The federal government is one of the largest purchasers of goods and services in the world, with a wide range of needs that require contractors to fulfill. From construction and technology to healthcare and defense, there are countless opportunities for businesses to win contracts from the government. But just how much money does the government spend on these contracts?
According to the Federal Procurement Data System (FPDS), the government spent a total of $586 billion on contracts in the 2020 fiscal year. This figure represents a 17.1% increase from the previous fiscal year, which can be attributed to the COVID-19 pandemic and the resulting need for additional goods and services.
Of the total $586 billion spent, the Department of Defense (DOD) was the largest spender, accounting for $403.8 billion. Other top-spending agencies included the Department of Health and Human Services (HHS) at $25.8 billion, the General Services Administration (GSA) at $23.4 billion, and the Department of Energy (DOE) at $20.7 billion.
Small businesses also played a significant role in federal contracting, with a total of $132 billion awarded to them in the 2020 fiscal year. This represents nearly 23% of the total contracting budget, giving small businesses a significant opportunity to work with the government and expand their operations.
Contracting opportunities with the government can be highly lucrative, but they also require a significant investment of time and resources to win. Businesses must compete with others to prove their capabilities and provide the most competitive pricing. Additionally, businesses that work with the government must be prepared to navigate a complex system of regulations and requirements that can be difficult to understand.
In conclusion, the federal government spends a significant amount of money on contracts, with the Department of Defense being the largest spender. Small businesses also have a significant opportunity to win contracts and expand their operations, but must be prepared to navigate a complex system. For businesses interested in contracting with the government, it is important to become familiar with the regulations and requirements, and to ensure that they have the resources and capabilities to compete effectively.