Half-way Through FY 2016, How Much Are Agencies Spending on Contracts?

Published: April 06, 2016


Half way through fiscal year (FY) 2016 many of the top 20 federal agencies are contracting at lower levels than they were at this point in FY 2015, with a few exceptions.

Now that it is April and we are through the first and second fiscal quarters of FY 2016 we can look at the available federal contracting data to see how much federal departments have spent on contracts at the mid-point in the fiscal year and see what might be in store for us in the second half of FY 2016.

For context and comparison I looked the federal contract obligations reported for each federal agency for FY 2015, quarter by quarter, and then the first two fiscal quarters of FY 2016, which just closed at the end of March. Then, to get what I thought would be a cautious approach to estimating what spending might look like for the remainder of FY 2016 I took 90% of each agency’s total FY 2015 contract spending and subtracted out what agencies have already reported for actual Q1 and Q2 contract spending. So to set up a comparison I chose a baseline that agencies would spend in FY 2016 at least 90% of what they did in FY 2015. Finally, based on this 90% spending assumption I calculated each agency’s FY 2015 Q1 and Q2 relative percentages of total (90%) estimated obligations.

Contract Obligations Compared

Historically, the twenty top-spending departments accounted for about 98% of all federal contract obligations, so I focused my attention on these departments. In FY 2015, these twenty accounted for $94.6B and $113.3B in total contract obligations for Q1 and Q2 respectively. For comparison, these departments reported $90.7B and $133.6B in contract obligations for Q3 and Q4 respectively for FY 2015. (See table below.) These FY 2015 quarterly amounts were all higher than the FY 2014 quarterly levels except for Q3, April-June of 2015.

In FY 2016, these top twenty have reported $90.7B and $41.3B for Q1 and Q2 respectively, although DOD lags in their financial reporting by up to 90 days so Q2 is understated. Still, if these top agencies spend 90% of what they did in all of FY 2015 they will have more than $257B left to obligate in the remaining two quarters of this fiscal year.


  • Several departments have Q1 FY 2016 obligations lower than they did in Q1 of FY 2015 (Navy, Army, DOD, USAF, Energy, VA, DHS, GSA, and Ed). Most have marginally higher obligations year-over-year.
  • Several departments spent more in Q2 FY 2016 than they did in Q2 FY 2015 (Energy, HHS, GSA, State, Treasury, and Ed) or at least the same amount (DOI and DOC). The rest of the civilian departments lagged in Q2 FY 2016 compared to Q2 of last year and some of these are fairly large relative proportions (VA, Justice, DOT, and AID. Given the DOD’s three-month reporting delay we will not know the contracting rates among those departments until this summer.
  • Taken as a whole, the four defense branches in Q1 FY 2016 have reported $3.3B less in obligations than they reported in Q1 of FY 2015, although the Air Force has reported about $580 more year-over-year.  

A graphical representation of the relative proportions of each department’s contract spending gives a sense of seasonality and/or changes from year to year. Due to the sheer number of departments I have split these into Defense and Civilian segments. This further highlights the yearly changes for Air Force, Energy, HHS, DHS, VA, GSA, State, and Ed. (See charts below.)


This kind of macro-level analysis is useful in getting a general sense of quarterly and yearly patterns across the departments. Of course, the remaining FY 2016 obligation estimation depends on the 90% assumption described above. Last year, this approach pointed to roughly $270B in combined FY 2015 Q3 and Q4 obligations among the top twenty departments. A year later, the final FY 2015 Q3 and Q4 data shows that actual obligations came in at $224.3B, so the 90% assumption was optimistic. However, the difference turns out to be a matter of timing rather than magnitude. The final FY 2015 Q1 and Q2 obligations given above come in at $84.5B higher than what agencies reported originally at this time last year, reflecting revisions due to lagging obligation data being added later in the year.