The Biden-Harris administration unveiled a new plan on Wednesday that aims to generate contract savings while improving the performance of Federal contracts, including those for common enterprise-wide software licenses.
The Better Contracting Initiative (BCI) unveiled on Nov. 8 looks to ensure the Federal government is getting better deals when purchasing goods and services. The White House expects the initiative will generate over $10 billion annually in savings and cost avoidance.
“While Federal agencies have unique needs and purchase highly-customized items, such as fighter jets and space telescopes, most of the goods and services purchased by agencies are common commercial items that most agencies use – such as IT hardware and software, facilities maintenance, and package delivery services,” the White House said in a fact sheet.
The BCI includes a plan in which the General Services Administration (GSA) will lead the government in negotiating a government-wide IT software license agreement with a large software provider. The software provider was not named in the White House’s announcement.
This is critical to cost savings as the Federal government already spends over $70 billion on IT products and services annually, and as the fact sheet points out, prices often vary up to 20 percent for the same software across agencies.
“This change will help to reduce price variance, secure more favorable terms and conditions, and capture 25 percent in efficiency gains, avoiding the wasted effort of having each agency individually plan, research and negotiate for the same common requirement,” the White House said.
“Agencies will also continue to leverage best-in-class enterprise contracts for a wide range common goods and services, consistent with practices that grow small business participation in the Federal marketplace and strengthen diversity and resilience,” it added.
Other Cost-Saving Efforts Under BCI
In addition to looking for cost savings in software licenses, the White House is also planning to leverage data sharing across Federal agencies to get better prices and terms.
By sharing acquisition and pricing points across government, the Biden administration hopes to arm contracting officials with information that can help them better negotiate with contractors.
“Under the BCI, the Office of Management Budget is launching a new centralized data management strategy, which will create a Hi-definition framework for sharing and analyzing acquisition data across the Federal enterprise,” the White House said. “Improved data-sharing will strengthen acquisition in many ways from enhanced market and supply chain intelligence, to more realistic cost estimates and better solicitations.”
Specifically, the fact sheet says that the Biden administration plans to soon roll out a new tool that will provide contracting officers with access to product pricing data derived from Federal sales and commercial benchmarks.
The tool will also have useful information on vendors and contracts, so that agencies can “confidently identify a best value solution for common needs, such as laptops, servers, and office furniture and supplies.”
The BCI is also focused on getting contracts right the first time to avoid costly modifications. The White House is tasking GSA to lead a series of workshops to help agencies better define their contract requirements.
OMB will also issue guidance on a “proven methodology” to identify requirements for high-priority acquisitions.
Finally, the BCI looks to get agencies better value from sole source contracts – where agencies don’t have a variety of vendors to choose from because of the specific products they need to buy.
The White House is encouraging agencies to get a second opinion on these high-risk contracts from independent procurement teams who can review the terms and reduce the risk of inflated prices.
“ITI applauds the Biden administration’s efforts to drive real reforms for technology procurement through the Better Contracting Initiative, including workstreams to promote smart data management and streamlined contract methods,” said Gordon Bitko, executive vice president for public sector policy at the Information Technology Industry Council (ITI). “U.S. government access to the critical information technologies that drive both the public and private sectors is essential for an effective government, and we appreciate being part of this important dialogue.”
