Contract Consolidation Effort Saves $2 Billion and Counting

Two years after the Office of Federal Procurement Policy embraced the consolidation-of-contracts strategy known as category management, the White House on Friday announced that the effort to “transform the federal marketplace” has delivered $2 billion in savings.

Chief Acquisition Officer Anne Rung, in a blog post, said the Obama administration’s effort to modernize government and incorporate private-sector best practices through bulk purchasing is “on track” to save $3.5 billion by the end of next year. “We’ve seen prices drop by as much as 50 percent of personal computers since the release of the workstation policy,” Rung said. “By the end of 2016, 45 percent of the $1.1 billion spent in annual purchases for desktops and laptops will be consolidated into three governmentwide contracts.”

Small business goals were exceeded, Rung said, and 700 duplicative contracts were eliminated. 

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More than 10,000 agency acquisition professionals, she added, are now using the General Services Administration’s online acquisition gateway portal, as planned. In addition, the administration has “graduated our first class of Digital IT acquisition specialists, agency contracting officers who are trained in agile approaches to purchasing IT,” she wrote. “And we’ve created the first-of-its-kind management structure of category leaders focused exclusively on promoting agile and other inventive practices to buying across government."

Sometime this week, according to Friday’s announcement, Rung’s office will release a draft Category Management Circular for comment that will “further institutionalize category management” so the federal government can “buy as one” beyond the Obama years.

The new government structure to implement category management and improve procurement transparency includes 10 specialized category managers and 350 support staff.

“We hosted the first-ever governmentwide buying events to help agencies aggregate their demand and reduce unit prices and administrative costs,” Rung wrote. “Through the laptops and desktop policy, GSA awarded three small businesses multi-agency Blanket Purchase Agreements, resulting in an average savings of 15.6 percent, with additional savings possible at the agency level. Further, we’re on track to meet or exceed our goals to reduce the number of contracts for laptops and desktops by 20 percent.”

The Obama team is also excited about using innovation and new efficiencies from consolidating contracts to pursue its social justice agenda. “Specifically, by leveraging the federal government’s supply chain,” Rung wrote, agencies have implemented measures to protect LGBT rights, ensure fair pay and safe workplaces, establish a minimum wage, and prevent human trafficking, while also taking “steps to drive sustainable purchasing and strengthen environmental stewardship requirements in government acquisitions.”

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