OMB Memo Outlines Procurement Consolidation Plan
In March of this year, the current administration issued Executive Order (EO) 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement. In a nutshell, the EO directs the federal government to shift procurement of domestic common goods and services to the General Services Administration (GSA). While GSA discussed the procurement consolidation during an industry webinar in May, a memo issued earlier this month provides additional details.
Office of Management and Budget (OMB) memorandum M-23-31, provides a high-level outline of the government’s plan to consolidate federal procurement activities. Notably, the plan reaffirms the government’s commitment to Category Management, which kicked off as a government-wide initiative in 2014. The plan also emphasizes the use of Best-in-Class contracts, which are integral to Category Management, and places renewed focus on the efforts of previous administrations to reduce contract duplication across the federal government.
You can review the full, 8-page memo here, and a quick summary below.
Overview of OMB Consolidating Federal Procurement Activities Memo M-23-31,
OMB Memo M-23-31 highlights the government’s two pronged approach to implementing the procurement consolidation called for in EO 14240.
❶ Increasing Use of Government-Wide Contracts, Including Best-in-Class (BIC) Contracts
- Plans are in the works to revise the FAR to require the use of existing government-wide contracts if those contracts include the products and/or services that meet an agency’s need.
- The memo also tasks various bodies to work together to identify the need for new centralized government-wide contracts or modification of existing government-wide contracts, as well as the mandated use of those contracts.
- A focus is placed on mandating government-wide contracts that meet Category Management Best-in-Class criteria.
❷ Centralizing Procurement Functions
- When GSA has the required subject matter expertise, GSA will take over simple requirements that are:
- Easy to standardize
- Mission agnostic; and
- Require a low level of agency involvement
- In cases where GSA do not hold the required subject matter expertise for simple requirements, OMB and Category Managers will identify a centralizing agency.
- Agencies will retain procurement of complex requirements that are:
- Hard to standardize
- Mission critical, and
- Require a high level of agency involvement
Takeaways
Decreased Open Market Awards & Increased Used of Government-Wide Contracts
While government contract vehicles play a significant role in helping companies capture opportunities and simplify the government procurement process, they have historically accounted for roughly 20 percent of contract awards. As agencies begin to implement procurement consolidation initiatives, expect to see less and less awards through open market. Holding a contract vehicle may transition from a competitive edge, to a must-have.
The GSA Schedule’s Alignment with Category Management
The GSA Multiple Award Schedule (MAS) Contract is already the most widely used government contract. Plans for the new procurement consolidation may elevate the GSA Schedule to a new level.
The GSA Schedule is not only a government-wide contract that meets Category Management principles, it was actually restructured in 2020 to directly align with Category Management. The GSA Schedule Contract as a whole qualifies as a Category Management multi-agency contract that satisfies rigorous standards set for leadership, strategy, data, tools, and metrics. Certain GSA Schedule Special Item Numbers (SINs) qualify as Best-in-Class solutions.
Learn more about the connection between Category Management and the GSA Schedule here.
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