Tuesday, March 24, 2015

OFPP's Plan to Reform Federal Contracting

We picked up this story last week from the Federal Times.

It's a fairly long article so you should probably read it fully if you want to understand the grist of OFPP's (Office of Federal Procurement Policy) vision. Briefly stated, OFPP wants to "stovepipe" procurement, that is, centralize procurement across all agencies by categories of spending - information technology, professional services, construction, medical, etc. These categories of spending will be managed by dedicated executives whose job it will be to:

  • smooth out pricing variability
  • analyze spending data to optimize procurement strategies (whatever that means)
  • culling duplicative contracts
  • negotiating better deals based on overall government-wide demand
OFPP claims this concept - category management - is widely used in industry and in the UK. It helps ensure that agencies get the same competitive price and quality of performance, it frees up agency acquisition personnel to focus on complex agency specific procurements, and it give vendors one place to go and one person accountable for shaping the strategic direction of that one common category.

Each category will be headed up by a senior official (either from industry or the government) who is known to be an expert in that category. That manager would be able to understand buying trends, what drives cost, new innovations coming, and emerging companies.

To begin, the administration is focusing on 10 categories. By the end of fiscal year 2016, the government will have collected critical contract data for the $275 billion spent in those 10 categories and "tens of thousands of acquisition workers" will be able to access that data to make better decisions.

Sounds good. Will it reduce costs? Stay tuned.

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