What Does a Potential Replacement of the Category Management Circular Mean for Contractors?

December 4, 2017

By Michelle E. Litteken

Approximately one year ago, we submitted comments to the Office of Management and Budget (“OMB”) Proposed OMB Circular No. A-XXX, Implementing Category Management for Common Goods and Services. As explained in a blog post discussing the Proposed Circular, if implemented, the Proposed Circular would dramatically change the way the Government purchases common goods and services. “Common goods and services” are “those items and services that all or most federal agencies procure and are not unique to the mission of an individual agency.” Common goods and services represent a significant portion of Government spending. 
 
The 2016 Circular aimed to create a Government-wide approach to acquiring common goods and services. Specifically, the Government would identify best in class (“BIC”) sourcing solutions for common goods and services, which would be designated as either preferred or mandatory. If a mandatory BIC solution was available, and none of the FAR’s mandatory sources applied, the agency would need to justify its decision to use a source other than the mandatory BIC source. If a preferred BIC source existed, the agency may have been required to explain why it was not using the BIC source. 

The 2016 Circular raised concerns within the contracting community, particular small businesses. Recently, the Office of Federal Procurement Policy (“OFPP”) issued a draft memo to agencies seeking comment on BIC contracts and demand management. This indicates that the Administration is reconsidering the 2016 Circular, which would have been a powerful mechanism to implement category management across the Government. However, a move to replace the 2016 Circular does not necessarily mean that the Trump Administration is backing away from category management. Indeed, earlier this month, the Acting Administrator of the OFPP said that the OFPP identified 29 BIC vehicles, suggesting that the Administration is not abandoning the BIC concept. Around the same time, the General Services Administration announced that the category management policy focused on mobile devices and services had led to savings of $553 million over a two-year period. And, industry observers have noted that the Administration’s moves towards shared services and consolidating requirements align with category management.   
 
It appears that the Trump Administration is continuing to assess category management and develop its procurement policies. Although the current Administration may take a different approach than the prior administration, it appears that category management, in some form, will continue. Given the number of procurements and the proportion of federal spending that may be affected, this is an issue to which contractors should be attuned. We will continue to monitor this issue and advocate for the small business community. 

About the author: Michelle Litteken is an associate with PilieroMazza in the Government Contracting and Litigation law groups. She may be reached at mlitteken@pilieromazza.com.



 
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