The Year-End Spending Rush Is On, But It's Not What It Used to Be

The federal equivalent of Black Friday isn't what it used to be. Conventional wisdom has it that agencies rush to spend their budgets in the final quarter of the fiscal year, but a new analysis of federal contracting data shows that Q4 spending is declining after years of elevated levels, with more agencies obligating a larger share of funds in the first quarter of the fiscal year.

The analyst report by Arlington, Va.-based big data and analytics firm Govini, “Positioning for 2017: Competitive Outlook in Defense and Civilian Agencies,” attributes the shift in part to greater budget certainty. Govini has a data sharing partnership with Government Executive Media Group.

According to the report: “Nearly 40 percent of all cabinet-level agencies had a decrease in Q4 share of FY15 spending compared to FY14, and many are on-track to do so again in FY16. Both Defense and civilian agencies are contributing to the softening of the year-end spending spike.”

The Justice Department had the largest drop in Q4 spending, declining by 8 percentage points from 2014.  

With the 2017 fiscal year set to begin Oct. 1 and lawmakers scrambling to cobble together a continuing resolution to keep the government operating through the election, the analysis sheds light on how agencies will likely prioritize spending over the next several months.  

“The agencies that rush to spend at the end of the fiscal year are distinct from those that start the year strong,” the report notes. Among Defense agencies, the Army and Navy are the biggest fourth quarter spenders, while the Air Force and other Defense agencies do most of their purchasing in the first quarter. Army Q4 spending centered on information technology, communications equipment and technical services, while Navy Q4 spending centered on aircraft and supporting technical services.

Among civilian agencies, the Health and Human Services and State departments are the big fourth quarter spenders, while the Veterans Affairs, Energy, Treasury and Justice departments lead in Q1 spending. “Pharmaceuticals, medical equipment and health IT are popular Q4 purchases for HHS and VA,” the report said.

“Q1 is when agencies obligate funds for core mission needs, including healthcare for [the Defense Health Agency], aircraft maintenance for Air Force, research labs for DOE, and prisons for DOJ. This contrasts with Q4, when a surge of spending occurs for IT and professional services as agencies scramble to expend their remaining funds,” the report said.

Despite the trend away from end-of-year spending, agencies still obligated an average of 31.1 percent of funds in the final three months of fiscal 2015, analysts noted.

Govini’s data shows that 79,600 contracts or task orders worth $87.4 billion are set to expire during the first quarter of fiscal 2017.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.