The United States government has awarded more than $280 billion in contracts so far this fiscal year — FY2015 ends September 30.  Last year, that number was just over $445 billion on September 30.  (Data available online at https://www.usaspending.gov).  While this year’s total contracts awarded will be less than last year, the disparity reveals that the rest of August and September is likely to set a blistering pace of federal contract awards.

In late July, the Government Accountability Office (GAO) — tasked with investigating how the federal government spends taxpayer dollars — released what many are calling a scathing report.  The report explains that many federal agencies fail to follow the procurement regulations found in the Federal Acquisition Regulations (FAR).  The report is a good reminder for contractors who bid on federal procurements to be watchful of procurements that appear to deviate from the rules.  Data suggest not only that these agencies are breaking the rules, but also that protestors who call them on it are increasingly getting some relief.

 

Congress typically funds federal agencies through annual appropriations.  An elementary principle of federal fiscal law is that if an agency’s appropriations are not obligated by the end of the fiscal year in which the appropriation was made, those funds expire and generally become unavailable to the agency.  Often, agencies spend their appropriated funds late in the year in an effort to save some “dry powder” early on in case an unforeseen need arises.

With Congress always looking for ways to cut spending, agencies do not want to end a fiscal year with unobligated funds.  In Washington it is hard for an agency to justify to lawmakers the need for more money if the money Congress appropriated last year — money the members of Congress had to explain to their constituents was needed then — was not used.  Accordingly, at the end of each fiscal year agencies resolve this dilemma by finding ways to close the gap between the portion of their appropriation obligated and the portion faced with becoming expired on September 30.  Too often that solution is a less than ideal procurement.

With only a little over $280 billion in federal contract awards to date, federal agencies look posed to make another year-end dash to spend our cash.

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