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QuickPay-Operational-Performance / Data-and-code

Data and code for econometric analysis
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Weight of a government contract in a company's business portfolio #30

Closed JNing0 closed 4 years ago

JNing0 commented 4 years ago

Think about ways to account for the weight of a government contract in a company's business portfolio.

Data:

JNing0 commented 4 years ago

@QuickPay-Operational-Performance/quickpay-team

Let's use the entries for "Federal action obligation" as a proxy for the weight of the contract in a particular year. This is the amount allocated to the contractor's account by the federal government. It is not the payment, but I think it is a good enough proxy for payment. Intuitively, you only obligate money to the customer's account if you have to pay in the near future.

Let's sum all federal obligations within a year and divide that by the contractor's sales volume in the same year. Because this is annual data, we will have the same number for all quarters in the same year. This number will give us some idea about the weight of government contract in the business portfolio.

Let's have some descriptive stats on this weight, especially on the small businesses.

If the contractor uses contract financing, then this obligation would also include financing payment. So let's also control for the contract financing factor in the descriptive stats.

vob2 commented 4 years ago

Sounds reasonable.

vibhuti6 commented 4 years ago

Thanks Jie and Vlad! I agree that this is a good way to proceed.

@JNing0 , I have one follow up question. Do we have a data dictionary for the Intellect data? In the summary I posted here, the sales are given for each year. I am not 100% sure if these columns refer to fiscal year or calendar year -- I am assuming it is calendar year at the moment. And so I am calculating sum of federal obligations by calendar year. Just wanted to confirm!

Also, another alternative can be to look at "base and exercised options value" which is defined as follows.

The change (from this transaction only) to the current contract value (i.e., the base contract and any options that have been exercised).

I am not entirely sure about the difference between this variable and the federal action obligation. The values in the two are the same 95% of the time in our sample, so I think we can just go with federal obligation and revisit this later if needed.