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Source : Brookings Institute
May 5, 2023
Author : Alex Bustillos
The federal government spends $665 billion on goods and services annually from external vendors, accounting for 10% of its $6.5 trillion budget. A new study by Darrell M. West for the Brookings Institute, titled “Reforming federal procurement and acquisitions policies”, looks in depth at the reforms that are being considered to improve procurement.
Building and construction, office furniture and supplies, industrial products, professional services, information technology, defense equipment, security systems, transportation, logistical assistance, travel, meals, and accommodation are all examples of external procurements. Such expenditures are a significant generator of economic activity in the country and a means of achieving key national and international goals.
As so much money goes to outside sources, the number of contracts and grant-funded workers total 3.3 million, accounting for 35.9% of all national government workers. When active duty military and postal workers are excluded, there are 2.6 times as many external employees as federal employees.
As of 2019, contract employees were 4.1m, federal employees were 2.1m, active duty military personnel was 1.3m, grant employees were 1.2m, and postal service employees were 500,000.
Given the enormity of the external funds and personnel involved, federal money must be used fairly, transparently, and equitably. However, the government procurement process is complex, particularly for businesses without prior experience submitting bids or understanding agency requirements and processes.
There are numerous complaints about the current acquisition policies, including issues related to paperwork, geography distribution, government training, and racial and gender inequality. These problems make contracting companies challenging and create barriers for commercial firms.
The General Services Administration (GSA) has built an integrated site called the System for Award Management (SAM) for firms that want to sell goods or services to government organizations. Registered businesses can seek federal contract opportunities on www.SAM.gov, www.SBA.gov, or individual agency websites. Submissions must also meet the requirements of the Buy America Act and Trade Agreements Act.
Contractor News had previously reported that GSA is utilizing SDVOSBs in government-wide acquisition contracts. But this is just a small step because significant inequalities in U.S. government contract distribution are still prelevant.
As per FY21, most east coast states received federal contract funding, with a few on the west or the South. Virginia received $72 billion in FY21, the highest federal contract funding for the year.
Numerous studies have reported that federal agencies have been left hollow in recent years due to rising retirement rates, outsourcing of jobs, and reliance on outside contractors for essential functions. In 2015 the federal government retirement was 99,710, which raised to 114,505 retirements in 2022.
Concerns have been raised about gender, racial, and/or economically disadvantaged disparities in federal government contracting. It has been seen that minority-owned businesses perform poorly and have less success obtaining federal contracts. Additionally, there are gender disparities. Although women own 20% of small businesses, they only receive 4.85% of federal contracts.
A number of reforms should be taken to bring efficiency, effectiveness, and equity to the government contracting process. The recommendations include
Implementing these recommendations would elevate a number of the issues that individuals are facing with the existing situation.
But not all is lost, as we hear at Contractor News have reported: federal agencies have been awarded a record $154 billion in small business contracts. Also, as we see in recent years, 27.2% of total federal contracting have been awarded to SBEs, exceeding the White House goal of 23% for FY2021. A variety of cities and counties nationwide are undertaking disparity studies to further resolve gender and racial disparities that their contracting and procurement processes face.