Government agencies cut over $24 billion in contract spending in 2012. That is a 4.5% decline from the $537 billion spent on contracting in 2011, a decline that one senior administrative official called “historic.”
“This decline represents a dramatic reversal of the unsustainable 12 percent contract spending growth rate experienced from 2000 through 2008,” said Joseph Jordan, the federal procurement policy administrator at the Office of Management and Budget.
Jordan attributes the decline in spending to smarter, more strategic sourcing in which multiple agencies combine their procurements to achieve greater discounts. In fact, Jordan claims that such strategic sourcing of office supplies and shipping services has saved the U.S. government over $200 million over the past two fiscal years. Meanwhile, the Department of Homeland Security alone saved $386 million in 2012 by pooling its purchases across all components. That’s a lot of savings.
“This progress is remarkable, and we are pleased that we have not only stemmed but reversed the unsustainable growth in contracting under the previous administration,” said Jordan.
But what does this mean for the small businesses that relied so heavily on these dwindling government contracts? Well, for starters, it means that the federal procurement arena will be more competitive than ever. Do you think you need some assistance breaking into the Federal acquisitions arena? Well, DHA can help! DHA has extensive experience with the Federal acquisitions arena. Our employees are fluent in the language of government contracts, and provide expert guidance to our clients on a “cradle-to-grave” basis.
If you have any questions regarding Government Contracting, please contact DHA by visiting DHA-Inc.com today! You can also follow DHA on Facebook, Twitter, LinkedIn, and Google+.
Source: Federal Contracting dips 4.5% in 2012