Procurement consolidation under GSA has been all the “buzz” since the release of Executive Order (EO) 14240 last March. Now, OMB has issued Memorandum M-25-1, Consolidating Federal Procurement Activities, to implement elements of the EO.

“The order directs a series of actions to consolidate domestic Federal procurement of common goods and services in the General Services Administration (GSA) to eliminate waste and duplication while enabling agencies to focus on their core mission of delivering the best possible services for the American people,” according to the document.

The memo focuses on two avenues: centralizing contracts and centralizing procurement functions under GSA.

Priority consolidation will be towards those requirements considered “low hanging fruit,” and includes requirements that are easy to standardize, not unique to agency mission, involve highly commercialized products and services, and produce greatest efficiency and cost savings. On the opposite end, requirements deemed less suitable for consolidation are ones more complex and specialized in mission.

Figure 2 in the memorandum provides a clear picture of how the consolidation of requirements will be decided:

Source: OMB M-25-1

Expanding the Role of Centralized Contracts

The memorandum directs agencies to use existing government-wide contracts vs. creating a new contract in the name of economy and efficiency. This concept isn’t new, though the Revolutionary FAR Overhaul initiative is set to mandate use of government-wide contracts first, whereas the FAR previously only encouraged agencies to do so.

OMB also calls on the Category Management Program Management Office (CM PMO) to review existing common agency spending and make recommendations on additional spend areas outside the 10 categories of management that would be suited for consolidation either through new centralized government-wide contracts or amendments to existing ones. The end goal, according to the memo, is to expand the use of centralized buying through contracts that are “best-in-class” (BIC).

Consolidating Procurement Functions

The memorandum also calls for the transition of procurement functions to GSA, essentially allowing GSA to completely handle other agencies’ purchase of common goods and services. Nonetheless, the OMB memo acknowledges that some requirements may not be suitable for GSA’s centralized acquisition role and lists a set of considerations to evaluate viability of procurement function transitions.

GSA Increase of Responsibilities

Since the release of EO 14240, many in the contractor community have wondered how GSA will handle the added roles and responsibilities as the federal government’s primary buyer. Larry Allen, Associate Administrator of the Office of Government-wide Policy at GSA, addressed this point in a fireside chat a few weeks ago hosted by The Baroni Center for Government Contracting at GMU. When Allen was asked if GSA was poised to eventually get bigger to process the higher volume of transactions, Allen stated that GSA plans to focus on ensuring that the necessary tools and resources are in place in the short term.  For example, emphasis will be placed on how the agency can apply technologies such as artificial intelligence in the acquisition process. Moreover, Allen stated that GSA will also look to update its own back-office IT rather than add a large number of 1102 personnel.

Contractor Implications

While the consolidation of federal procurement activities under GSA will have several implications for contractors, here are a few that are top of mind:

• Fewer Open Market Solicitations. The mandated consolidation of purchase in common goods and services will certainly decrease the number of competitive open market opportunities for contractors. BIC contracts will continue to gain popularity, and contractors must ensure they are well positioned on BIC contracts.  
• New Relationships. Contractors will need to find and establish new relationships with GSA contracting personnel because of the consolidation. A relationship with the direct customer may not suffice among certain requirements.  
• Potential for New Government-Wide Contracts. As stated in the memo, procurement leaders will be analyzing common agency spend areas with the potential to introduce new centralized government-wide contracts.