The Office of Management and Budget (OMB) announced today that the Biden-Harris administration has delivered over $100 billion in savings and cost avoidance through the work of category management – an enterprise-wide approach to Federal contracting that makes the government a more organized, better-informed buyer.
A priority area for the administration’s President Management Agenda was better “managing the business of government.” To further that goal, the administration launched the Better Contracting Initiative, which looks to ensure the Federal government is getting better deals when purchasing goods and services.
“The Biden-Harris Administration’s Better Contracting Initiative strengthens the government’s buying practices to ensure that tens of thousands of contracting officials get better deals on goods and services to deliver on agency missions,” OMB Deputy Director Jason Miller wrote in a Dec. 19 blog post. “At the same time, this effort has supported President Biden’s Made in America initiative, strengthened communities, and promoted the participation of more small-disadvantaged businesses to diversify and build the government’s supplier base.”
While agencies have been using this strategy for several years, OMB said the Biden-Harris administration has taken category management to “new heights” by achieving roughly $60 billion in cost avoidance in the last four years – a feat the agency said is an “historic acceleration in savings and efficiency.”
OMB said that these savings have been reinvested into critical programs, enhancing the delivery of public services while reducing taxpayer burdens.
“Category management exemplifies how smart policy and collaboration can drive meaningful change, ensuring the government operates more effectively and responsibly,” Miller wrote. “It’s a win for everyone, especially taxpayers.”
Over the past four years, OMB said it bolstered category management and realized over half of the cost avoidance through the use of Best-in-Class (BIC) solutions.
BIC is an esteemed contracting and acquisition designation used to denote contracts that meet rigorous category management performance criteria.
According to OMB, agencies have directed over 12 percent – a record amount – of their spending on common products like laptops and building materials to BIC solutions and, at the same time, further increased their cost avoidance by gaining access to bulk discounts, improving procurement efficiency, and helping the environment.
OMB provided examples of how BIC solutions and adopting category management have made a big impact.
The governmentwide IT category works in tandem with the IT Vendor Management Office, collaborating with buyers from across the Federal government to identify and solve common manufacturer-specific challenges on technology procurements. The IT category’s ongoing collaboration with agencies recently has contributed to its growth in small-business utilization: more than 40 percent in fiscal year 2024 and $3 billion in cost avoidance through use of its 16 BICs.
One new tool, the Procurement Co-Pilot, allows Federal procurement officers to conduct market research using real-time data on the government’s prices paid, helping them make more informed purchasing decisions. It’s already being used by over 6,000 acquisition professionals across the government, OMB touted.
“The Biden-Harris Administration has been committed to a government that delivers for the American people, which requires that we have the right goods and services to best serve the public – and we have made notable progress in doing so in a way that saves taxpayer dollars,” Miller wrote. “So, the next time you hear about the government buying smarter, faster, and more sustainably for the future, know that category management is behind it.”
