essays in public finance and industrial organization a dissertation ...
essays in public finance and industrial organization a dissertation ...
essays in public finance and industrial organization a dissertation ...
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
CHAPTER 4. YEAR-END SPENDING 164<br />
accounted for by contracts of more than $1 million. Seventy percent of contract<br />
spend<strong>in</strong>g is by the Department of Defense. The Department of Energy <strong>and</strong> NASA,<br />
which rely on contractors to run large labs <strong>and</strong> production facilities, <strong>and</strong> the General<br />
Services Adm<strong>in</strong>istration, which enters <strong>in</strong>to government-wide contracts <strong>and</strong> contracts<br />
on behalf of other agencies, are the next largest agencies <strong>in</strong> terms of spend<strong>in</strong>g on<br />
contracts. Twenty-n<strong>in</strong>e percent of contracts were non-competitive, 20 percent were<br />
competitive but received only a s<strong>in</strong>gle bid, <strong>and</strong> 51 percent received more than 1 bid.<br />
Sixty-five percent were fixed price, 30 percent were cost-reimbursement, <strong>and</strong> 6 percent<br />
were on a time <strong>and</strong> materials or labor hours basis.<br />
4.3.2 The With<strong>in</strong>-Year Pattern of Government Procurement<br />
Spend<strong>in</strong>g<br />
Figure 4.1 shows contract spend<strong>in</strong>g by week, pool<strong>in</strong>g data from 2004 through 2009.<br />
There is a clear spike <strong>in</strong> spend<strong>in</strong>g at the end of the year with 16.5 percent of all<br />
spend<strong>in</strong>g occurr<strong>in</strong>g <strong>in</strong> the last month of the year <strong>and</strong> 8.7 percent occurr<strong>in</strong>g <strong>in</strong> the<br />
last week. The bottom panel shows that when measured by the number of contracts<br />
rather than the dollar value, there is also clear evidence of an end-of-the-year spike,<br />
with 12.0 percent occurr<strong>in</strong>g <strong>in</strong> the last month <strong>and</strong> 5.6 percent occurr<strong>in</strong>g <strong>in</strong> the last<br />
week.<br />
Table 4.1 shows that the end of the year spend<strong>in</strong>g surge occurs <strong>in</strong> all major<br />
government agencies. If spend<strong>in</strong>g were distributed uniformly throughout the year,<br />
we would expect to see 1.9 percent <strong>in</strong> the f<strong>in</strong>al week of the year. The lowest agency<br />
percentage is 3.6 percent.<br />
Table 4.3 shows the percent of spend<strong>in</strong>g on different types of goods <strong>and</strong> services<br />
that occurs at the end of the year. The table shows some of the largest spend-<br />
<strong>in</strong>g categories along with some selected smaller categories that are very similar to<br />
the large categories. Construction-related goods <strong>and</strong> services, furnish<strong>in</strong>gs <strong>and</strong> office<br />
equipment, <strong>and</strong> I.T. services <strong>and</strong> equipment all have end-of-year spend<strong>in</strong>g rates that<br />
are significantly higher than the average. These categories of spend<strong>in</strong>g often represent<br />
areas where there is significant flexibility about tim<strong>in</strong>g for perform<strong>in</strong>g ma<strong>in</strong>tenance