opportunity to review FirstSource III draft solicitation. DHS detailed its plan that includes five separate set-aside tracks: 8(a); Historically Underutilized Business Zone (HUBZone); Service-Disabled Veteran-Owned Small Business (SDVOSB); Women-Owned Small Business (WOSB); and All small businesses, including all small businesses and socioeconomic designated small business concerns. DHS plans to host a virtual industry day on July 31. DHS expects to issue the final solicitation in October with awards scheduled for early 2021. The current FirstSource contract sunsets in December 2022 and easily reached its $3 billion ceiling.

Another major contract to watch is from the Defense Intelligence Agency called Solutions for the Information Technology Enterprise III (SITE III). This 10-year multiple award contract that has a ceiling of $12 billion is a follow-on to the E-SITE vehicles that sunset in December.

For more information on this story and additional references from the Federal News Network follow this link.

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