Blog
Managing the Business of Government
Challenge
The Federal Government awards over $1.5 trillion in federal contracts and financial assistance each year—and sometimes much more in times of crisis.
This creates an enterprise-level opportunity to lean on federal systems for managing the business of government—the goods and services we buy and the financial assistance and resources we provide and oversee—to create and sustain good quality union jobs, address persistent racial and gender wealth and wage gaps, and address other challenges our nation faces. The Administration has already taken bold action to leverage federal acquisition and financial assistance to take on our most pressing challenges as a country. Accomplishing these ambitious goals and activities collectively will also require continuous improvements in our procurement, financial assistance, and financial management ecosystems. This shift will require new measures and processes, new training for the federal workforce, and new tradeoffs that agencies together will need to address going forward.
Opportunity
We can harness this collective power and make connections across the federal acquisition and financial assistance systems to strengthen the U.S. manufacturing base and support American workers, catalyze new solutions that address the climate crisis and enhance sustainability, and advance equity.
The public will benefit from a government that buys together and manages financial assistance together, devoting attention to how these systems deliver results—prosperity, security, and opportunity—for all people in this country. Federal agencies will look across existing Administration initiatives to ensure that system-wide, continuous improvement in federal acquisition, financial management, and financial assistance systems occurs. This system-wide focus can include, for example: opportunity and issue spotting, including resolution of conflicts across discrete lines of effort; training and guidance for practitioners within agencies; data-management and evidence-building strategies; and other capacity-building strategies.
Leadership
Strategies
Activity
November 2024
Strategy 1: During the performance period, strategy leads continued to advance federal priorities through implementation of federal acquisition efficiency and cost savings activities. This release includes updates on accomplishments related to existing milestones and highlights the collaborative efforts across agencies to enhance contracting processes and outcomes. Key developments include:
- Category Management (CM) is the practice of buying common goods and services as an organized enterprise in order to improve the efficiency and effectiveness of acquisition activities. This means buying like an enterprise to get more value and savings by identifying core areas or categories of spend, using data to consolidate and reduce contracts when possible, better managing suppliers and demand, and reducing the total cost of ownership. The government has realized great success in implementing CM:
- Specifically, the program has avoided over $87 billion cumulatively in costs through Best-in-Class (BIC) solutions, which are select, well-managed CM contracts that have been vetted using strict criteria and are encouraged for use by all federal agencies.
- As of the end of FY 2023, nearly 77% of common spend is aligned to category management principles, including 12.4% of spend through Best-in-Class solutions that provided $14.8 billion in cost avoidance.
- Nearly 100,000 individuals have been trained in CM to date, and the first-ever government-wide CM Credential was launched to expand the acquisition workforce’s CM expertise even further.
- Track all the government-wide and individual agency progress and results on the GWCM Executive Summary Dashboard FY 2024.
- All Chief Financial Officer (CFO) Act agencies have implemented internal guidance that encourages the acquisition workforce to adopt innovative acquisition practices that increase value from contracts, improve customer satisfaction, and increase opportunities for small businesses. Agencies report using innovative practices described on the Periodic table of Acquisition Innovations, such as:
- Remote acquisitions that can reduce procurement administrative lead time as well as decrease vendor bid and proposal costs;
- On-the-spot consensus for more efficient evaluation of vendors;
- Technical demonstrations and code challenges where vendors can showcase their product or system capabilities and engage with customers;
- Interactive oral presentations or live oral demonstrations that allow vendors to demonstrate their technical expertise and avoid costly proposal preparation; and
- Leveraging emerging technologies to modernize procurement operations in ways that increase speed, improve accuracy, reduce administrative cost, and lower risk.
Strategy 2: During this quarter, agencies submitted their plans for FY25 Notice of Funding Opportunity (NOFO) simplification efforts. These plans will result in the simplification of hundreds of NOFOs throughout next year, which will lower the burden for tens of thousands of grant applicants. This will build on NOFO simplification pilots that agencies conducted in FY24, including AmeriCorps’ work to reduce the word count of their AmeriCorps State and National NOFO by one-third and the Department of Transportation’s cutting their Tribal Transit NOFO nearly in half.
Over the past quarter, the grant management competency project group worked with the Office of Personnel Management (OPM) to issue a survey to further validate competencies for job series used by agencies to hire grant managers. OPM is on track to next quarter use those survey results and other information collected to produce a technical report that includes a finalized competency model for grants management specialists.
