FEMA COVID-19 Contract Spending Snapshot

Published: May 07, 2020

Federal Market AnalysisArchitecture, Engineering, and Construction (AEC)Contract AwardsCoronavirus (COVID-19) PandemicFEMASpending Trends

Federal Emergency Management Agency contract spending data shows areas where FEMA is looking to contractors to support its pandemic response efforts.

Key Takeaways

  • The CARES Act provided the Federal Emergency Management Agency (FEMA) with more than $45 billion to support its lead role in the federal COVID-19 pandemic response, which includes contracted support and materials.
  • Through April, FEMA has obligated nearly $1.5 billion in COVID-19-related contracts, which is about 3% of their total CARES Act appropriation.
  • Over 90% of FEMA contract spending to date has been focused on the areas of Architecture Engineering and Construction Services, Medical and Scientific Equipment, and Health Services.

CARES Act Funds for the Federal Emergency Management Agency

In March, Congress passed the CARES Act to provide funding for federal and state COVID-19 response efforts and aid to vulnerable populations. The multi-trillion dollar stimulus and aid package included $45.8 billion for the Department of Homeland Security (DHS), of which all but about $400 million went to the Federal Emergency Management Agency (FEMA) for its lead role in coordinating the federal COVID-19 response.

Recently I took a high-level look at how the Department of Homeland Security (DHS) has been contracting its COVID-19-related funding to-date. One key takeaway from that overview was that the Federal Emergency Management Agency (FEMA) accounted for 98% of DHS’s contracted COVID-19 spending so far. This observation has led me to delve a little deeper into FEMA’s contracting to see what may be learned.

FEMA COVID-19 Contract Spending To-Date

Under federal acquisition rules set for the pandemic response, contracted coronavirus response activities using the CARES Act and other stimulus funds are required to be flagged under the COVID-19 National Interest Action (NIA) in the Federal Procurement Data System (FPDS).

Looking at what FEMA has reported for their contract obligations to date gives an indication of the rate of acquisitions, what kinds of contracts they have awarded, for what goods and services and with which companies.  To date, FEMA has obligated nearly $1.5 billion over the last two months, with April accounting for more than three-quarters of the spending as efforts gained momentum. (See chart below.)

Probing a little deeper into the FEMA sub-components which are issuing these contracts reveals which bureaus and offices have been busiest so far. Of the roughly $1.5 billion in contracts awarded through April, Regional Operations accounts for more than half of these dollars. Mission Support and Resilience represent 5.0% and 0.5% respectively. The remaining 42% of contract obligations through April were simply reported as being awarded by FEMA, with no sub-component bureau or office being reported. (See chart below.)

The Place of Performance where FEMA has been spending its COVID-19-related dollars is also somewhat concentrated, with the top nine jurisdictions (not counting Unreported) account for more than 85% of obligations. The top three jurisdictions – New York State, the District of Columbia and the State of Illinois – account for 72% of contact dollars awarded to date. The Undetermined or unspecified category accounts for another 7.8% of obligations and the remaining states account for 20% of contract obligations. (See chart below.)

As far as Preference Programs go, FEMA has awarded nearly all of these contract dollars to date without using any set-aside programs. Of the total $1.5 billion in contracts awarded to so far only $17 million (roughly 1.2%) has gone to companies using some form of set-aside program. (See chart below.)

With regard to the Primary Requirement of these contracts – the main type(s) of products and/or services being procured – the spending data shows that FEMA has been focusing about 50% of their dollars on Architecture Engineering and Construction services, with Medical & Scientific Equipment and Health Services accounting for 27% and almost 13% respectively. These three areas account for more than 90% of contract obligations to date and represent more than $1.3 billion. (See chart below.)

Similar to how the kinds of services and goods that have been procured to date are fairly concentrated, the number of firms receiving the large majority of these contract dollars is quite small, albeit the dollars awarded are well distributed among them. The top ten firms account for more than 70% of FEMA COVID-19 contract spending through the end of April. The top four firms account for $713 million and each average about 12% of the total $1.5 billion in awards. The next six account for $390 million and each average just over 4% of the total $1.5 billing in awards. The remaining 100+ firms that make up All Others account for $395 million (26%) of the obligations to date. (See chart below.)

By every indication the rate of federal COVID-19-related contracting is increasing as agency efforts continue to mature and adapt to the changing pandemic landscape. As agencies continue to report their COVID-19 contract data additional trends may emerge that will shed light on these efforts and how federal agencies are leveraging industry support to meet the demands of the national response.