For more than 15 years until 2008, procurement spending had steadily rising. But the winds have been shifting and 2013 could be a sea change.
Dan Gordon, associate dean for government procurement law at the George Washington University Law School and the former administrator at the Office of Federal Procurement Policy, says there is keen interest among contractors and budget hawks alike in seeing if the downward trend continues this year.
Dan Gordon’s Top 3 for 2013
Will procurement spending drop below $500 billion in Fiscal Year 2013? After rising virtually nonstop from 1992 through 2008, spending on federal contracts peaked at $550 billion and dropped back to somewhere around $515 billion in FY 2012. For contractors and the budget-hawks alike, there will be keen interest in seeing whether the downward path continues. A key indicator to watch: will the overall FY 2013 number go below $500 billion?
Will government-wide “strategic sourcing” succeed, beyond office supplies and overnight delivery services? The Obama Administration succeeded in persuading federal agencies to use the government-wide blanket purchase agreements (BPAs) for office supplies and overnight delivery services in FY 2011 and 2012, thus overcoming resistance on the part of agencies to relying on government-wide strategic sourcing vehicles. The biggest potential savings, though, aren’t in office supplies, but in IT. Will the Administration succeed in creating government-wide strategic sourcing contracts for IT goods and services – and then get agencies to actually use them?
Will federal employees get any good news in 2013? The Obama Administration began as a real boost to federal employees, and not only in terms of respect and appreciation: the Administration increased the number of civil servants running federal contracts, especially at the Department of Defense, but also in many civilian agencies. By 2011, though, the budgetary pressure and the Republican-controlled House meant that federal employees began getting only bad news – from pay freezes to hiring freezes, from cuts in travel budgets to threats of furloughs. The impact on federal employee morale has been palpable. In the procurement arena, the impact of fed-bashing at all levels has played out in employees “playing it safe”, buying low price, for example, even when higher quality might be worth the extra cost. Will 2013 bring a change for the better, or only more bad news?