Echoing the Obama Administration’s Better Buying Initiative, the Biden Administration announced the Better Contracting Initiative (“BCI”), a four-pronged initiative designed to ensure the Federal Government gets better, and more consistent, terms and prices when purchasing commercial goods and services, while enhancing support for small and disadvantaged businesses. The Initiative’s four prongs include:
1. Leveraging Data Across Federal Agencies to Get Lower Prices and Better Terms.
Under the BCI, the Office of Management and Budget (“OMB”) will launch a new, centralized data management strategy and tools to allow for greater sharing of price data and information on vendors and contracts across agencies within the Federal Government. According to the fact sheet accompanying the announcement of the BCI, this sharing of information will not only result in better value solutions, but will also advance equity by allowing Federal procurement officials to focus their searches on information that could support decisions to use a small business set-aside. One of the assumptions underlying the need for more information is OMB’s assertion that “contractors [are] operating at historically high margins.”
The BCI’s call for collecting and centrally managing commercial procurement data echoes the transactional data reporting (“TDR”) approach adopted under the General Services Administration (“GSA”) Multiple Award Schedules program. The Biden Administration presumably hopes that the BCI will drive greater savings and more pricing consistency, consistent with the sort of benefits that GSA reported after implementing TDR.
2. Negotiating Common Enterprise-Wide Software Licenses.
According to the fact sheet, “prices routinely vary up to 20 percent for the same software across agencies.” Under the BCI, GSA will negotiate Government-wide IT software license agreements with a large (but unnamed) software provider. The fact sheet anticipates that these Government-wide IT software licenses will reduce the price variance in software procurement, secure more favorable terms and conditions, and save time across the Federal Government by obviating the need for each agency to plan, research, and procure the same software solutions. Beyond software, Federal Agencies will retain the ability to leverage best-in-class enterprise contracts for common goods and services, consistent with efforts that grow small business participation and supply chain diversity.
3. Saving Money and Avoiding Waste by Getting Contract Requirements Right the First Time.
OMB will issue guidance that directs Federal agencies to use a proven methodology to pinpoint requirements for high priority professional services acquisitions. The fact sheet noted that “contracts often don’t clearly reflect the agencies’ needs, resulting in expensive modifications.” In an attempt to mitigate those costs, GSA will sponsor a series of facilitated requirements development and acquisition planning workshops for service contracts with acquisition teams across the Federal Government. GSA will also help train government procurement personnel to facilitate similar workshops at their own agencies.
4. Getting Better Value from Sole Source and Other High-Risk Contracts.
Select civilian agencies that have significant sole-source contracting or priority programs with underperforming contracts will engage with specialized teams of cost and engineering experts to participate in inter-agency peer reviews to bring down what OMB describes as inflated prices. Agencies will also be able to leverage “hybrid” contracts for appropriate acquisitions. “Hybrid” contracts allow for multiple types of payment (e.g., cost-reimbursement, labor-hour, fixed-price) to better align with levels of risk during different parts of the lifecycle of a large acquisition for development and production. The fact sheet cites to efforts by the Department of Defense to institute “peer reviews where independent procurement teams review terms to deliver a second opinion and leveraging special teams of cost and engineering experts like the “Navy ‘Price Fighters,’ to reduce the risk of inflated prices” as examples of strategies that have reduced costs.
As a result of these efforts, the Administration estimates that the BCI will generate more $10B in annual savings and cost avoidance while improving the performance of Federal contracts. As with many such initiatives, whether those expectations are realistic will depend upon the accuracy of the Administration’s assumptions, details of the Initiative’s implementation, and the response(s) of the marketplace.