Federal Buying Power: OMB Can Further Advance Category Management Initiative by Focusing on Requirements, Data, and Training
Fast Facts
The category management initiative is intended to help federal agencies buy like a single enterprise so they can leverage the government's buying power, save taxpayer dollars, and eliminate duplicative contracts.
We found that the Office of Management and Budget needs to focus more on how agencies define requirements for common products and services. For example, Air Force officials told us they saved money by first analyzing what radio capabilities they truly needed rather than by replacing existing radios under an initiative contract.
We made 10 recommendations, including that OMB increase emphasis on requirements.
An Air Force analysis of its use of land mobile radios found excess inventory and capabilities it was not using. It estimates it saved $194 million by buying only what it needed.
Highlights
What GAO Found
Category management is a government-wide initiative led by the Office of Management and Budget (OMB) that saves the federal government billions of dollars each year by improving how agencies buy common products and services. Defining requirements is a key first step agencies should take to understand what products and services they need before deciding how to buy them. However, OMB has primarily focused on the contracting aspects of the initiative, for example, in its guidance and implementation metrics. Leading practitioners of category management told GAO that agencies could save billions of additional dollars if OMB focused more on how agencies define requirements, which is consistent with GAO's previous findings (see figure).
Office of Management and Budget's (OMB) Category Management Guidance and Metrics
Agency officials told GAO that data challenges—particularly challenges in collecting, analyzing, and sharing data on their spending and the prices they pay—have hindered implementation of the category management initiative. OMB is aware of these government-wide challenges and has directed agencies to take certain steps on their own to address them. However, OMB's Fiscal Year 2020 Action Plan for managing government data states OMB should take a leadership role in addressing government-wide data challenges (see figure).
Office of Management and Budget's (OMB) Approach to Category Management Data Challenges
GAO found small businesses received 30 percent or more of annual category management obligations since 2016, but the number of small business vendors providing common products and services decreased each year, continuing a decade-long trend affecting both small and larger businesses. GAO also found that OMB should improve communication with small businesses by enhancing training for agency personnel responsible for small business matters (see figure).
Office of Management and Budget's (OMB) Category Management Training for Agency Personnel Responsible for Small Business Matters
Why GAO Did This Study
In fiscal year 2019, federal agencies obligated over $350 billion to meet requirements for common products and services, such as medical supplies and computers. Since 2016, OMB has led efforts to improve how agencies buy these products and services through the category management initiative, which directs agencies across the government to buy more like a single enterprise. OMB has reported the federal government has saved $27.3 billion in 3 years through category management.
GAO was asked to assess the initiative. This report assesses the extent to which: (1) OMB has focused on agencies' requirements definition, (2) agencies face challenges analyzing data, and (3) agencies bought common products and services from small businesses.
GAO assessed data for all 28 agencies OMB tracks under the initiative, reviewed category management guidance from four selected agencies (with varying levels of implementation experience), and interviewed a broad range of officials from nine agencies as well as four small business advocacy groups.
Recommendations
GAO is making 10 recommendations to OMB to increase emphasis on requirements, lead efforts to address data challenges, and improve training for small business personnel. OMB concurred with the substance of GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget |
Priority Rec.
The Director of the Office of Management and Budget should emphasize in its overarching category management guidance the importance of effectively defining requirements for common products and services when implementing the category management initiative. (Recommendation 1) |
OMB agreed with the substance of our recommendation. In December 2021, OMB amended its overarching guidance and set clear expectations for Senior Accountable Officials at federal agencies to promote early and effective engagement with key stakeholders, including personnel responsible for defining requirements, to shape category management strategies and acquisition solutions. OMB's updated guidance should help agencies better analyze requirements before making buying decisions under the category management initiative, which was the intent of our recommendation.
|
| Office of Management and Budget | The Director of the Office of Management and Budget should work with the Category Management Leadership Council and the General Services Administration's Category Management Program Management Office, and other appropriate offices, to develop additional tailored training for Senior Accountable Officials and agency personnel who manage requirements for common products and services. (Recommendation 2) |
OMB agreed with the substance of our recommendation, and identified in May 2023 multiple actions taken over the past year to emphasize requirements more in category management training. However, to address this recommendation, OMB should expand its existing plans by pursuing tailored training for requirements personnel.
|
| Office of Management and Budget | The Director of the Office of Management and Budget should account for agencies' training needs, including training needs for personnel who define requirements for common products and services, when setting category management training goals. (Recommendation 3) |
OMB agreed with the substance of our recommendation, and identified in May 2023 actions it plans to take in the coming year, including collecting more detailed information about training plans for requirements personnel. To address this recommendation, OMB should use the information it collects from those activities to inform its training goals.
|
| Office of Management and Budget |
Priority Rec.
The Director of the Office of Management and Budget should ensure that designated Senior Accountable Officials have the authority necessary to hold personnel accountable for defining requirements for common products and services as well as contracting activities. (Recommendation 4) |
OMB agreed with the substance of our recommendation, and provided an update on efforts to address it in May 2023. Of the 28 agencies tracked under the category management initiative, 25 agencies have designated Senior Accountable Officials with authority over requirements personnel. To address this recommendation, OMB should complete actions it plans to take in the coming year to designate Senior Accountable Officials with authority over requirements personnel at the remaining three agencies.
|
| Office of Management and Budget |
Priority Rec.
