General Government: Category Management (2021-06)
The Office of Management and Budget should further its Category Management initiative to improve how agencies buy common goods and services by taking such actions as addressing its data management challenges and establishing additional performance metrics to help save the federal government billions of dollars over the next 5 years, as well as potentially eliminate duplicative contracts.
Year Identified: 2021
Area Number: 6
Area Type: Fragmentation, Overlap & Duplication
5 Total Action(s)
The Director of the Office of Management and Budget should report cost savings from the category management initiative by agency.
The Director of the Office of Management and Budget should report cost savings from the category management initiative by agency.
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. As of January 2022, 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 are also assessing which BIC contracts can provide agency-specific savings reporting and agencies’ capabilities to report non-BIC cost savings to the PMO. In addition, the PMO is developing a process for standardizing how agencies would submit savings data and plans for how to report that information visually. PMO officials plan to integrate new cost savings information into their reporting platform during the second quarter of fiscal year 2022. 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.
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.
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.
The Office of Management and Budget (OMB) agreed with this recommendation and in January 2022 the Government-Wide Category Management PMO documented planned actions to address it. OMB reported that it required federal agencies to provide transactional data readiness assessments to the PMO for fiscal year 2021. However, agencies were able to provide transactional data—which typically includes prices paid and spending data—for just 34 contracts representing $6.9 billion of the roughly $400 billion spent on category management goods and services annually. GAO continues to believe that OMB 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 involving prices paid and spending data, which would enable them to buy more like a single enterprise and save the federal government billions of additional dollars.
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.
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.
The Office of Management and Budget (OMB) agreed with this recommendation and in January 2022 the Government-Wide Category Management PMO documented planned actions to address it. As of January 2022, the annual key performance indicator definition for duplicative contract reduction was updated. Specifically, the PMO is piloting a new methodology for fiscal year 2022, which defines contracts within a single agency, where a vendor has multiple contracts for the same products and services, as duplicative. The measure will be tracked by vendor size to ensure that there are no adverse impacts to small business vendors. These actions may address GAO’s recommendation if there is a clear linkage to the category management annual planning that agencies complete, which includes identifying goods and services that could be serviced by contracts aligned with category management principles. These steps should help OMB avoid overstating the extent to which category management has eliminated potentially duplicative contracts.
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.
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.
The Office of Management and Budget agreed with this recommendation and in January 2022, Government-Wide Category Management PMO officials told GAO they expect to report on the impact of contract reduction to small businesses over different timeframes. Providing reporting that shows the impact of duplicative contract reduction on small businesses for specific periods would likely address GAO’s recommendation. These steps should provide small businesses and policymakers clearer information about category management’s impact on small businesses’ opportunities.
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.
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.
The Office of Management and Budget (OMB) agreed with this recommendation, and in January 2022, the Government-Wide Category Management PMO provided updated plans to revise its key performance indicator maturation plan for fiscal year 2022 to include requirements-related metrics. The Category Management Leadership Council must approve these updates before the new metrics can be shared with GAO. GAO believes these actions may address the recommendation if new metrics related to requirements are identified and included in future agency category management annual plans. 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.
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