Transforming the Federal Marketplace, Two Years In

Summary: It’s been two years since we laid out the Administration’s plan to transform the Federal marketplace. Here’s a look at what we’ve accomplished, and what’s next.

Over the last two years, we’ve focused on our mission to implement the President’s vision for a modern government– one that leverages private-sector best practices to achieve a Federal Government that is smarter, savvier and more effective in delivering for the American people.

We’ve saved more than $2 billion through category management and are 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. 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 government-wide contracts. We’ve hit 10,000 users on GSA’s acquisition gateway, an online portal supporting category management. We’ve not only met our small business goals—we’ve exceeded them. We’ve graduated our first class of Digital IT acquisition specialists, agency contracting officers who are trained in agile approaches to purchasing IT. 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.

We’re proud of what we have achieved thus far – and we’re taking steps to ensure this progress continues.

In fact, I’m excited to announce the release of a draft Category Management Circular, available for public comment [this] week, that will further institutionalize category management across the Federal Government so that we can continue to realize bigger savings, better efficiencies, and improved performance for years to come.

Two years ago, I laid out the Administration’s plan to transform the Federal marketplace. This plan had three core aims: (1) buying as one through category management, (2) driving innovation, and (3) building stronger vendor relationships.

Here’s a look at the progress we’ve made in each of these areas:

Buying as One through Category Management

Two years ago we took category management government-wide. It’s an approach that is leveraging best practices in both the public and private sector and an approach that is shifting the Federal Government from managing purchases individually across thousands of procurement units to buying as one, in order to leverage the Government’s purchasing power.

We carefully built the infrastructure to support category management to ensure that it becomes a permanent approach to buying common goods and services. We created a governance structure, developed guidance that laid out best practices of category management, and appointed ten category managers and 350 supporting team members. We advanced innovative and effective category management policies that streamline the more than $8 billion in annual spending for IT software, hardware and mobile services and devices, and to drive further savings, improve transparency, and reduce duplication in contracting.

We hosted the first-ever government-wide buying events to help agencies aggregate their demand and reduce unit prices and administrative costs. Through the laptops and desktop policy, GSA awarded three small businesses multi-agency Blanket Purchase Agreements, resulting in an average savings of 15.6% 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%**.

The proposed Category Management Circular aims to institutionalize the principles that are making the Federal supply chain more effective, efficient, and streamlined. The Circular establishes the broader organizational vision needed to accelerate and successfully manage the many dimensions of interagency collaboration that must occur for the Federal Government to buy as one. It also expands upon the concepts of economy and efficiency in our earlier policies to establish the key principles, strategies, policies, processes, governance structure, and roles and responsibilities to implement category management fully as the principal way in which the Government acquires and manages its common requirements.

Driving Innovation

We’ve simplified the Federal marketplace and driven innovation into the Federal acquisition space. For instance:

• We launched the first-ever Digital IT Acquisition Professional Training program with a curriculum based in principles of agile software design so that acquisition professionals could gain valuable hands-on experience applying modern IT procurement strategies.
• Since the creation of Agency Innovation Labs and Agency Innovation Advocates, 15 agencies completed or are actively pursuing projects that leverage new ideas or best practices, which have shown reduced time from identification of program need to initial delivery of results, increased participation of new companies and other non-traditional government contractors, and other benefits.
• And in collaboration with the U.S. Digital Service, we launched the TechFAR Hub, which provides agency personnel involved in the procurement process with practical tools and resources for applying industry best practices to digital service acquisitions.

Through these initiatives and more, we are creating a pipeline of acquisition innovation talent and a pathway for them to innovate.

Building Stronger Vendor Relationships

Finally, we took a series of steps to foster an environment that encouraged early, frequent, and constructive engagement with industry. As a part of these efforts:

• We launched an Acquisition 360 survey for IT acquisitions, which represented the first time we’ve systematically collected feedback from the vendor community on specific agency IT acquisitions. The responses yielded valuable insights into the procurement process, while improving relationships with contractors.
• We launched the second phase of Acquisition 360 in June 2016, and it is on track to cover a minimum of 1,500 procurements across the 24 CFO Act agencies to continue to improve acquisitions across Government. We are working with our senior procurement executives and the FAR Council to develop an appropriate approach for institutionalizing this important feedback mechanism moving forward.
• We created Lifting the Curtain, a new industry-Government series to share best practices and other information on a range of important procurement issues, including debriefings.
• We have also collaborated closely with the Small Business Administration and agency small business Directors to meet and exceed our small business goals and break down barriers that may stand in the way of reaching new and/or established small businesses. We exceeded the 23 percent small business prime contracting procurement goal for the third consecutive year**, doubled the small disadvantaged business goal,** achieved the highest-ever percentage of contract awards to service-disabled veteran-owned small businesses**,** and met the women-owned small business goal for the first time ever.

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The progress to date has made significant headway in making the acquisition of common goods and services more efficient and reducing duplication and fragmentation in Government purchasing. And by leveraging our posture as the world’s largest buyer, we’ve also been able to send a clear and convincing market signal that we’re committed to achieving our socio-economic goals.

Specifically, by leveraging the Federal Government’s supply chain, we’ve:

• Implemented measures to protect LGBT rights, ensure fair pay and safe workplaces, establish a minimum wage, and prevent human trafficking;
• Championed the inclusion of small businesses in Federal contracting that have allowed us to surpass our small business goals for the past three years; and
• Taken steps to drive sustainable purchasing and strengthen environmental stewardship requirements in Government acquisitions.

I’m personally proud of this work, and we’re not slowing down. The progress we’ve seen to date makes a very strong case for the benefits of category management, and we remain committed to institutionalizing this proven and effective practice so it continues to benefit Americans through the end of the Obama Administration and beyond.

Expect to see lots of activity in the next months to ensure that these transformative efforts continue to deliver results in the years ahead.Anne Rung is the U.S. Chief Acquisition Officer. This post was originally published on the Office of Management and Budget Blog.