Civilian Agencies Poised to Smash Procurement Records in FY24

Civilian federal agencies are on course to reach a historic procurement record in fiscal year 2024, with expenditure expected to exceed $300 billion. According to Bloomberg Government data, this represents a 4% increase in year-over-year spending, even as the defense sector declines. The fourth quarter of the fiscal year, normally a high expenditure time, is estimated to account for a staggering 38% of total yearly procurement, or around $109 billion. While this figure is marginally lower—$200 million lower—than last year's fourth quarter, it nonetheless demonstrates the ongoing growth in civilian procurement.

What makes this year stand out is the overall stability of civilian spending, which has climbed by 7% over fiscal 2022. Since 2020, the Veterans Affairs (VA), Health and Human Services, and Homeland Security departments have accounted for more than half of the government's fourth-quarter spending, driving this expansion. September, in particular, is expected to see the majority of these expenditures, as the final push to reach year-end targets frequently drives spending to record highs. Historically, September alone has accounted for at least 49% of fourth-quarter liabilities, and in some years, up to 71%.

This increase in procurement spending benefits not just huge firms, but it also creates an excellent opportunity for small enterprises. Up to $35 billion in year-end contracts are expected to go to small business vendors, giving them a critical foothold in the government contracting market. For small businesses wanting to acquire government contracts, the year-end rush gives an excellent opportunity to enter the market and profit on the federal government's push to reach its small company contracting goals.