For government procurement officials, right about now is when the rubber meets the road.
The fiscal year follows a predictable — but not easy — pattern for procurement officials. Early in the year, they face significant uncertainty about how much money Congress will appropriate for them and when.
And then over the course of the year, program managers may hold back on sending in requirements and contracting officials at times hold back on purchases. Politicians may argue over funding.
By the fourth quarter, there’s pent-up demand and a rush to spend. One-third of government spending typically happens in the fourth quarter.
In fiscal 2011, the peak was less dramatic. At the start of the fourth quarter, the federal procurement system had spent approximately 70 percent of its contracting dollars.
This year, however, could be a much different story.
It’s difficult to measure precisely — the government is not particularly transparent about how much money remains in the federal treasury — but Deltek’s analysis shows that nearly half of contract dollars remain unspent. The spending still to come could potentially total $260 billion.
Government contractors should be prepared to take advantage of this rush. The rapid pace of fourth-quarter procurement typically means quick turnaround times; this year’s unusually heavy pent-up demand may mean companies that don’t prepare will watch fast opportunities pass them by.
Companies should be aware that even the fourth quarter follows a pattern — a burst of buying for the first two weeks, followed by a slower but still accelerated pace, then a final flurry of activity before the last two weeks of the quarter.
During those last two weeks, spending slows as most procurement officials are reluctant to start any new acquisition paperwork because they haven’t finished the stack in front of them.
Even so, anecdotal tales of last-minute orders near midnight on Sept. 30 — the final day of the fiscal year — are not a myth. They happen every year.
And in fiscal 2012, with nearly half of contract spending left to go, they could be even more common.
Ray Bjorklund is vice president and chief knowledge officer at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.