The Federal Information Technology Acquisition Reform Act (FITARA) directed federal agencies to buy and manage commercial software in more coordinated ways. To assist with that mandate, the Government Services Agency (GSA) introduced a new approach to procurement called ‘category management.’
Essentially a frequent-buyer program, category management incentivizes GSA customers to fully leverage the government’s buying power. By incorporating category management as a strategic procurement initiative, agencies stand to reap tremendous benefits. Here are a few:
Reduced Spend from Discounts
Category management contract vehicles are pre-negotiated and already up-and-running. In addition to standard GSA discounts, they include additional discounts based on the customer’s spend each calendar year. The discounts are tiered, so federal customers that plan ahead and band purchases together will realize the greatest overall savings. Customers will benefit most by taking this centralized approach to procurement, rather than spreading purchases for the same products over many different contract vehicles.
Quicker Purchasing Cycles
Category management contracts can reduce spend, but customers also care more about getting the solutions they need quickly. To that end, category management enables end users to get an entire suite of products quickly and efficiently. Instead of waiting months and months, this vehicle is designed to deliver products quickly.
A typical procurement cycle involves gathering and evaluating responses to bid proposals. The process can be time-consuming, particularly when set-aside requirements are involved. The category management vehicle is pre-negotiated, so the prime contractor can proactively find multiple partners to compete for bids, including set-aside partners.
Better Tracking and Compliance
Another benefit to the category management approach is improved tracking and reporting. When customers band purchases together, they necessarily have a better overall idea of how, when and where agencies are spending their dollars. By pooling purchases of the same software together, federal expenditures go further, because customers know exactly how much they’ve spent and how close they are to the next discount threshold. In this way, centralized tracking allows for better strategic planning, increased efficiencies, compliance with set-aside requirements, and greater value for end users.
To learn more about category management for federal customers and success strategies, click here.>