Strategic Sourcing Evolves into Category Management

By Gloria Larkin

Steve Krauss, Director of the General Services Administration (GSA) Office of Category Management Strategic Execution updated industry on the status of the Category Management Program at the Department of Health and Human Services (HHS) recent “Getting Back 2 Business” Small Business Outreach event held at Towson University in Maryland.
Hundreds of large and small businesses participated in the day long program to educate vendors of the ongoing changes in the federal government marketplace.
The Category Management (CM) Program has evolved from the original Strategic Sourcing Program which seemed to favor large business over small business service and product providers. Mr. Krauss shared that most Fortune 500 companies have adopted category management over the past 20-30 years. He stated “We took a new look at a data-driven marketplace to organize a procurement management process by services and products.” The federal government plans to implement this CM process government-wide to eliminate redundancies, increase efficiencies and deliver more value and savings from the federal government’s acquisition programs.
However, while the previous Strategic Sourcing Program usually pertained to a specific contract and often used large businesses, the new CM program is designed be used for many contracts and to maximize small innovative businesses participation and utilization by increasing market transparency and reducing contract duplication, improving match-making mechanisms and ensuring that participating small businesses are well-qualified.
Mr. Kraus stated “The vison of the CM program is to have agencies expend less energy buying common things so they can focus more on buying for their mission. The $445 billion federal government purchasing landscape is fragmented and many agencies make similar purchases without a coordinating strategy which result in costly redundancies in contract vehicles, buys and efforts.”
The future state of government-wide CM purchasing is based on one common management framework to buy like a business but where industry is also involved in developing category strategies ultimately minimizing contract duplication and confusion with the ultimate goals of saving time and money for both government and business.
The GSA Category Management Program has developed ten categories for both services and products including: facilities and construction, professional services, information technology, medical, industrial services and products, transportation and logistics, security and protection, human capital, travel and finally, office management. Each category has a specific small business strategy and assigned personnel to manage the small business participation.
An example of CM in progress is the consolidation under the GSA’s Professional Services Schedule of over 4,400 GSA Schedule professional services contracts to eliminate 700 duplicative contracts saving the government $3.95 million in contract management costs. Mr. Krauss stated that this consolidation is designed to also reduce costs for vendors who should have been able to cut the number of contracts to manage themselves without losing any labor categories or contract opportunities.
One of the most innovative CM tools being developed is a vendor finder process that will mine data from the System for Award Management (SAM), the Dynamic Small Business Database (DSBS) and the Federal Procurement Data System (FPDS) to quickly locate small businesses that have past performance, capacity and up-to-date registrations. This tool is intended to benefit small business with improved visibility to opportunities, transparent contract participation standards and an “always-open” market. This tool is now available for anyone to see at GSA’s Acquisition Gateway at hallways.cap.gsa.gov where one can search for the initial industry of security guard services. More industries are expected to be added in the future.
This Acquisition Gateway is expected to serve as a hub of intelligence and communication for both small business and small business advocates throughout the federal contracting community.
As the discussion on the CM program wrapped up, Mr. Krauss discussed the Small Business Playbook which is a plan to use an evidence-based approach to maximizing small business opportunities while applying a unified strategy, standard activities and best practices. He identified four elements or chapters which include: Improve market analysis and research designed to highlight qualified businesses and eliminate unqualified businesses; structure contracts to include small business zones where supported by market analysis; explore ways to bring in new small businesses such as through a service-disabled veteran-owned small business on-ramp; and removing non-performing businesses and large businesses who do not meet small business subcontracting requirements.
While the intent of the CM program is to ultimately improve efficiency and reduce cost to the government, it will be critical for small businesses to stay informed of the development of the processes, tools, analyses and requirements incorporated into this program, especially if it is adopted government-wide as anticipated by Mr. Krauss.

Gloria Larkin is Founder and CEO of TargetGov and a national expert in business development in the government markets. Email glorialarkin@targetgov.com, visit www.targetgov.com or call toll-free 1-866-579-1346 for more information.

One thought on “Strategic Sourcing Evolves into Category Management

  1. Outstanding recap. Strongly concur that maintaining oversight of the program is critical to small business concerns.

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