Open:FactSet Forum

Monitoring Activity of Public Companies through Global Government Procurement Data

The role of government procurement in the global economy is often underestimated, especially in respect to the participation of publicly listed companies as leading contractors in the process.

In fact, the reality is that the U.S. federal government is the single largest consumer in the world as according to database by it is purchasing over USD 500 bn in goods and services annually for the period between 2010-Q3 2019. On average, around 40% of this amount is awarded to publicly listed companies directly or through subsidiaries. In the EU, government procurement of goods, services and works reached 15 % of EU’s GDP in 2018 and funds awarded to publicly listed companies represented 35% of this amount.

In terms of numbers of tenders – the PLCs receive no more than 10% of all tenders awarded annually both in the US and Europe - thus demonstrating the significant average deal size and the significance of these companies for the execution of public project worldwide.

Macro analysis could be quickly transformed into individual ticker monitoring with insightful applications for publicly enterprises heavily involved in government procurement (Figures 1 and 2). The approach offers unconventional understanding of market signaling for frequent awardees both directly and through following on subsidiary level.

The TenderAlpha data product also offers a “point in time forecast” for pipeline of government sales on ticker level as per the contract execution time frame and the budget execution percentage to date thus allowing analysis of historical stock performance compared to government sales developments in the last 10 years.

Figure 1: Top 5 US PLCs by Amount of Awarded Contracts 2010-2019 (USD bn)

Figure 2: Top 5 EU PLCs by Amount of Awarded Contracts 2010-2019 (USD bn)