The federal market is rapidly moving to the use of Multiple Award Contracts (MACs) because the bureaucracy has to cut down further on competition to operate under tight purchasing budgets. You must have a MAC to win contracts unless you sell products priced under $3,000.
What are MACs?
MACs are contracts with a number of “qualified” companies (“the chosen”) to deliver a particular type of product or service at pre-negotiated government prices. The key is the proposal to the government about your qualifications and your “special government pricing.”
The contract periods for MACs range from 3 to 10 years, and some have additional periods of performance than can be exercised at the option of the government.
A transaction (revenue receipt) takes place only when an order is placed with one of the chosen few.
Buyers save purchasing dollars because they only have to compete the purchase among the chosen few.
Some MACs can be used by any federal buyer worldwide while most MACs are for the use of a specific agency.
Agency Specific MACs
The number of currently active “agency specific” MACS probably exceeds 4,000. The government does not have an accurate count. Does that surprise you?
The number of companies holding an agency specific MAC will range for 3 to 50 or so.
One might think that agency specific MACs might involve less revenue than government-wide, but that is not necessarily true. Some agency specific MACs can have budgets in the billions or in some cases tens of billions. Agency specific MACs for information technology products and service can exceed $50 billion over their term.
Government-wide MACs require White House approval. The number of currently active government-wide MACS is around 10 – 12. The number of companies holding a government-wide MAC will range from 3 to 50 or so and in the case of GSA schedules over 20,000.
Annual revenue through government-wide MACs and agency specific MACs is greater than $200 billion and is rising year-by-year as a percent of total contract dollars.