Yesterday, via posting for advance review on the Federal Register Public Inspection Site, the Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB), announced that it has issued a proposed OMB Circular, Implementing Category Management for Common Goods and Services (the Circular).  The intent is to “codify” category management, establishing key principles; strategic policies, roles, and responsibilities; and metrics to measure success.  The proposed Circular will appear in today’s Federal Register for public comment.

The Coalition appreciates OMB’s focus on improving acquisition management and reducing unnecessary contract duplication. Under appropriate circumstances, category management may achieve some efficiencies.  The uncertainty surrounding the effectiveness of category management, however, raises questions regarding the timing of the proposed Circular.  Category management is just over a year old.  It is unclear whether the appropriate metrics for success have been identified and whether those metrics have been tracked and evaluated.  Thus, it remains to be seen whether sufficient and accurate data exists to support the intended codification across government.  Clearly, more study and analysis are appropriate before such a significant step is taken.

To this point, the direct and indirect costs of category management are, to date, not fully understood.  For example, GSA’s transactional data rule, which, among other things, requires contractors to report on eleven categories of transaction information for all sales to the government, has time, program, administrative, and other direct and indirect costs, many of which, appear not to have been tracked and measured. As such, before attempting to “codify” the structures/processes coincident to category management, the government should identify clear, specific program metrics, including the direct and indirect costs of acquisition for the government and contractors, as well as the impact on market participation by vendors.  An evaluation of those metrics against baseline criteria will help gauge the true effectiveness of category management and its future utility.  Without metrics and an associated evaluation, any declaration of savings is premature, at best.  Along these lines, in furtherance of the goal of data-driven decisions, the metrics identified in this process should be grounded in procurement performance and identify clear measures of success.

Finally, an initial review of the proposed Circular highlights the tension between centralization and decentralization of management.  The proposed Circular will establish a highly centralized structure for procurement management operations across government reminiscent of approaches taken over half a century ago. Indeed, it harkens back to the Brooks Act, which centralized IT procurement management authority at GSA, and which was repealed with great deliberation based on agency needs and the best interests of the government.   Significantly, the Circular authorizes management structures and controls that essentially establish OFPP management, oversight, and control of agency procurement operations in furtherance of category management.

It remains to be seen whether executive agency authority to determine specific actions in the award or administration of procurement contracts is preserved in the aftermath.  As stakeholders prepare comments, a focus will be the balance between centralized procurement authority managed by OFPP and procurement authority at the agency level.  It is déjà vu all over again!

The Coalition looks forward to the feedback from our members as we prepare comments in response to the proposed Circular.