Every year, the Federal Government spends almost $450 billion annually to buy basic goods and services like software, office supplies and training services. For years, the Federal Government managed these purchases and price individually across 3,300 procurement units, which resulted in lots of inefficiency, including an average price variance of 300% for certain common purchases and sometimes over a thousand contracts for the same goods or service. That is why, since 2009, the Administration has led efforts to streamline and strengthen the Government’s procurement process through smart buying practices, resulting in nearly $2 billion in savings to date.
To build on these efforts, in 2014, the Administration launched the Category Management initiative to further streamline and manage the Federal Government’s vast goods and services more like a single enterprise – leading to big savings, better efficiencies, and improved performance, including:
To ingrain this progress into how government conducts everyday business, we have established a team of dedicated senior government executives to lead Category Management efforts across agencies and oversee the ten largest areas of Federal procurement, representing more than $270 billion a year in spending. These categories are 1) information technology (IT), 2) medical, 3) transportation, 4) travel and lodging, 5) human capital, 6) professional services, 7) security and protection, 8) facilities and construction, 9) industrial products and services, and 10) office management. Each of these experienced senior leaders—representing the Office of Management and Budget (OMB), U.S. General Services Administration (GSA), Department of Defense, Department of Homeland Security, Department of Veterans Affairs and the Office of Personnel Management—will oversee a “Category Management Center of Excellence” on behalf of the government while working closely with a program management office in GSA.
These individuals have tremendous expertise in the category they manage, and will help us to drive significant efficiencies and savings in their categories. For instance, OMB’s IT Category Manager Kim Luke joins us from Hewlett Packard where he, in his capacity as Vice President of Strategic Growth, managed HP’s federal contracts. Similarly, GSA’s Professional Services Category Executive, Tiffany Hixson, brings more than 25 years of professional experience in the field of acquisition management. Currently the Federal Acquisition Service (FAS) Regional Commissioner for the Northwest Arctic Region of the GSA, Tiffany began her career in Seattle as an intern with the National Oceanic and Atmospheric Administration and rose through the acquisition ranks gaining experience as a contract specialist and procurement analyst before being appointed as the Director for Commerce Acquisition Solutions at the Department of Commerce. Kim and Tiffany will oversee the Professional Services and IT areas of Federal procurement, respectively—together representing nearly $114 billion a year in spending.
They, along with the other category managers, are already hard at work conducting spend analysis, market research, financial and supply chain risk analysis, and using this information to develop strategic plans specific to their category with clear metrics and outcomes. Each team will also work towards a shared set of government-wide metrics and outcomes described in the Cross-Agency Priority (CAP) goal for Category Management, including reducing duplication, meeting small business goals, and driving greater savings. Their work will set the foundation for future category managers and their teams to continue the important work of leveraging the government’s vast buying power. Even a modest 10% savings – similar to what companies have achieved when undertaking category management – will help us to achieve $27 billion in savings annually.
With this leadership team, category management is taking a huge leap forward. In the coming months, I look forward to sharing their successes and new ways to leverage our buying power, drive more consistent practices across our agencies, share information, and reduce duplication, including new category management initiatives focused on software and mobile devices, which, combined with our recent policy on workstations, are designed to generate significant savings.
To learn more about the category managers, please click HERE.
Anne Rung is the U.S Chief Acquisition Officer