Highlights
July 2024
Strategy 1, Federal Acquisitions, continued to advance federal priorities related to federal acquisition efficiency, cost savings, and small businesses. This release includes updates on accomplishments related to existing milestones and highlights the collaborative efforts across agencies to implement improvements that enhance contracting processes and outcomes. Key developments include:
- New Milestones Prioritize Category Management: The introduction of new milestones underscores the importance of government-wide category management (GWCM) efforts to advancing the Business of Government. By focusing on strategic planning to achieve GWCM key performance indicators (KPIs), the new milestones will drive efficiency and more effective resource utilization across federal agencies. The new milestones require all CFO Act agencies to submit detailed fiscal year (FY) 2025 category management plans to Office of Management and Budget (OMB) and involve the Category Management Leadership Council to approve all ten FY2025 category strategy plans. Track all the government-wide and individual agency KPIs on the GWCM Executive Summary Dashboard FY 2024.
- Full Rollout of the Procurement Co-Pilot Application for Government Use: We are excited to announce the full rollout of the Procurement Co-Pilot application. This innovative tool, available for federal use only, is designed to improve the efficiency and quality of market research by providing access to government-wide data to enable agencies to make better, more cost-effective acquisition decisions. The Procurement Co-Pilot aggregates over 80 million rows of data, facilitating three key steps in the acquisition lifecycle: product pricing research, vendor search, and contract vehicle identification. Tailored for contract specialists, officers, and agency buyers, this application enhances market research efficiency by providing unprecedented access to pricing information. Read the fact sheet here.
- Increasing Small Business Participation on Multiple Award Contracts. The Small Business Administration (SBA) and the Federal Acquisition Regulatory Council have begun developing new regulations to increase small business participation in multiple-award contracts. While multiple-award contracts help agencies efficiently purchase common items and services, small businesses can face difficulties becoming contract holders on these vehicles. To address this challenge, the Office of Federal Procurement Policy (OFPP) issued guidance earlier this year that includes a variety of strategies to increase consideration of small businesses, including setting-aside orders awarded under multiple award contracts for small businesses if at least two contract holders are capable of meeting the contract requirements, collaborating early with the SBA and agency small-business specialists to identify opportunities to set aside future multiple award contracts exclusively for small businesses or provide small businesses with “on ramps” to gain access to multiple award contracts that include both small and large contract holders, and evaluating whether leveraging small businesses on “best-in-class” contracts would result in expanding the agency’s small business contracting base. These combined efforts help balance the benefits of multiple-award contracts with encouraging more small businesses to participate in federal procurement.
Under Strategy 2, Federal Financial Management, the Council on Federal Financial Assistance (COFFA) continues to advance the deliverables identified in OMB Memorandum M-24-11. Several new project groups have been established to develop tools to help with the implementation of the 2024 Revision to the Uniform Guidance and to drive government-wide simplification of Notices of Funding Opportunities (NOFOs). In addition, several project groups have come to an end as their last deliverable was finalized, including the development of a charter for the COFFA and the release of a public website – www.COFFA.gov. In the upcoming months the COFFA will continue to make progress across the identified year one priorities as the inaugural year comes to an end in September.
Highlights
April 2024
During the performance period, strategy leads continued to advance federal priorities related to federal acquisition efficiency and cost savings. This release highlights the collaborative efforts across agencies to optimize contracting processes and outcomes. This includes sharing successful practices as part of the Better Contracting Initiative, including performance-based contract requirements and cost containment measures for high-risk contracts. Successful practices are featured in the Acquisition Accelerate (AcqCelerate) Savings Challenge, which gathers a diverse range of strategies aimed at enhancing efficiency and driving acquisition cost savings across federal agencies.
The Council on Federal Financial Assistance (COFFA) continues to identify opportunities to reduce agency and recipient burden in order to strengthen accountability and deliver results for the American people. On February 15, 2024 the Federal Program Inventory became available to the public. This website is a new comprehensive, searchable tool with critical information about all domestic Federal financial assistance information. This website makes it easier for potential recipients and applicants to find programs, ensure the effective stewardship of taxpayer funds, and further increase government transparency. On April 4, 2024 OMB released the 2024 Revision to the Uniform Guidance. These revisions promote a culture of improved stewardship of federal funds, equitable access to programs and services, a reduction of administrative burden for federal agencies and recipients of Federal financial assistance, and streamlined and effective oversight and implementation of federal programs. Together, federal agencies will be working to ensure the consistent implementation of the 2024 Revisions with the COFFA leading this coordinated effort. The COFFA announced a whole of government approach to simplify Notices of Funding Opportunities (NOFOs). This effort, identified in M-24-11, will prioritize simplifying NOFOs for programs where the eligible applicants may have limited organizational capacity, particularly those in underserved communities. The COFFA will be working in the upcoming months to develop tools to reduce the complexity and improve the accessibility of NOFOs to further increase access to Federal financial assistance.
