Category Management is at a Crossroads Under New Administration

Category management is currently the biggest effort being undertaken to reform and improve federal procurement around commonly purchased categories of goods and services. Launched during the Obama administration, category management is an adaptation of a system that was first implemented with success in the United Kingdom. The General Services Administration has been working on building up category management capabilities since 2014, but it was chiefly in the last year that it started to gain traction and take off. The program appears to be at a critical stage, with supporters and opponents both seeing the opportunity to either expand or squash the future of federal category management.

How Category Management Can Help
The idea of category management as GSA describes it, is to pool to the purchasing power of the entire federal government to achieve the best value on commonly bought goods and services. Not only is this working to negotiate a best possible price for all government buyers, but it is also developing a best practices strategy for many different kinds of purchases that contracting officers from any agency can use to guide their acquisitions. Category management is made up of many sub-initiatives, including transactional data reporting, strategic sourcing, and the use of category hallways. For government buyers, this push towards a shared knowledge and purchasing power base has the potential to dramatically increase the efficiency and value in federal contracting.

Concerns About Category Management
The end goals of category management look fairly good for the government, but there are concerns being raised by industry and policy leaders. Among the sub-programs, the transactional data rules have a ways to go to gain the full support of the industry, which sees it as a way to drive prices to their lowest possible point with little consideration for other factors involving contracting. Additionally, the end goal of category management is to funnel acquisitions towards a set of best practices and purchasing options. The risk some critics raise, however, is that this could result in relatively few suppliers in each category receiving the bulk of contracts and that this could hurt small businesses industrial base since it would potentially limit rather than expand opportunities for them to compete .

What Does The Future Hold?
As with many policy initiatives under a new administration, it is not clear how category management will play into federal priorities going forward. There is considerable debate in the policy community right now with some claiming that category management will expand since it is in line with the savings promised by the Trump administration for government purchasing. Others point to the fact that several memorandums on category management have been placed on months’ long hold, meaning the program will likely morph into something different under new leadership. 

Regardless, the idea of pooling purchasing power is here to stay, whether at the agency level or in some form government wide. Industry and policy leaders should learn as much as they can about the current state of category management, so they are prepared for whatever directions it may go in next.

Author: Jake Jedlicka, Senior External Relations Specialist

Publisher: FedBid Inc.

Released: March 9, 2017