Some big names of corporate America—Amazon, IBM and Johnson & Johnson—sent representatives recently to counsel Obama administration procurement officials on best practices for implementing category management in government agencies, according to a General Services Administration official.
That governmentwide effort to consolidate contracts to save money through reduced duplication is well established in the private sector and in governments in the former British commonwealth, noted Tiffany Hixson, regional commissioner of GSA’s Federal Acquisition Service and a specialist in the category of professional services. She spoke Thursday at a gathering of contractors belonging to the Professional Services Council.
“The companies want the same thing the government does,” Hixson said—cost savings, efficiency, and an improved relationship with the industrial base. “Category management is about managing the industry base and the spend, so we have to get industry involved.”
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Hixson last month released for comment the administration’s fiscal 2016 strategy for expanding the category management effort—assembled by the Office of Management and Budget and an interagency council—in the realm of contracts for the professional services that require special expertise.
Valued at $63 billion in fiscal 2015, professional services are the second-largest category in the 10 that make up the government’s $272 billion “spend” on contracts deemed suitable for category management, said the Seattle-based Hixson, who next week takes on an additional title as assistant commissioner for professional services and human capital categories. The largest category is facilities construction; others include information technology and human capital.
The strategic plan “is a management approach not a contracting strategy,” she said. “We haven’t had an overarching way to communicate what’s going well govermentwide. Our fiscal 2017 plan will move heavily into realizing the category management vision.”
The administration’s 10 category managers meet monthly to gauge progress on a comprehensive analysis of agencies’ buying patterns and contract duplication, as well as to set metrics and improve the way contracting officers present requirements. Attendees come from the Defense and Homeland Security departments, the Office of Personnel Management and the Veterans Health Administration—all major buyers of services. “We want to shift to a target [for the spend] rather than capture what’s happening now,” she said.
A key challenge is using data from the Federal Procurement Data System, in which about 40 percent of the contracts are categorized vaguely as “other,” Hixson said. A team is studying whether perhaps new coding is needed to determine eligibility for category management.
Hixson drew some skepticism from contractors when she spoke of creating “best in class contracts” that clearly spell out requirements, reduce costs, enhance competition and aid small business. A private sector contractor wondered whether such contracts would stifle creativity.
Hixson said the intention of the “work in progress” is not to pre-select vendors, but simply label the vehicle and say, “This is a good contract that should be used more often.”