Q4 Spending Statistics in Government Contracting

Panic over the summer holidays and the ensuing anxiety is like clockwork for us, the Government Contracting obsessed. The calendar flips to July, BOOM—pipelines are returned from the dead, emails start flying, and proposal war rooms dissolve into organized chaos. No one in Government Contracting is a stranger to these seasonal trends, and every year it feels like we are all counting on a little extra fourth-quarter (Q4) magic

The end of the fiscal year (FY) is often met with hyperbolic headlines. You see them every year:

• Race to the Finish—Maximizing Q4 Opportunities

• Impact of Q4 spending rush on small businesses

• Are you ready for the 4th quarter spending spree?

• What the coming fourth-quarter spending spree will be worth to government contractors

But panic aside, is the Q4 hype real? The Pulse did some research to find out.

Relevant to our research, Data Lab found “seasonal trends in contract spending occurring within a single year. [Data Lab] 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 before the end of the government’s fiscal year.”

Based on this, we can see that federal government spending spike in Q4 – but how can Government Contractors use this data to save time and accurately focus their Q4 engagement?

To answer these questions, The Pulse primarily analyzes SAM.gov, FPDS-NG, and USASpending.gov data to determine general Q4 trends and identify the who, what, and how of Q4 spending.

• Who: Who does the federal government typically buy from in Q4?

• What: What does the federal government buy the most of, and the least, in Q4?

• How: How does the federal government buy these services?

We also examine current FY spending thus far, including isolating Q4 data, to develop a realistic picture of how much federal government discretionary money is left on the table as we approach that specific Q4.

• FY23
• FY22
• FY21
• FY20
• FY19
• FY18

The Pulse has made it our mission to track reported contract data from the Q4 of the most recent fiscal years. When we first wrote this article (August 2018), The Pulse analyzed Q4 spending statistics between FY 2014 through 2018. We aim to update this piece at least once every calendar year to keep it accurate.

Note: All data are mined from FPDS-NG, SAM.gov, USASpending.gov, and Data Lab.

Last fiscal year, the federal government’s Q4 spending accounted for 34% of all FY22 obligations. Based on our research throughout the years, we have found that federal agencies spend around 69% of their discretionary funding before the start of Q4, which leaves an average of 31% of all FY funds available to Government Contractors for the Q4 sprint.

The Pulse compared Q4 spending across 73 federal agencies and found that, on average, you can expect at least 70 federal agencies to purchase Q4 of every FY. The top 5 federal spenders in Q4 include no surprises:

1. Department of Defense (DOD): Average ~$100B
2. Department of Health and Human Services (HHS): Average ~$12B
3. Department of Veterans Affairs (VA): Average ~$12B
4. Department of Homeland Security (DHS): Average ~$7B
5. Department of Energy (DOE): Average ~$5B

Want to see how much your target federal agency spends in Q4? Check out our interactive chart!

The Pulse evaluated the identified “contractor type” under all Q4 awards to assess what type of Government Contractors get the most attention in Q4. Our findings here are not groundbreaking. Unsurprisingly, large Government Contractors get the most significant percentage (more than half) of the Q4 spending budget.

The Pulse analyzed the spending under the federal government-defined products and services categories, including the Product Service Code (PSC) and North American Industry Classification System (NAICS), to discover what your federal government customers are buying the most and the least in Q4.

By understanding what products or services the federal government is buying, you can determine if your offerings are enough to convince that customer to break out of their government purchase cards before the new (fiscal) year.

• Most Popular: In Q4 FY23, FY22, FY21, FY20, FY19, FY16, FY15, and FY14 - PSC Category: R (Services, Other than R&D) was the flavor of the quarter.
• Outlier Favorite: In Q14 FY18 and FY17 - PSC Category: 1 (Products) was the favorite, with $33B being obligated just in Q4 of FY18 and $28B in Q4 FY17.
• Least Popular: Out of the ten fiscal years we looked at, the PSC Category that received the least love in Q4 is PSC Category: E (Physical Sciences).

Of the nine fiscal years we examined, the NAICS that received the most love in Q4 is NAICS 54 (Professional, Scientific, and Technical Services). Opposite of NAICS 54 is NAICS 55 (Management of Companies and Enterprises), serving as the least favorite of Q4 spenders.

The Pulse analyzed how much was spent across single agency vehicles (i.e., internal IDIQs), multiple-agency vehicles (i.e., GWACs), purchase cards, and other transactions during Q4 to understand how these methods were being utilized and how the federal government buys during this period. By understanding how they are buying, you’ll determine if you have the right tools to make a quick sale.

The growth in Q4 spending has stayed pretty stagnant since FY14, even when adjusted for inflation. 

So what is our take? The end of each FY is a lot like the end of the calendar year; a whole lot of hype with only a few people awake at midnight to reap the rewards.

Is there fun and money to be had? Sure.

Should you count on it? We wouldn’t.

Based on our research, we believe high expectations will only lead to low disappointments, and your P&L can’t be dependent on that final moment when the ball finally drops. However, if you're armed with proper planning, an understanding the Q4 trends, and little research, you can make a (fiscal) new year's resolution and shape that new sales pipeline!

Last Updated: January 25, 2024 [Originally Posted: August 2, 2018]

Pulse Data Featured in External Publication

Data used to support Senatorial Letter for U.S. Senators Ron Johnson (R-Wis.), Claire McCaskill (D-Mo.), Rand Paul (R-Ky.) and Gary Peters (D-Mich.).

Data featured in Nextgov article , Yahoo Finance , CHiefHRO, and Federal News Network, and Federal News Network Radio.