Over the last few years, there has been a lot of talk about the goals of the Obama administration’s category management initiative, particularly around getting agencies to buy as one entity.
The first real demonstration of that concept happened earlier this month when the General Services Administration conducted a reverse auction to set up three blanket purchase agreements for five agencies to potentially buy more than 45,000 laptops and desktops. The customers for this fourth quarter buying event were GSA’s Chief Information Office, the Department of Veterans Affairs, the Defense Health Agency, the U.S. Holocaust Memorial Museum and the Defense Logistics Agency.
“The discounts offered by industry from the GSA schedule price list was an average up to 18.97 percent from the initial eBuy submission,” said a GSA spokeswoman. “Participating agencies provided estimates of future purchases for the fourth quarter buying event. The breakdown of how many laptops versus desktops were purchased will be available once participating agencies place their actual orders against the BPAs that are awarded.”
GSA finalized two of three BPAs on Aug. 17 and is expected to complete the third one later this week.
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Impress Technologies Solutions Inc. will provide Dell computers under one contract, and ABM Federal Sales will provide Hewlett-Packard PCs and laptops on another BPA. GSA’s spokeswoman said the agency will publish all final prices on GSA Advantage later this week as well.
“This is a great example of category management at work — government and industry worked together and we saved over $6 million,” the GSA spokeswoman said. “By purchasing one of the items, you could save up to 27 percent from the GSA standard pricing. Of course the actual savings are going to vary from item to item.”
This is the first time the government has bought laptops and desktops this way. It stems directly from the Office of Management and Budget’s October 2015 memo mandating agencies use one of three contracts — GSA’s IT schedule, NASA’s SEWP and the National Institute of Health’s Chief Information Officer — Commodities and Solutions (CIO-CS)— to buy these items.
OMB said its research found agencies awarded more than 10,000 contracts for laptops and desktops in 2014 worth more than $1.1 billion. OMB said this resulted “in reduced buying power, inefficient duplication of contracts, and very little transparency into prices paid.” The Workstation Category Team (WCT), led by NASA under the category management initiative, found 80 percent of all desktops or laptops agencies bought could be met through five standard configurations.
For this first-time event, GSA worked with NIH and NASA to come up with six standard configurations and this new process.
“The Global Strategic Sourcing (GSS) team collected configurations, terms and conditions, and prices paid from more than 24 agencies’ enterprise or governmentwide contracts and used that information to develop the six standard laptop/desktop configurations and get average pricing,” the GSA spokeswoman said. “GSA used the quantity estimates for the configurations and original equipment manufacturers (OEMs) to solicit proposals from small business resellers. In order to participate, resellers had to be able to provide all six standard configurations as a first step. Vendors deemed ‘technically acceptable’ had the opportunity to submit pricing for the configurations during an Aug. 3 GSA-conducted reverse auction.”
GSA, NASA and NIH also are reaching out to vendors and agencies alike to discuss this new process and expectations. GSA is offering six education sessions, which started Aug. 4 and lasts until Sept. 13.
The laptop and desktop memo was the first of five memos OMB issues during fiscal 2016 to further implement category management.
Mary Davie, GSA’s assistant commissioner for Office of Integrated Technology Services in GSA’s Federal Acquisition Service and the IT category manager, said at a recent event held by AFFIRM that OMB soon will expect agencies to prove how they are meeting these requirements.
She said the Office of Federal Procurement Policy has launched a dashboard to hold agencies accountable to meet the goals in the category management memos.
“The three memos that have come out in IT, there are a lot of asks in there, and a lot of requirements of agencies, a lot of requirements on the teams. We’ve cut a whole list of what all of those things are, who has to do what by when and OMB is starting to dashboard that and track it,” Davie said. “It’s not just a compliance piece, but it’s looking at the spend. It’s looking at now that we know people are buying off the three [laptop/desktop] contracts, we have a lot of spend going to them, what prices are they paying for those six standard configurations? How much spend is going where and why is it going there?”
Davie said she expects to continue to expand the goals and initiatives under the IT category, which agencies spend about $50 billion a year on.
“It’s not just about savings or spend under management or getting better pricing, but what are the other things we can do to make acquisition better and really get that mission outcome improved for government,” Davie said. “While I have the three sub-teams working, I’m also trying to put in place an IT leadership group and working to identify what agencies and agency representatives would be right for that group, how would they help govern the subcategories and what other things we would be tackling in the future, and all along setting goals and priorities, collecting data where we can, putting new agreements in place where it makes sense, or in some cases, using existing governmentwide agreements.”
She said a team from civilian and the Defense Department are looking at what the next generation of the Federal Strategic Sourcing Initiative for wireless devices and services. The current contract has been in place now for about three years.
“What we are doing now is backing up and saying ‘let’s look at the entire category of IT and where are the opportunities?’” Davie said. “All the categories are looking at the supplier relationship. We have been conducting our one-on-ones and trying to understand how government can be a better buyer, a better customer.”
The fact that GSA coordinated with agencies to make a large buy is a huge change for the government. For decades, agencies acted as single entities and vendors had to sell and fulfill acquisitions that way. The long-time approach invariably impacted the price the government paid and the terms and conditions.
GSA, OFPP, the customer agencies, and others rightly deserve kudos for coming together and finally putting some real action behind so much potential and talk that has been going on for years.