Program delays frustrate federal contractors

February 3, 2013

When it comes to awarding contracts, the federal government is rarely accused of moving too quickly.

The complex regulations that govern how agencies must buy goods and services challenge even the savviest and most experienced federal contract officers. Still, it tends to have a steady rhythm.

But recent unpredictability has made it tough for contractors to anticipate how quickly a given program will move. The pace has been disrupted by the budget uncertainties plaguing federal agencies.

Deltek researched more than 6,000 federal procurements awarded in fiscal 2012 and found that the average multimillion-dollar purchase took over five months to award. Larger procurements took even longer; for contract awards valued at more than $1 billion, the average elapsed time from solicitation release date to award was 377 days. The larger the procurement, the longer the cycle, and the more likely it will suffer unexpected delays.

Within the procurements examined, there are some programs that have been particularly delayed:

It took the National Science Foundation more than three years to award a $1.8 billion contract for operations and maintenance support for its facilities in Antarctica. The contract was awarded in December 2011, more than two years after the original anticipated award date of October 2009.

The Department of Homeland Security is just now making awards on its $22 billion EAGLE 2 procurement for IT services — nearly 15 months after the solicitation’s release. The DHS originally planned to make awards by the end of October 2012.

The General Services Administration took more than two years to award a $2.6 billion contract for satellite communications.

Uncertainty isn’t the only problem slowing federal agencies. Budget cuts combined with the increase in high-stakes, multibillion-dollar contract awards have increased the frequency of vendor protests.

Agencies are trying to protect themselves by being more diligent with their processes, but protests continue to occur, causing delays and even program restarts, if the Government Accountability Office decides in favor of the protesting vendor.

The timing uncertainty faced by contractors is making it harder for companies to provide investors with sound financial projections and make effective investment decisions. Companies are also struggling to pin down their future employment needs.

Kevin Plexico is vice president at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.

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