Tag: Government Organizations

GAO and the Top Government Contracting Trends

GAO and the Top Government Contracting Trends
GAO and the Top Government Contracting Trends

How does the Trump administration’s proposed budget line up with recent government contracting trends? According to the latest GAO report, there’s a significant disconnect between the two that bears watching.

What Does Current Government Spending Look Like?

Last March, the U.S. Government Accountability Office (GAO) released “Contracting Data Analysis — Assessment of Government-wide Trends,” commonly referred to as the Report. Contents included details on federal contract trends during the period from 2011 to 2015.

Overall federal contract spending declined nearly 24 percent, with the bulk of the change coming from a decrease in DoD spending. After spending reached its lowest level during sequestration in 2013, civilian spending bounced back while military spending continued to decrease.

Proposed Budget Changes: Increases and Cuts

A week later, the Office of Management and Budget released its “Budget Blueprint.” Among the major provisions of the blueprint was a significant increase in DoD spending with a corresponding significant decrease in civilian spending.

Specifically, the blueprint called for a $54 billion increase in defense spending, including more equipment for the Navy and Air Force. Cuts in civilian spending were proposed to allow for the boost in defense spending without increasing the national debt.

Congress is not entirely on board with the proposed cuts, so the final budget is expected to look different. Contractors who conduct business with the affected agencies are advised to pay close attention to the blueprint as it passes through the approval process.

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Pentagon Changes the Face of Its Workforce Though Contractor Usage

Large warehouse
Government Contracting

Since 2012, the Pentagon has faced congressional pressure to reduce DoD spending on civilians and contractors. While the DoD hit benchmarks the first few years of the mission, it has begun increasing its spending on contractors. The DoD projects an increase of $1.2 billion spent on contractors from fiscal year 2014 through 2016.

A showdown or new changes may be looming, as the civilian federal employee union AFGE fights proposed moves to re-classify civilians such as commissary employees and reduce their pay. A consulting group has recommended such changes to the DoD.

For DoD contractors, the increased spending means solid and steady work for now. The AFGE and some DoD spending watchdogs would argue that civilian employees should be performing more of the jobs carried out by DoD contractors and military personnel, however.

If the DoD agrees to change course and cut contractor spending, the next step would likely be contract reviews to determine the necessity and efficiency of the service provided by each contractor. Larger contracts would yield greater scrutiny.

The Pentagon has generally indicated a focus on overall DoD spending, rather than specific concerns for whether various roles are carried out by military, civilians, or contractors. For DoD contractors, this means that cost-effective bids are the surest path to retaining and securing work.

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