MAC/GWAC SPENDING INCREASES

Multiple Award Contract spending now accounts for nearly 25% of all federal dollars spent on acquisition, according to a new report from Bloomberg Government released last week.  Total spending hit $125 billion in FY’17, an increase of $12 billion, or a 10% jump in a market that did not grow nearly that much overall.  This means that federal agencies are increasingly looking to multiple award contracts, both home-grown and inter-agency, as a preferred acquisition method for both new and follow-on projects.  Both civilian and DOD agencies use these contracts.  Forty-Four percent of total MAC expenditures, or $55 billion, were made by civilian agencies in FY’17.  Almost all civilian agencies use such contracts.  In addition, Bloomberg Government reports that small business participation is at a five year high. The wealth, however, is not spread evenly.  Bloomberg estimates that 4% of incumbent MAC contractors won 80% of the business in 2017.  It is, therefore, both a matter of having a presence on the right contracts and the relationships required to close actual business. This is particularly true as agencies work to trim the number of contracts they buy from as part of the government’s Best In Class initiative.