Federal Contracting – Time to Pull the Strings

The widespread increase of multiple award contracts (MACs) have made the Office of Federal Procurement Policy thinking so as to cut the contract spending and move more work in-house. These administrative efforts are the result of several agencies, including the Department of Veterans Affairs, the Department of Justice and the Department of Homeland Security planning to acquire new MACs in 2011.
The ‘Federal Budget Analysis – 2011’ report by FedSources reveals a 5% drop in contract dollars which means that the contractors face a drop of $36 million in Federal spending. Ray Bjorklund, Senior VP and Chief Knowledge Officer at FedSources and the author of the report said “There is a substantial drop in addressable spending here.”
He further said “There are significant cuts in professional services and real property. This means there will be far more aggressive competition for far fewer dollars.”
According to the report the overall message that the 2011 budget conveys is that there is a change – particularly in contract services. “The budget proposes $36 billion in cuts affecting contractors, with about 100 individual programs cut or consolidated and scores of programs reduced in scope.”
The report further states that while the professional services and real property saw the biggest cuts in contract spending in the Government Fiscal Year (GFY) 2011 budget, the “most significant increase in contractor-addressable spending is in blue collar operations and maintenance.”