The US Government is by far the largest customer available to almost any U.S. based business and industry. It is made up of different Agencies with thousands of Departments each with their own independent buyers with their own BUYING POWER. That is a lot of potential customers. [hint hint]
In fact, each buyer can authorize contract awards up to the simplified acquisition threshold which was increased from $150,000 to $250,000 by Class Deviation 2018-O0013 in April 2018.
We don’t want to bore you too much with stats *yawn*, but…
According to the Congressional Budget Office (CBO), in Fiscal Year (FY) 2018 [Oct 1, 2017, to Sept 30, 2018], the government spent about $4.1 Trillion, Yes with a “T’. Of that, $2.5 trillion was “mandatory” spending, another $1.3 Trillion was “discretionary spending” with $0.3 interest rounding out the spend on net interest. Unfortunately, the U.S. Government only brought in $3.3 Trillion in Revenues which resulted in a deficit of $0.8 trillion. So what do those terms mean?
- Revenues – Funds the government collects from the US public through its sovereign powers.
- Mandatory spending – funds Congress has committed to pay out within existing laws and regulatory requirements. Typically entitlements, welfare, and other support programs.
- Discretionary spending – funds allocated to support the government and all their agencies/departments for that year.
- Net Interest – interest of debt owed by the US.
Note: Discretionary spending is where most of government contract funding comes from.
On a high-level the below chart show the areas of spend.
So now that we know how much and what agencies Let’s break down the contract awards [Discretionary Spending] in 2018 by Agency.
No surprise! The Department of Defense (DOD) has the largest budget and spend within the U.S. Federal umbrella by 10 x the next lowest, however keep in mind they are NOT the only agency that depends on vendors to help facilitate and operate the government – they ALL do!
Now that we know how much was spent on contracts —– it now time to break it down by NAICS Industry category/classification.
There are almost 1200 different industry classifications so clearly too large for this article. We broke it down for you and provide it, like many of our resources, available for download at not cost! Discover how much money the government spent on your industry!
Leave a Reply