Federal Buying Power:

OMB Can Further Advance Category Management Initiative by Focusing on Requirements, Data, and Training

GAO-21-40: Published: Nov 30, 2020. Publicly Released: Nov 30, 2020.

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DiNapoliT@gao.gov

 

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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.

Photo of a uniformed member of the Air Force working with land mobile radios

Additional Materials:

Contact:

Timothy Dinapoli
(202) 512-4841
DiNapoliT@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

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

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

Office of Management and Budget's (OMB) Category Management Guidance and Metrics

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

Office of Management and Budget's (OMB) Category Management Guidance and Metrics

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.

What GAO Recommends

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.

For more information, contact Timothy DiNapoli at (202) 512-4841 or DiNapoliT@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director of the Office of Management and Budget should report cost savings from the category management initiative by agency. (Recommendation 5)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  6. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  7. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  8. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  9. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  10. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: 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)

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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