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By Nick Wakeman

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Nick Wakeman

Category management means vendors should shift their strategies

The General Services Administration is in the midst of several major initiatives that are designed to streamline acquisition processes for government buyers, help agencies adapt to emerging technologies and, above all, lower costs.

Speakers at Washington Technology GSA Industry Day on Wednesday hit these themes repeatedly whether they were talking about cloud computing, cybersecurity, X-as-a-service or commodity hardware buys.

Some of the initiatives include the recent Salesforce BPA and ongoing efforts to consolidate PC and laptop purchases to comply with Office of Management and Budget guidance. Other initiatives are focused on dropping the two-year corporate requirement to pave the way for more small businesses to enter the market.

GSA also is in the midst of creating a special item number for health IT on Schedule 70. They also are working on changing existing SINs that deal with cybersecurity and information assurance.

All of these initiatives will require vendors to adapt their selling practices. Arching over these initiatives is category management, the government's effort to gain a better understanding of how and what it buys. GSA is leading much of the category management efforts.

As Kay Ely, director of the Office of IT Schedule Programs, described it, category management has GSA looking across government and examining how they are buying, what they are paying and how they can become more efficient consumers. And, of course, a major component is leveraging the government’s buying power.

All of that should sound familiar. The Office of Federal Procurement Policy put out a memo on it in December 2014 describing category management.

But Ely and a later speaker, Chris Fornecker, also spoke about how industry needs to look at category management and how it should influence their approach to the market.

Ely said that only one of the 10 categories in category management is IT, but she recommended that IT companies pay attention to the other nine.

As a reminder the 10 categories are:

  • IT
  • Professional Services
  • Security and Protection
  • Facilities and Construction
  • Industrial Products and Services
  • Office Management
  • Transportation and Logistics Services
  • Travel and Lodging
  • Human Capital
  • Medical.

Many companies bring a contract vehicle approach to the market in that they have a vehicle and convince customers to buy through it. What they should be doing is looking at the categories and seeing how they can help their government customers address those needs.

Ely recommended that companies look at their lines of business and see how they match up with the 10 categories.

The government is trying to become subject matter experts in these areas so they can buy them more efficiently and more economically, she said.

Ely said it would be smart for companies to get to know the category managers at their agencies because it will help them anticipate where the agency is headed and better address specific needs.

Another theme that was repeated often was the need for data, especially information about the prices agencies are paying for technology.

They want to know about pricing trends, how prices are set and what is a fair price.

ESRI willing shared that information with GSA as it negotiated changes to its geospatial schedule, including leveraging the government’s buying power to lower prices. The benefit to ESRI, according to Giovanni Onwuchekwa, branch chief of programs and analysis, who worked with the company, was a streamlined process and lower administrative costs for its schedule.

While the GSA officials were coy about saying where they will next apply this approach, more of these kinds of deals are coming, they said.

The best advice is to study category management and understand FITARA, which is driving many of these requirements.

Since many of these initiatives are driven by a law, they are more likely to outlive a change in administration next year. The name may change from category management to something else, but it looks like the initiatives themselves have long legs.

Posted by Nick Wakeman on Feb 10, 2016 at 9:26 AM

Reader Comments

Fri, May 6, 2016 Prof. Samuel D. Bornstein

There should nbe a note of caution as GSA moves forward with Category Management. Note the following Survey on FITARA: Survey: Feds worry FITARA will hurt more than it helps http://www.federaltimes.com/story/government/it/management/2016/02/22/fitara-hurt-more-than-help/80751294/

Thu, Feb 11, 2016 Prof. Samuel D. Bornstein Union, NJ

Unfortunately, the worst part of Category Management is hidden in the "Spend Under Management - Tiered Maturity Model" which presents the specific attributes of Category Management. The "Strategy" mentions the plan to make Mandatory the new agency-specific solutions awarded after September 30, 2016 which are approved by the Government-wide Category Manager and meets Strategic Sourcing principles. It is clear that Category Management continues the application of Federal Strategic Sourcing (FSSI) in a new acquisition vehicle. It should be noted that the basic precept of FSSI is to award government contracts to a select few while decimating the vast majority of small business vendors. Just ask the GSA Schedule 75-Office Supplies small business community where FSSI BPAs were awarded to ONLY 15 vendors while leaving the remaining 500+ vendors with the loss of government business. For FYE ending 9/30/15 the 15 awarded FSSI winners had nearly 30 percent of the Office Supplies purchases.

Thu, Feb 11, 2016

Kay is generally articulate but she needs some help in articulating this. (Historically, one does not look to GSA for expertise in segmenting the Federal or any of the supplier markets). GSA, if it wants industry to market and sell and deliver in these buckets, needs to grapple with the multidimensional crosscuts more definitively.

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