Adjusting Government’s Buying Habits
Category management affects CIOs and program offices too.
The White House and General Services Administration’s category management initiative isn’t just the province of procurement offices and the contracting corps. It will have real impact in program offices as well. Even more so as the practice evolves from its current focus on common purchases to those that are unique and critical to the missions of a few or just one agency.
Managing spending by category won’t just change how common goods and services are bought, it will affect why they’re bought. Both ingredients of the “why,” requirements and demand, are generated by programs and need to be aggregated in ways that make sense for effective and efficient acquisition to achieve the desired outcomes of the agency.
The Office of Management and Budget and its Office of Federal Procurement Policy are creating an infrastructure that will affect every agency and everyone involved in acquisition one way or the other.
Already, OFPP Administrator Anne Rung and U.S. Chief Information Officer Tony Scott have prohibited civilian agencies from issuing new solicitations for laptop and desktop computers. In addition, Rung and Scott ordered chief information officers to make sure their agencies buy at least 80 percent of their laptops and desktops in just five new standard configurations, or explain in writing why not.
Make no mistake, these are mandates, not suggestions, and they put teeth in category management. These teeth, and others to come — Rung and Scott called this the first in a series of information technology buying directives — will bite beyond contracting shops into the prerogatives of CIOs, program officials and others who heretofore have been able to command computer bells, whistles and specific brands. The memorandum also calls for CIOs and chief acquisition officers to work together to achieve the goals of managing this category of spend.
Agencies also must now buy their laptops and desktops using just three contracts: NASA’s Solutions for Enterprise-Wide Procurement; the General Services Administration’s IT Schedule 70; and the National Institutes of Health’s Chief Information Officer–Commodities and Solutions.
Of course, category management-driven contract consolidation and elimination already had begun. Witness the Homeland Security Department’s decision to let its five-year, $11 billion ceiling Technical, Acquisition and Business Support Services (TABSS) contracts expire in 2017 and to move that spending to GSA’s One Acquisition Solution for Integrated Services (OASIS) contract.
The Army and Air Force also pledged to move spending onto OASIS. In their first full year, OASIS and OASIS Small Business, run by GSA’s professional services category management team, already accounted for nearly half a billion dollars in professional services spending, with the Air Force as the leading user at $233 million in orders as of Oct. 9.
About 20 percent of the $60 billion in governmentwide professional services spending now flows through GSA-managed contracts, says Tiffany Hixson, the agency’s professional services category executive. She is adamant that her customers are program, not only procurement, organizations. “From my perspective, it’s the full acquisition community that is my customer,” Hixson says. “That’s going to be a big focus for GSA and [the Office of Federal Procurement Policy] — that this isn’t just about the contracting offices.”
Governmentwide category teams will reach deep into agencies as their leaders begin managing supply and demand across the federal enterprise. Wielding data on each agency’s spending, these managers can be expected to dig into what is driving requirements. And as Hixson observes: “The program side of the house is the big driver in terms of requirements.”
Managing demand gets into the nitty-gritty of program operations pretty quickly, as the Defense Department’s Ken Brennan explained at a meeting in November.
The U.S. Transportation Command’s outsized demand for next-day air delivery raised eyebrows at the Pentagon, explained Brennan, a deputy director for services acquisition in the office of Defense Procurement and Acquisition Policy. When TRANSCOM dug into its delivery demand, it found officials were overpaying to get parts the next day just to be sure to have them on hand, even though they weren’t needed until the following week, Brennan said.
This kind of apparent excess no doubt arises out of the desire to quickly and effectively supply programs that are critical to warfighters, but it likely will be called into question, if not curbed, under demand management.
Programs stand to gain by category management. Resources once tied up in duplicative contracts, diffuse purchases of similar goods and services, and poor vendor relationships should be released to flow to mission-critical work.
Governmentwide management of $270 billion in annual spending on commonly bought items and support ought to enable many agencies to offload a good portion of purchases to a few best-in-class contracts, as is intended by the laptop-desktop initiative and the transfer of TABSS to OASIS. That, in turn, should relieve agency procurement professionals to focus on improved management of the products and services most important to agency missions.
Timothy W. Cooke is CEO of ASI Government.