How did spending on federal contracts change over the past 10 years?
Over the past decade, we observed that federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act. As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013. By 2015, contract spending had fallen 27 percent from its 2010 peak, before rebounding slightly in the following years.
How did spending on federal contracts vary throughout the year?
We also observed seasonal trends in contract spending occurring within a single year. We looked at weekly spending on federal contracts, and found that spending tended to rise and fall on a monthly cadence, with roughly one small peak and one small drop per month.
In addition, contract spending spiked in September, one week prior to the end of the government’s fiscal year.
Did end-of-year spikes occur consistently every year?
We found that the end-of-year spikes consistently occurred across the decade, and generally followed the broad rise and fall of spending. On average September spikes accounted for between 6-8 percent of the annual spending in a fiscal year.
Did spending on new contracts differ from modifications?
USAspending.gov data captures two types of activity related to contracts: (1) the issuance of new contracts and (2) modifications to existing contracts. We split spending on contracts into these two categories, showing the amount of spending on new contracts, and changes in existing contracts. We found that spending on new contracts tended to spike in September.
Modifications, however, displayed less variance and did not spike as drastically at the end of each fiscal year. This suggests that new contracts—not modifications—drove the spikes at the end of each fiscal year.
Did spending differ by the type of good or service purchased?
USAspending data also captures what the government received from a contract, (i.e. goods or services.) This categorization scheme, called Product and Service Codes, contains almost 6,000 different categories, ranging from Dining Facility Maintenance to Buoys. For this analysis, we collapsed these 6,000 categories into seven high-level groups.
Three of those high-level groups are displayed on the chart to the right. Notably, we found that contracts classified as Facilities, Equipment, and Construction, displayed about 3.5 times the level of variance over the decade as total contract spending, and over 50 times the variance of spending on Weapons and Ammunition. Unlike the other categories, contracts for weapons ammunition did not spike at the end of the fiscal year.
Click the right arrow below to see the results of our next analysis: spending on new contracts versus contract modifications.
We found that the passage of a continuing resolution increased spending on new contracts by over 29 percent in the same week, all else held equal.
Continuing resolutions also lead to a 22 percent increase on total contract modification spending for that week, all else held equal. New appropriations did not have a statistically significant impact on either new contracts or on contract modification spending.
Click the right arrow below to see the results of our next analysis: spending on specific types of goods and services.
We found that the passage of a continuing resolution had a statistically significant impact on spending for all seven of the types of contracts we identified:
- Facilities, Equipment, and Construction
- Information Technology and Electronics
- Miscellaneous Supplies and Equipment, Clothing and Textiles
- Transportation and Logistics Services
- Research and Development
- Weapons and Ammunition
- Professional Services, Education, and Training
|Contract Category||Impact on Spending by Category|
|Facilities, Equipment and Construction||25%|
|Information Technology and Electronic||22%|
|Miscellaneous, Supplies and Equipment, Clothing and Textiles||33%|
|Transportation and Logistics||46%|
|Research and Development||17%|
|Weapons and Ammunition||48%|
|Professional Services, Education and Training||30%|