HAVING THE RIGHT CONTRACT VEHICLE MATTERS MORE THAN EVER

Forty-Two Percent of the dollars spent on service acquisition in FY’18 went through Tier 1, Tier 2, or Best in Class (BIC) contracts last year as federal agencies increasingly followed Category Management guidelines set forth by the Office of Management and Budget.  At the same time, open market service procurements dropped by 10%.  Plus, small businesses received 33% of all orders, beating small use goals by 10%.  While these numbers are specific to services, the trend toward consolidating buys among identified BIC contracts is expected to be similar for IT and other major solutions brought via Indefinite Delivery Indefinite Quantity contracts.  The bottom line for contractors is:  Get on one of these BIC vehicles, or partner with someone who is, if you want to maximize your federal business potential.  Similarly, the contracts you have today that aren’t BIC may become worth less and less as agencies drive spending to BIC vehicles where spend under management can more easily be identified.  Federal agencies appear to be serious about driving business to contracts with competitive pricing where spend analysis tools exist to assist them in their budgeting and acquisition functions.  Still more guidance is expected soon from OMB on Category Management and, with it, the trend line toward increased use of preferred contracts is expected to grow further.