Are the spending floodgates about to open?

Deltek has released a projection for fiscal 2014’s fourth quarter based on analysis of agency contract spending over the last 11 years. The data show there has been a marked shift in the last five years towards high Q4 spending, with correspondingly lower Q1 and Q2 spending in the fiscal year. Given the actual and estimated spending for the first three quarters of fiscal 2014, Deltek predicts that the fourth quarter that just began will have the highest percentage spending in the last 10 years. Selected results from Deltek report are charted below.

Q4 Spending by Agency (Top 10)

Deltek averaged the Q4 spending of each agency over the last five years and ranked them from least to greatest. We have selected the top 10 agencies to represent.

Q4 Spending by Market Segment (Top 5)

Agencies spent the highest percentage of their Q4 contract spending in the following five markets. Deltek mentions specifically that, within the market segment of information technology, the largest categories were technical and professional services.

Projection for Q4 FY 2014

Deltek's projection for fiscal 2014 draws on spending trends of the last five years (Pie Chart 1) and then factors in known spending so far this fiscal year (Pie Chart 2). Both charts reflect estimated amount of contract spending in FY 2014 ($489.5 billion).

Pie Chart 1 - Assuming quarterly spending based on the 5 year average -- a "typical year."

Pie chart 2 -Q1 based upon actual reported spending for Defense & Civil.
Q2 based on actual Civil and estimate for Defense.
Q3 is an estimate for Civil and a projection for Defense.
Q4 projection is the largest percentage in over 10 years.

SOURCE: Deltek, "Preparing for a Record Breaking Q4 Spending Spree".