The Director of the Office of Management and Budget should report cost savings from the category management initiative by agency. (Recommendation 5) |
The Office of Management and Budget (OMB) agreed with this recommendation and in May 2023, the Government-Wide Category Management Program Management Office (PMO) provided an update on planned actions to address it. The annual key performance indicator definition for cost avoidance-reported by OMB as savings-was updated to include savings beyond those calculated when agencies use Best-In-Class (BIC) contracts. Officials were also assessing which BIC contracts could provide agency-specific savings reporting and agencies' capabilities to report non-BIC cost savings to the PMO. In addition, the PMO was developing a process for standardizing how agencies would submit savings data and plans for how to report that information visually. Going forward, PMO officials said they will work to improve cost avoidance data and to report on cost avoidance. These actions may meet the intent of GAO's recommendation if future savings reporting includes agency-specific breakdowns for BIC savings, as well as savings achieved by activities other than using BIC contracts. Reporting on cost savings by agency should increase agencies' support for the initiative by more clearly demonstrating the benefits of category management to key agency leadership. Further, reporting on savings beyond BIC savings will more comprehensively account for the billions of additional dollars in savings that agencies are identifying through the use of non-BIC contracts and other category management activities, which OMB does not currently report on.
|
| Office of Management and Budget |
Priority Rec.
The Director of the Office of Management and Budget should work with the Category Management Leadership Council and the Performance Improvement Council to establish additional performance metrics for the category management initiative that are related to agency requirements. (Recommendation 6) |
The Office of Management and Budget (OMB) agreed with this recommendation, and in March 2023, the Government-Wide Category Management Program Management Office (PMO) explained steps it plans to take to further analyze requirements related data it recently collected from federal agencies. The PMO previously updated the annual agency plan it uses to collect key category management information from agencies to include requirements related information that could be used to identify new requirements-related metrics. GAO believes these actions may address the recommendation if OMB establishes new metrics related to its ongoing requirements assessments. Until OMB establishes requirements-related metrics, agency officials responsible for category management implementation will continue to focus on contracting activities at the expense of activities addressing requirements, and miss opportunities to achieve greater savings and efficiencies.
|
| Office of Management and Budget |
Priority Rec.
The Director of the Office of Management and Budget should, in coordination with the Category Management Leadership Council and the Chief Data Officer Council, establish a strategic plan to coordinate agencies' responses to government-wide data challenges hindering implementation of the category management initiative, including challenges involving prices-paid and spending data. (Recommendation 7) |
OMB agreed with the substance of our recommendation, and in March 2023, the Government-Wide Category Management Program Management Office (PMO) summarized actions previously taken in response to the recommendation. To address this recommendation, OMB should take additional actions, including pursuing a strategic plan for addressing government-wide data challenges.
|
| Office of Management and Budget | The Director of the Office of Management and Budget should work with the General Services Administration's Category Management Program Management Office and other organizations, as appropriate, to develop additional tailored training for Office of Small Disadvantaged Business Utilization personnel that emphasizes information about small business opportunities under the category management initiative. (Recommendation 8) |
OMB agreed with the substance of our recommendation, and in March 2022 the GSA Category Management Program Management Office hosted a training session developed specifically for Office of Small and Disadvantaged Business Utilization (OSDBU) personnel that identifies small business opportunities under the category management initiative, and provided access to this training on a GSA webpage that provides category management information for agency personnel. The new tailored training should improve the quality of information about category management that OSDBU personnel are able to provide to the small business community.
|
| Office of Management and Budget | The Director of the Office of Management and Budget should update its methodology for calculating potentially duplicative contract reductions to strengthen the linkage between category management actions and the number of contracts eliminated. (Recommendation 9) |
The Office of Management and Budget (OMB) agreed with this recommendation and in January 2022 the Government-Wide Category Management Program Management Office (PMO) documented planned actions to address it. Specifically, GSA's Category Management Program Management Office (PMO), which is, among other things, responsible for data management for the initiative, piloted a new methodology in fiscal year 2022 that they believed would be more accurate. However, OMB ultimately decided to eliminate duplicative contract reduction as a key performance metric in fiscal year 2023. The PMO explained this decision was made after determining the key data source for the initiative, the Federal Procurement Data System (FPDS), did not provide enough granularity to produce accurate results using the new methodology. As a result, OMB determined that it would no longer be calculating duplicative contract reduction nor using it as a key performance metric. Our recommendation was made to improve the methodology of, what was at that time, a key performance metric. We would not make the same recommendation today because OMB is no longer calculating duplicative contract reduction, nor using it as a performance metric. Further, OMB has other performance metrics that demonstrate agencies are reducing duplicative contract use, such as the percentage of contract spend-under-management and the extent to which agencies are using best-in-class contracting vehicles. As a result of OMB's decision to eliminate the use of contract duplication as a key performance metric and the availability of other metrics to gauge the extent to which agencies are more strategically managing their use of contracts and contract spending, we closed this recommendation as no longer valid.
|
| Office of Management and Budget | The Director of the Office of Management and Budget should identify the time frames covered by underlying data when reporting on how duplicative contract reductions have impacted small businesses. (Recommendation 10) |
OMB agreed with the substance of our recommendation. In February 2022, the General Services Administration's Category Management Program Management Office that supports OMB with data analysis introduced updates to the publicly available dashboard that informs OMB's reporting on the category management initiative. The updated dashboard now reports duplicative contract reduction by fiscal year, and identifies the percentage of small business contracts eliminated in each fiscal year. The updated dashboard reporting should improve the quality of the information OMB provides to the small business community and policymakers.
|