Highlights
February 2024
Since its launch in October 2023, the Council on Federal Financial Assistance (COFFA) has convened Senior Financial Assistance Officers monthly and has also hosted community meetings to share relevant topics with the entire Federal financial assistance workforce. During this period, COFFA leadership identified priorities for the next twelve months to support the vision of the Council:
- Creating a partnership among federal grant-making agencies;
- Providing a single forum to inform Federal financial assistance policy, oversight, and technology activities;
- Providing strategic direction, policy recommendations, and priority-setting for other government-wide grant-related activities;
- Reducing administrative burdens for both federal agencies and recipients of Federal financial assistance, particularly those that may be under-resourced or underserved; and
- Advancing the Administration’s priorities to improve customer experience with delivery of services, improve equity, and leverage Federal financial assistance as a catalyst to build back better.
FY24 Q1 period marked the exciting launch of the Better Contracting Initiative (BCI), a significant step in supporting Strategy 1 within the Business of Government Priority Area. The BCI is a comprehensive, four-pronged strategy designed to improve federal government purchasing. It aims to:
- Ensure better terms and prices for goods and services, with a focus on buying from small and disadvantaged businesses.
- Generate over $10 billion annually in savings and cost avoidance while improving the performance of federal contracts.
- Leverage data across federal agencies, negotiating common enterprise-wide software licenses, and
- Getting contract requirements right the first time–all to support a strategic approach in federal acquisition.
A significant step toward negotiating common enterprise-wide software licenses has been the establishment of a government-wide acquisition strategy Interagency Project Team (IPT), tasked with reviewing agency contract files and analyzing pricing data to identify common terms and a strategic pricing approach for discussions with major software vendors in the coming months. Stay tuned to performance.gov for future updates. For more information about BCI, visit OMB’s website here.
Highlights
December 2023
Under Strategy 1, the team on Priority Area 3 is focused on the Federal Government’s national strategy to build public health supply chain resiliency. Office of Management and Budget’s (OMB) Made in America Office (MIAO) and Office of Federal Procurement Policy (OFPP) are collaborating with experts in requirements, acquisition, and supply chain at the Department of Health & Human Services (HHS), the Department of Homeland Security (DHS), and the Department of Veterans Affairs (VA) in the development of a plan to strengthen the long-term health of the domestic Personal Protective Equipment (PPE) industry in furtherance of the Make PPE in America Act. For Strategy 2, the Council on Federal Financial Assistance (COFFA), established by OMB Memorandum M-23-19, convened for its first meeting in October 2023. Together with the Chair OMB and Co-Chair HHS, council members are developing priorities for the COFFA to accomplish within the first year. One of the projects that already commenced is the identification of the core competencies necessary for the financial assistance workforce. This effort will help to identify the knowledge, skills, and abilities necessary for this workforce that are the same at each Federal financial assistance agency. New milestones are presented in this update to communicate progress toward the completion of this project.
Highlights
August 2023
Through this period, strategy leads continued to advance federal priorities through federal acquisition and Federal financial assistance. This release includes updates on accomplishments related to existing milestones and several new planned milestones.
Highlights
May 2023
Strategy leads continued to implement action plans to advance Federal priorities for sustainability and equity through Federal acquisition and Federal financial assistance. In Federal acquisition, this release includes important updates related to priority supply chains and investing in the acquisition workforce. Federal financial assistance leads announce the release of a new training for the financial assistance workforce.
Highlights
March 2023
Cross-agency teams continued to develop and refine their action plans to advance sustainability and equity priorities for the Nation through the Federal acquisition and financial assistance systems. Each strategy has defined initial success metrics and milestones.
Highlights
November 2022
Cross-agency teams have been working to develop and refine action plans to achieve the President’s vision to leverage Federal acquisition and financial assistance systems to advance priorities for the Nation. Each strategy is defining strategy-wide success metrics to measure progress toward achieving their ambitious goals.
Highlights
Efficient Federal Financial Assistance
Strengthen and formalize the governance of Federal financial assistance
The Council on Federal Financial Assistance (COFFA) is working to ensure that federal agencies have the tools they need to deliver Federal financial assistance programs in an efficient, effective, and equitable manner, while also reducing administrative burdens on Federal financial assistance applicants and recipients.
Projects and Milestones
Completed
- Published a website to communicate COFFA priorities and resources.
- The COFFA members established a charter that outlines how the Council is structured and how it operates within the Federal Government.
- Eight agencies committed to piloting several efforts to simplify NOFOs in FY24.
Agency Spotlight
- The Department of Health and Human Services is the first agency co-lead of the Council on Federal Financial Assistance.
