Competition for Government Procurement

A large competition for government procurements helps government agencies and departments reduce expenses and allow more small businesses to win Federal Government prime contracts. For many years, this issue has been of great interest for the Government. For this reason, for many years the U.S. Government Accountability Office has suggested the promotion of competition by contracting officials; improving efforts and focusing on decreasing obligations under high-risk contracts, including those awarded as noncompetitive.

Efforts and approaches are constantly being made for more simplified acquisition methods to stimulate competition for federal contract awards. Greater competition means better value offered by contractors and fewer expenses for the Government.

The Federal Government can exploit competitive contracts to reduce expenses, improve contractor performance, and increase responsibility and accountability for best results. The advantages of competition in acquiring supplies and services from contractors are firmly established.  Generally, agencies are required to use competitive contracts; however, a great number of procurements are awarded on non- competitive contracts each year.  Federal agencies must award contracts that all possible contractors can compete for using full and open competition methodology. Exceptions can be applied in special occasions.

For instance, under urgent circumstances or in cases when only one source provides the required services or products, federal agencies are not required to award competitive contracts. In addition, these types of contracts may not be required for contracts below certain dollar values or some contract awarded under Small Business Administration (SBA) program.

Competition has a significant impact on the federal acquisition system and is essential to achieve the best possible return on annual government investments.

Top 10 Government Contractors of United States for FY 2015 and 2016

The following tables list Top 10 U.S. contractors, the number of actions, dollars obligated, the percentage of total actions and dollars.

Global Vendor Name Number of Actions Dollars Obligated %Total Actions %Total Dollars
LOCKHEED MARTIN CORPORATION 173,114 $43,399,390,153.13 0.8685% 9.1723%
THE BOEING COMPANY 14,223 $26,496,633,956.21 0.0714% 5.6000%
GENERAL DYNAMICS CORPORATION 25,755 $14,501,361,143.91 0.1292% 3.0648%
RAYTHEON COMPANY 11,732 $13,474,488,536.89 0.0589% 2.8478%
NORTHROP GRUMMAN CORPORATION 11,359 $11,908,200,324.79 0.0570% 2.5168%
MCKESSON CORPORATION 110,844 $8,635,682,448.82 0.5561% 1.8251%
UNITED TECHNOLOGIES CORPORATION 22,059 $6,473,518,210.50 0.1107% 1.3682%
BAE SYSTEMS PLC 11,339 $5,146,911,642.83 0.0569% 1.0878%
L-3 COMMUNICATIONS HOLDINGS  INC. 8,055 $5,064,501,310.58 0.0404% 1.0704%
BECHTEL GROUP  INC. 142 $4,928,575,472.79 0.0007% 1.0416%

Table 3. Top 10 U.S. Government Contractors in FY 2016

Global Vendor Name Number of Actions Dollars Obligated %Total Actions %Total Dollars
LOCKHEED MARTIN CORPORATION 121,387 $36,259,911,070.83 0.6866% 8.2999%
THE BOEING COMPANY 13,201 $16,646,781,379.52 0.0747% 3.8104%
GENERAL DYNAMICS CORPORATION 21,945 $13,632,984,913.57 0.1241% 3.1206%
RAYTHEON COMPANY 10,554 $13,114,246,704.69 0.0597% 3.0018%
NORTHROP GRUMMAN CORPORATION 11,628 $10,637,246,770.72 0.0658% 2.4349%
MCKESSON CORPORATION 106,371 $8,358,491,280.54 0.6017% 1.9133%
UNITED TECHNOLOGIES CORPORATION 25,400 $6,792,039,706.41 0.1437% 1.5547%
L-3 COMMUNICATIONS HOLDINGS  INC. 8,493 $5,450,824,009.65 0.0480% 1.2477%
BECHTEL GROUP  INC. 201 $4,645,069,049.63 0.0011% 1.0633%
BAE SYSTEMS PLC 10,541 $4,436,736,025.43 0.0596% 1.0156%

Table 4. Top 10 U.S. Government Contractors in FY 2015

For two fiscal years in a row, 2015-2016, the top awardee is Lockheed Martin. Only in FY 2016, it received $43.39 billion in prime contracts or 9.2% of total contract funds awarded by the U.S. Government.

Take a look and give us your thoughts if you think that these trends will bring any changes in government procurements.

By |2018-10-08T05:18:49+00:00March 26th, 2018|Federal Government Contracting, Government Procurement|Comments Off on Competition for Government Procurement

About the Author:

Ab Vand has more than 25 years of proposal writing and capture management experience on government contracts especially in defense, construction, and IT sectors. Ab has a track record of writing over 100 successful proposals for above $1 million contracts. Ab is currently the VP of Capture and Proposal Development at GDI Consulting, a well-established firm on proposal writing and contract management. Ab has written a number of articles on proposal writing and capture management, and regularly holds training courses for companies and individuals on ways to improve their winning chances.