Sole-Source Business Can Be Big Business in Q4 for Government Contractors

Written on August 8, 2019

Almost $44 B was obligated in the fourth quarter of Fiscal Year 2018 via non-competed or sole source contract actions, according to Bloomberg Government’s “Race to the Finish” webinar on July 17th. That amount is likely to be replicated during the current 2019 fourth quarter as well, as federal agencies look for fast ways to obligate dollars against the September 30th deadline. While it is still very true that Indefinite Delivery/Indefinite Quantity contracts, like GSA Schedules, do a significant amount of business at the end of the year, the sole source number is noteworthy. While Bloomberg didn’t specifically break down where that money went, it is likely that most of it went to incumbent contractors working on projects where an extension was looming and to small businesses so that the obligating agency could make its set-aside goals. Far less likely is that new market entries received a significant share of the funds. Though that is quite possible with a large dollar amount in play, relationships do matter in federal business, as well as risk-avoidance. Incumbent contractors should take note. If you have a project coming to the end of its current cycle, getting money obligated via a sole source justification could ease your entry into the new fiscal year. The same logic applies if you’re a company with particularly good relationships with some customers. As always, contractors should be prepared to help their customers provide support for the most comfortable acquisition approach. Helping your client is a plus at any time of year.

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