How Government Agencies Can Manage Tail Spend

Government entities have an extensive procurement process that outlines how contractors can win their business. In an ideal world, government entities that buy goods and services would be competitively sourced, with vendors competing to offer the best discounts to secure an agency as a customer. Sometimes, a contract cannot fulfill an agency’s needs for which the agency must purchase from a vendor not on contract. This is known as tail spend.

Tail spend includes:

• ad-hoc vendor selection
• purchases within entities delegated authority or below spend thresholds
• no negotiated agreement
• minimally defined procurement process
• not actively managed

There are many reasons why a government agency might need to spend without a contract. One reason is that it provides the government with a flexible way to start new projects. It saves money, time, and effort than to go through the bidding process. With Request for Quote, buyers have the ability to request a discounted price on single-SKU purchases greater than $10,000 or 999 units—helping to support spot buys and buying in bulk. Agencies can access thousands of pre-vetted bulk suppliers who can support custom offers tailored to your entity’s needs.

How government agencies can use Amazon Business tail spend solutions

Government agencies of all sizes trust Amazon Business. We currently serve over 90 of the 100 most populous local governments, all 50 states and D.C., and all 24 Chief Finance Officers (CFO) Act Agencies have an account. From office supplies to first responder equipment, government agencies can unlock business-only pricing for over 53 million products, all in one place without a pre-existing negotiated price or agreement. Qualified agencies can make tax-exempt purchases and manage tax-exemption permissions across the organization. Furthermore, agencies are able to source products from certified sellers by searching certifications like Section 889 and drive progress on Environmental, Social, and Governance (ESG) goals by tracking and reporting spend across your organization for local buying, sustainability, and supplier diversity. Experience the ease and speed of intelligent fulfillment and order orchestration driven by digital purchasing innovation, with no spend minimums, or restrictive contracts.

Finding a procurement solution that meets government standards can be challenging. Amazon Business makes it easy to drive savings for taxpayers and meet policy compliance. Receive dynamic pricing across business-relevant product categories, complemented with built-in tools. With multi-user accounts, purchase approvals, tax-exempt purchasing, business only pricing and quantity discounts, negotiated pricing, Seller Credentials, procurement-system integration, Amazon Business is tailored to the unique needs of the government.