SENATORS WARN AGAINST YEAR-END BUYING FRENZY – BUT ARE COMPLICIT IN DRIVING IT

Chief Financial Officers at the Departments of Defense, Homeland Security, Treasury and other large agencies received letters recently from members of the Senate Homeland Security and Governmental Affairs Committee warning against “potentially wasteful” year-end spending as FY’18 draws to a close.   Whether or not that letter may chill September buying activity remains to be seen.  If the Senate, however, doesn’t want to have so much spending loaded at the end of the year perhaps they can  work with their House colleagues to pass appropriations bills earlier than half-way into the fiscal year.  Congress has played a large role in setting the stage for such actions because it can’t get its part of the job done on time.  Now, however, everyone has to live with spending a full year’s worth of appropriations in six months.  Contractors would be wise to help their customers show why spending on specific procurements isn’t wasteful, merely because it happens late in the year.  We’ve always maintained that calling on CFO representatives is a sound business practice and this is one example why.  If you haven’t developed a relationship with agency CFO’s, funds for expected projects could be withheld, in this instance just to show Congressional overseers that they got the memo.   Congress may be poised to actually pass significant appropriations for FY’19 on time.  Till then, make sure you can help your customer justify FY’18 spending.