Getting “Best in Class” Value
Maximizing Savings and Supporting Sustainability Initiatives
Best-in-Class (BIC) is an OMB designation that identifies select, well-managed contracts that have been vetted using strict criteria and are encouraged for use by all Federal agencies. These BIC solutions bring value to agency customers, reduce the time and effort needed to find or create a solution, and help agencies leverage volume discounts by maximizing the government’s shared purchasing power.
Measuring BIC obligations is one of the key performance indicators that the government-wide category management initiative uses to track agency maturity and success.
Key program results include:
- CFO Act agencies worked together in fiscal year (FY) 2023 to spend $58.5 billion through BIC solutions.
- BIC spend resulted in $14.8 billion in cost avoidance for agencies in FY 2023 – and $11.6 billion in cost avoidance has already been realized through the first half of FY 2024!
Projects and Milestones
Completed
- Best-In-Class (BIC) solutions are evaluated and, to maximum extent practicable, conform with Administration directives on sustainability requirements.
In progress
- 100% of CFO Act Agencies to submit FY25 Category Management (CM) plans to OMB – including a specific plan to achieve CM Key Performance Indicators of spend under management, spend through Best-in-Class solutions, and CM training in FY25 Q1.
Agency Spotlight
- BIC solutions also contributed to completing one of the President Management Agenda’s milestones. By the end of the third quarter of FY 2024, all 35 BIC solutions met the requirements to be awarded the Sustainability Check designation. This designation, required by OMB and the Office of the Federal Chief Sustainability Officer (CSO), Council on Environmental Quality, recognizes that these BIC solutions have met all FAR sustainability requirements and that they contain sustainable products and services as identified by the Environmental Protection Agency. Agencies using BIC solutions can be reassured that they are also supporting the Administration’s Sustainability priorities.
- The National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP), a longtime BIC solution, provides the latest in IT, communications, and audio-visual products and services for all Federal agencies. SEWP V, the largest government small-business contract, has 80-85% of its year-to-year vehicle volume with its small business contract holders. In FY 2023, 81% of SEWP’s Federal spend went toward small businesses.
- The General Services Administration recently announced the first awardees for One Acquisition Solution for Integrated Services Plus (OASIS+), a new multiple award indefinite-delivery indefinite-quantity, multi-agency contract. This is a follow-on BIC solution that builds off of legacy OASIS’s previous success as a BIC-designated solution under the govt.-wide Professional Services category. Nearly 1,400 small businesses will be awarded OASIS+ contracts across seven domains, maximizing small business participation by removing barriers to entry and helping customer agencies acquire the best professional services solutions to meet their requirements.
Building a Culture of Innovation in Federal Procurement
Innovating Procurement with Agency Labs
At the Department of Commerce and the Department of Homeland Security, acquisition labs serve as hubs of experimentation, where new procurement processes are tested, refined, and shared. Acquisition teams receive coaching and other workforce development support to apply new techniques that streamline acquisition processes, increase competition, and lower barriers to entry for small businesses. This culture of innovation is improving delivery times and product quality, enhancing customer experiences, and driving better mission outcomes.
These labs are helping agencies meet the PMA milestone of adopting at least five innovative acquisition processes from the Periodic Table of Acquisition Innovations (PTAI), including two that are small business-friendly to support a more diverse and resilient federal marketplace.
Projects and Milestones
Completed
- 100% of Chief Financial Officer (CFO) Act agencies have internal agency guidance that adopts or adapts at least five innovative acquisition processes on the Periodic Table of Acquisition Innovations (PTAI), including at least two identified as small business friendly.
Agency Spotlight
- Department of Commerce (DOC) The Lab Established in 2022, the Department of Commerce’s acquisition innovation lab (The Lab) released its first-ever yearly digest July 2024. The Lab Yearly Digest compiles The Lab’s findings and activities since July of 2022, including its success providing formal procurement coaching and promoting innovative acquisition techniques across the Department. The Lab has facilitated projects that resulted in faster awards, increased competition, and more opportunities for small businesses. The digest reflects The Lab’s commitment to fostering a collaborative culture of procurement innovation, enabling the Department to meet its mission with greater efficiency.
- Department of Homeland Security (DHS) Procurement Innovation Lab (PIL) Established in 2015, the DHS Procurement Innovation Lab (PIL) is a pioneer in the federal acquisition space for teams to experiment with innovative procurement techniques. The PIL has supported a variety of projects across DHS and the federal space through lowering barriers to entry, encouraging competition, shortening time to award, and increasing successful outcomes. The PIL’s yearly publication showcases its successes, including the adoption of innovative techniques like advisory down-selects and interactive oral presentations, which have enhanced outcomes for small businesses and non-traditional contractors and significantly streamlined the procurement process for complex contracts consistent with the principles of the Better Contracting Initiative.
