According to a fascinating new analysis from USASpending.gov, the fourth quarter spike in contract awards is quite real, and quite significant: the value of average weekly contract spending in the final week of the fiscal year is more than double that of the next-highest weekly average.
The USASpending analysis looked at ten years’ worth of government contract spending data. Unsurprisingly, total contract spending was at its highest in the recovery from the Great Recession, when legislation pushed spending in FY 2010 to a record-high $560 billion. In FY 2017, the total spent was $510 billion.
Regardless of overall spending levels, the analysts “observed seasonal trends in contract spending occurring within a single year.” They found that “spending tended to rise and fall on a monthly cadence, with roughly one small peak and one small drop per month.”
But September was an exception to the trend of small peaks and drops. Each year over the decade, there was a massive spike in spending in September. The spike was most pronounced in the last week of September, where the government averaged $18 billion in contract spending.
For comparison, the week with the next-highest average, in the spring, was $7.8 billion. The lowest-spending week fell over the winter holidays, where the government averaged a mere $340 million in awards. In other words, the Government awarded about 53 times more in contracts during the last week of September then it did over the winter holidays.
Contractors have long known that the Government can be like many of us–it tends to wait until the last minute to do things. When it comes to contract awards, that means lots of action in the fourth quarter, especially in the last week of the fourth quarter. The fact that the Government spends a lot in the last week of September doesn’t come as much of a surprise, but the numbers are still rather striking.
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