The fourth quarter of the federal government’s fiscal year notoriously draws the greatest volume of federal contract spending as agencies rush to obligate funds before they expire on Sept. 30.
Despite the rhetoric around budget cuts and the looming threat of sequestration, the fourth quarter this year ended up looking a lot like previous years. By Deltek’s tally, federal agencies awarded more than $138 billion in contracts in the three-month period, a jump from $90 billion in the third quarter.
There were 20 awards of more than $1 billion, including four valued at more than $5 billion:
The Department of Health and Human Services awarded a contract worth up to $25 billion to five companies as an insurance policy in case of a pandemic flu bug.
The Navy awarded 385 additional contracts under its expansive SeaPort-e task order-based contract vehicle. Individual contracts themselves have no guaranteed value, but collectively the vehicle draws several billions of dollars per year in spending.
Alliant Techsystems was awarded an $8.5 billion contract for the operation of the Lake City Army Ammunition Plant, which produces small-caliber weapons.
The Defense Intelligence Agency awarded a $5.6 billion contract to more than 10 vendors under the Solutions for Intelligence Analysis, or SITA II, program, which provides intelligence analytical support to the defense intelligence community. The awards drew seven protests, but all were either denied or withdrawn.
One of the final acts of Congress before the election was to secure agency funding for the first six months, providing some certainty to a market that has had little for several years. The funding level represents a slight decrease from the previous year and stays within the constraints set by the Budget Control Act of 2011.
Deltek is tracking more than 1,600 contracts valued at over $141 billion projected to be awarded in the first quarter of fiscal 2013. Notable large-scale contracts include the Centers for Medicare and Medicaid Services’ $15 billion multiple-award, task order-based contract for IT services, and the Department of Homeland Security’s Enterprise Acquisition Gateway for Leading Edge Solutions — known as the EAGLE II contract, which has a ceiling of $22 billion and is meant to provide IT services across the department.
Despite funding in place for the first half of the year, the specter of sequestration remains. Agencies have been instructed by the Office of Management and Budget to approach the new fiscal year assuming that sequestration will not occur.
The ongoing lame-duck session of Congress has begun negotiations on a host of issues related to the federal deficit, including a range of tax policies set to expire at the end of the calendar year.
Companies and federal employees have just a month to wait to find out how it gets resolved — or not.
Kevin Plexico is vice president of federal information solutions at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.