Trump Moves to Consolidate Federal Procurement Under GSA

Recently, President Donald Trump issued Executive Order (EO) 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement. The directive sets in motion an effort to consolidate large areas of federal procurement under the General Services Administration (GSA), including all government-wide acquisition contracts for information technology (IT).

The overarching goal is to eliminate contract duplication, redundancy, and other inefficiencies by consolidating domestic federal government procurement under the GSA, enabling other agencies to focus on their core missions.

The EO applies to all federal agencies, including the Department of Defense (DOD), and pertains to a vast range of products and services, including IT.

Federal Spending on Common Goods and Services

The EO notes that federal agencies spend roughly $490B per year through contracts for “common goods and services,” the types of procurements that GSA was created to perform. “Common goods and services” refers to these ten government-wide categories under the Category Management program, led by the Office of Management and Budget (OMB).

Government-Wide Categories:

• Facilities & Construction
• Human Capital
• Industrial Products and Services
• Information Technology
• Medical
• Office Management
• Professional Services
• Security & Protection
• Transportation & Logistics Services
• Travel

The Category Management program does provide some details of the “common goods and services” that fall under their ten government-wide categories. Over time, GSA has mapped Product Service Codes (PSCs) to the ten Categories.

The $490B figure highlighted in the EO refers to fiscal year (FY) 2024 spending, which breaks out across the ten categories as follows:

Information technology accounted for $82.1B in FY 2024, about 17% of the total.

Agency Action Timeline

The March 20 directive sets out the following deadlines for the OMB, the GSA, and federal agencies:

• April 3: OMB is to issue a memorandum to agencies implementing the designation and rationalization elements coming on April 19 below.
• April 19: OMB is to designate the GSA Administrator as the executive agent for all government-wide acquisition contracts for IT. However, the GSA Administrator is to defer or decline this designation “when necessary to ensure continuity of service or as otherwise appropriate.” 
  • The GSA Administrator is also required to rationalize government-wide indefinite delivery contract vehicles [i.e., GWACs and IDIQs] for IT across the government, on an ongoing basis, to eliminate duplication, redundancy, and other inefficiencies.
• May 19: Agency heads are to submit proposals to have GSA conduct all domestic procurement for common goods and services for their agency.
• June 18: GSA Administrator is to submit a plan to OMB to procure common goods and services across government domestic components.

Observations and Questions Remain

Those who have been around the federal marketplace for a while will recall that over the years, there has been some pendulum swings in the history of GSA acquisitions. There have been periods in the past where the data showed a decline in usage of GSA contract vehicles, and some speculated whether the agency had outlived its mission. There were also periods when the DOD has had policies precluding the use of GSA vehicles for their procurements.

This new EO seeks to push the pendulum to a GSA-dominant side . . . and keep it there. However, the end state may be something closer to the middle. The caveat that the GSA Administrator could defer or decline to assume this executive agent role seems to leave a door open for ongoing use of agency-specific vehicles. It is at least conceivable that certain agency IDIQs could continue indefinitely, but those may be the rare exceptions going forward. And the bar for justification of existence clearly just got higher.

Critical to the success will be GSA’s ability to adapt to its designated dominant role in servicing federal acquisitions for dozens of agencies, and to be able to sustain sufficient levels of service to avoid the competitive pressures that originally led other agencies to pursue their own GWACs in the first place, (e.g., SEWP, CIO-SP, etc.)

Might emerging artificial intelligence (AI) capabilities come into play here? We will see. GSA has already announced plans to significantly reduce its workforce by early May. How this will impact the agency’s expanding acquisition role will take time to unfold.

For now, the EO applies to domestic procurement, i.e., CONUS. We will have to see if the scope expands to OCONUS procurement in the future.

Potential Contractor Implications

Several possible contracting and contractor implications come to mind.

• Delays – The immediate focus on consolidating both the execution of GWACs and the mandated agency plans to move in that direction could potentially delay new solicitations in the short term. Over time, contract rationalization may lead to fewer vehicles, but the scope of those would need to be wide enough to meet agency needs and provide access to the appropriate companies, especially small businesses. Overall, the landscape could become even more competitive, driving price and labor rate sensitivity.
• In-flight GWACs – The EO lands amidst an already active and complex acquisition landscape, as major agency GWACs are in play. SEWP VI is currently in Source Selection and CIO-SP4 is working through protests. It remains to be seen what the future holds on these fronts.
• Contract terminations – Another thing to watch is to see if the contract rationalization effort will drive additional contract terminations that we continue to see coming out of DOGE.
• GSA deferments or declines – If GSA decides to defer or decline to assume the executive agent role for an agency’s IT GWAC, contractors competing for or under that GWAC will likely have the opportunity to support both the agency mission and their contracting office staff. Stay attuned to this possibility.
• Relational impacts – Since contracting is a relational business, company reps may find the need to establish relationships with different federal contracting officers if the consolidation results in the reduction of existing agency contracting personnel. It is conceivable that existing agency contracting officers with deep agency knowledge could move to GSA, helping to ensure procurements meet mission requirements. It may not be a stretch to envision these transferred agency contracting professionals remaining embedded in their agencies to achieve the best of both worlds.

These are just some of the many considerations federal contractors should be watching as this latest White House effort moves forward. In the meantime, contractors should continue to engage with and support their respective agency contracting professionals in a way can help them navigate any sea changes that come.

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