Contract Consolidation: All You Need to Know, but Were Afraid to Ask

by Chris Wiedemann, Senior Analyst

Something that we’ve all heard about over the last few years, and particularly in the last year or so, is a trend toward contract consolidation. Consolidation efforts aren’t targeted at IT only, but are being put into practice across the entire government. Acquisition personnel and business owners are pointing to duplicative contracts and inadequate procurement methods as a major driver of unnecessary government spending and inefficiency. The solution, we’ve been told, is consolidation of common requirements into larger contract vehicles, like multi-agency contracts (MACs) or government-wide acquisition contracts (GWACs); this would enable the government to buy smarter
and focus more on achieving mission needs. There are some data points that seem to indicate consolidation is in the works – more and more bids are being received for each MAC task order, for example, and we’re also seeing much more competition for small business set-asides.

However, although transition towards contract consolidation is really happening, the reality is we’re not seeing as much movement as the rhetoric would suggest. For example, MAC obligations accounted for 21% of all federal spending in 2013, which is the last year we have full data for – and while that does represent an increase, it’s only up from 17% in 2006. In other words, the shift towards consolidation is slow. We’re also not seeing increased use of more comprehensive contract vehicles, like schedules (around 20%) and GWACs (around 7%). In other words, contract consolidation is happening – but slowly, and certainly not in proportion to the amount of discussion and grandstanding around it. This means it’s more critical than ever to go to market armed with specific knowledge about your customer’s preferred contract vehicles, their acquisition strategies, and how you can work in their environment.

To learn more about how best to navigate the complicated landscape of federal contracting, be sure to attend immixGroup’s upcoming panel on Revving the Engine of Contract Vehicles at tomorrow’s Government IT Sales Summit.