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Revolutionizing Federal Buying: The Push for “Smart, Aggressive Consolidation”
The way the U.S. federal government acquires goods and services is undergoing a significant transformation. Driven by executive orders and directives, the aim is to eliminate waste and save taxpayer dollars through a strategy of “smart, aggressive consolidation” in federal procurement.
The President has highlighted that the federal government, being the world’s largest buyer, often procures common goods and services in an “uncoordinated and less economical fashion” across multiple agencies. To address this, an executive order titled “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement” was issued on March 20, 2025, directing the consolidation of domestic federal procurement within the General Services Administration (GSA). GSA is recognized as the agency designed to conduct procurement, and this move is intended to allow agencies to focus on their core missions. As part of this, GSA was designated as the executive agent for all government-wide contracts for information technology (IT).
Recently, the Office of Management and Budget (OMB) issued guidance on July 18, 2025, to support this consolidation effort. This guidance builds upon the foundation of “category management,” a strategy formalized during President Trump’s first term in Memorandum M-19-13. Category management helps the federal government leverage its massive buying power by treating common needs, such as IT or professional services, as organized “common spend” categories. This approach has already yielded substantial results, with nearly $100 billion in cumulative savings since its implementation, and an anticipated $10 billion in continued annual savings. For instance, GSA projects that its consolidated acquisition of Microsoft Office 365 services alone could save $100 million per year. Despite these successes, OMB notes that less than 20 percent of common spend currently goes through GSA.
The new OMB guidance outlines two primary “workstreams” to further increase savings and efficiency:
- Increased Use of Centralized Contracts:
- A significant change is coming to the Federal Acquisition Regulation (FAR). Currently, agencies are encouraged to use existing government-wide contracts. However, the FAR will be amended to requireagencies to use an existing government-wide contract for commercial products or services that meet their needs, unless a specific exception is granted.
- Category managers are tasked with identifying additional common spend areas suitable for greater consolidation, potentially leading to new government-wide contracts or mandated use of existing ones across the federal government.
- This strategy includes managing “best-in-class” (BIC) contracts for both highly standardized needs (like basic laptop computers or mail delivery services) and more complex requirements (such as network infrastructure), allowing agencies to negotiate customized terms where necessary.
- Centralization of Procurement Functions in GSA:
- This workstream focuses on transitioning procurement functions for common spend to GSA, especially for requirements that GSA can more effectively negotiate and manage.
- Before such a transition, OMB and GSA will assess suitability, considering GSA’s resources (personnel, technology, finances), potential cost efficiencies, risk mitigation, and plans for monitoring performance and ensuring agency satisfaction.
- If GSA isn’t the best fit for a particular function, agencies are encouraged to consider centralizing procurement within their own operations.
The federal government is prioritizing consolidation for requirements that are highly commercialized, easy to standardize, and do not significantly vary based on an agency’s mission. Requirements that are more complex or mission-specific, needing ongoing program office engagement, will be lower priority.
For contractors, these efforts mean increased scrutiny of standalone contracts and a clear prioritization of existing and new government-wide contracts in common spend categories. The goal is to maximize value for American taxpayers and enhance the efficiency of acquisition activities across the federal government.
Tags: federal procurement, government contracts, GSA, OMB, category management, consolidation, taxpayer savings, efficiency, common spend, Trump administration