The Government's Use-it or Lose-it Spending Spree

American Transparency (website: OpenTheBooks.com) is a public charity who's Government oversight reports present hard data so citizens can "follow the money". Its stated goal is to enhance public discourse with delineated facts.

The group recently published an oversight report entitled: The Federal Government's Use-It-Or-Lose-It Spending Spree - How the Federal Government Spent $97 Billion in One Month. True to its goal, American Transparency doesn't try to blame anyone or any organization in particular for wasteful spending but just points out the facts related to (fiscal)  year end spending. But the listing of items purchased does give one pause to wonder why the Government needs fidget spinners, alcoholic beverages, crab and lobster, and expensive furniture ($50 thousand chair).

American Transparency believes that the use-it-or-lose-it mentality has been a problem forever. Agencies feel that they need to spend their budgeted funds in order to secure at least the same amount the following year. That's not necessarily true. It could be that Agencies are holding back funds during the year to cover unforeseen contingencies and as the year progresses and those contingencies do not materialize, are comfortable spending the funds on other needs. Or, perhaps there is just more pressure on contracting officers to get contracts awarded by year-end. Some in the Government feel that contractors intentionally drag their feet in negotiations knowing that if they wait until year-end they will be able to negotiate a more favorable price because of pressure on contracting officers to finalize contracts by year-end.

The report contains two appendices that list the top 100 spending categories and the top 100 contractors receiving year-end spending spree funds. You can download and read the full report here

.

Federal Procurement Spending

Ever wonder where the Federal procurement dollar goes? Here are some stats we came across recently.

In fiscal year 2011, procurement spending totaled $535 billion (down by about one percent from fiscal year 2010). Of that amount, DoD accounted for 70 percent or $375 billion.

The top 100 Government contractors received 54 percent of total procurement dollars ($284 billion) with ten percent of the contract actions. The remaining 46 percent of procurement dollars were spread among the other 90 percent of contract actions (or, contract awards).

The top five Government contractors (Lockheed, Boeing, Northrup Grumman, General Dynamics, and Raytheon) received 19 percent of the total ($102 billion).

Thirty-four companies received awards of $2 billion or more. Seventy-one companies received awards of $1 billion or more.

Over half of the procurement dollars awarded by DoD were based on competition.

While the public seems to be focused on procurement spending, grant spending was higher than procurement spending in fiscal year 2011. Grant spending totaled $545 billion compared to $535 billion for procurement. About 50 percent of these grant dollars were sponsored by DHHS (Department of Health and Human Services) for medical assistance programs. DoD sponsored only eight percent of the total grant spending. Eighty-eight percent of total grant dollars went to state and local governments, 7 percent went to universities and 3 percent to nonprofits.