The Government shutdown is the centerpiece of the current Federal news cycle, but I figured we could all use a break from the political uncertainty. The market researcher and data nerd in me thought what a better way to be distracted than to dive into a multi-billion dollar information technology contract vehicle!
One of the more interesting, anticipated, and lucrative IT contract vehicles launched recently has been the Department of Veterans Affairs (VA) Transformation Twenty-One Total Technology (T4) Program. The T4 acquisition resulted in contracts to 15 companies during June, 2011 for a ceiling value of $12 billion.
Usually when one of these larger contract vehicles is issued, the biggest question is if the contract is being used and who is winning money on the contract. So let’s take a look at the spending.
Spending by Fiscal Year and Fiscal Quarter
Currently, according to the Federal Procurement Data System (FPDS) T4 has over $1.5B in reported spending to date. The chart below outlines the reported spending per fiscal year with all figures in dollars.
There is still more FY2013 spending to be reported, but we can see even without a full accounting of FY2013 – VA spent over $800M during the last fiscal year. And interestingly there has already been over $100M of spending for FY2014.
The data becomes a little bit more interesting when we break it out by quarter.
Q4 is usually a heavy spending quarter but you can see the clear jump in spending from Q4 in FY 2012 to Q4 in FY2013. The Department of Veterans Affairs is definitely driving more and more IT spending through this contract.
The Vendors of T4
From a vendor perspective, who is winning the IT work going through this contract vehicle?
Systems Made Simple has currently received the largest share of T4 obligated dollars with over $450M. This is over $200M more than Harris who is the 2nd largest T4 contractor.
T4 is increasingly a major vehicle for IT projects at the Department of Veterans Affairs. If the current trends continue we should see at least a billion dollars of spending go through T4 for FY2014. The VA contracting office has already moved forward with an onramp procurement for a new SDVOSB – an onramp enables the Government to add new vendors to a contract vehicle after the initial contract awards.
Despite the current political and budgetary environment the Department of Veterans Affairs is an agency that should get adequate financial support with the increasing focus on caring for our nation’s veterans. For IT vendors that are looking to work with VA, make sure you understand the role T4 plays in acquisitions when you are developing your business development strategy.
Feel free to reach out to us with any questions about the data or analysis in this blog. To learn more about the Department of Veterans Affairs, the T4 contract vehicle, or if you are interested in meeting some great small IT contractors! Reach out to us via email, Linkedin, Facebook, or Twitter!
Vajira Ranaviraja has over nine years of market research and product development experience and is currently a Principal at KRT Associates LLC. The vast majority of his experience has been in the Federal sector where he has directly consulted clients on how to best expand their footprint within this market space.