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An Analysis of Fiscal Years 2014 to 2016 Navy Fourth Quarter Spending: Trends and Characteristics of Q4 O and M Contractual Awards

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Technical Report

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Naval Postgraduate School Monterey United States

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Former United States Under Secretary of Defense Robert Hale stated in a September 2016 article for Breaking Defense, We need to find practical ways to apply the brakes to year-end spending so that the Department of Defense funds only its highest-priority needs. This paper analyzes trends and characteristics of the Quarter 4 Q4 Navy spending habits driving the governments decisions and the related impacts of those decisions. Previous trends have shown that under-execution in the government leads to future funding decrements. Although seldom documented, this practice leads to increased late spending and a potential for executing ahead of need, but results in an obligation of funds. Our research identifies trends across contractual spending in the Navy Operations and Maintenance accounts between fiscal years 2014 and 2016 to help ensure the government is getting the best value for the limited resources available. Analysis indicated that actual Q4 spending appears higher than historical rates, in excess of 35 in all years. We also noted trends in Q4 spending leading to an increased level of Indefinite Delivery Contracts, and a significant increase in overall contract actions processed. Surprisingly, even with the rush to obligate, 2014 data showed Q4 obligations trended higher than average utilizing Full and Open Competition.

Subject Categories:

  • Administration and Management
  • Logistics, Military Facilities and Supplies

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