With the fourth federal fiscal quarter underway, vendors are wondering where end of year spending will happen. If history serves as a guide, one possible place to look is the Department of Homeland Security's EAGLE contract vehicle.

In federal fiscal year 2007, spending through task orders on DHS' EAGLE contract vehicle spiked in the fourth quarter dramatically. Increased spending in the fourth quarter of the fiscal year is expected at all agencies. However, spending on EAGLE was much more pronounced than the average total agency spend made in fourth quarter....by far! Spending in 4Q of FY2007 through DHS EAGLE was 46% of total spend through EAGLE that year or $2.4 billion--almost quadruple the spending from the previous three quarters of the year combined! The average agency fourth quarter spend is 34%.

Even if the large fourth quarter TSA OASIS award to IBM is eliminated from the analysis as an outlier, fourth quarter spending is still 2.5 times the total for the rest of the year. Moreover, the sheer number of task orders awarded in 4Q FY07 is remarkable--53 task orders for the first three quarters combined compared to 84 task orders in the fourth quarter alone (83 if you don't count OASIS).

Exhibit 1: EAGLE Task Order Awards by Value by Fiscal Year Quarter

Source: INPUT, Eagle Program Office

As we come into the fourth quarter of FY2008, it will be interesting to see if the fourth quarter spending spike is as dramatic as it was last fiscal year. We're betting it will be high again this year, though perhaps not as high as it was last year due to the OASIS factor. It is relatively easier to spend end of year (use-it-or lose-it) remaining budget through a task order vehicle than through full and open competitions. The September spike seen in Exhibit 2 below, which shows number of contracts and value of those contracts awarded in 4Q by each month of the quarter, may further testify to the ease of use of task orders for end-of-year spending. Vendors are advised to pick up the phone, hop on the metro, or hail a cab to DHS as quickly as possible to lay the ground work now for the FY08 end of year DHS rush to spend.

Exhibit 2: EAGLE Task Order Awards in 4Q of FY07

Source: INPUT, Eagle Program Office