After five years of drawdown, two questions have loomed large: “When will defense contracting hit bottom?” and “Are future capabilities being preserved despite the current drawdown?”
Since 2008, the Department of Defense’s (DoD) contracting portfolio has faced significant resource pressures, as a result of the ongoing budget drawdown, sequestration, and its aftermath. With FY2015 contract data now available through the Federal Procurement Data System (FPDS), CSIS has begun to examine whether the trends observed in the first two years of the post-sequestration defense contracting environment would continue to hold. For the Army, at least, the data shows a notable slowing of the decline in contract obligations in 2015.
Despite the recent series of “Better Buying Power” acquisition reform initiatives by the Department of Defense as part of the continuing effort to increase competition for defense contracts, there has been a significant decline in effective competition for services within the Air Force since 2011. Given the difficulty DoD has had in raising overall effective competition rates, Air Force services contracting provides a potential opportunity to meaningfully increase competition.
A CSIS analysis of trends in Defense Department contracting shows that sequestration affected budget accounts nearly uniformly between 2012 and 2014, but other dynamics led to very different outcomes for contract spending within those budget accounts.
Despite significant anecdotal evidence that sequestration has had profound effects on Defense Department contracting, to date, there has been virtually no hard data. This lack of information on the impact of sequestration can now be remedied with the availability of FY2013 DoD contracting data through the publicly available Federal Procurement Data System (FPDS).