Acquisition Tips & Tools #54: Category Management

Issue Date: October 31, 2017

Maybe you have heard the term Category Management before and wondered what it was all about? This month’s Tips and Tools we are going to briefly explain what Category Management is, why you may be hearing even more about it, and remind you AQD is here to help.

Category Management is an approach that has been widely used by industry and other governments for decades. Category Management is a systematic, disciplined approach to managing a product category as a strategic business unit . The federal government is applying Category Management, with support of the Office of Management and Budget, to buy smarter and more like a single enterprise. This approach involves better buying and managing the federal government’s vast goods and services which can lead to big savings, better efficiencies and improved performance.

The federal government has identified 10 “super categories” of spending that share information, develop purchasing strategies, and collaborate across government to find the best value for the items it needs. Each category team is led by a government expert in the category, who is focused on maximizing performance. The 10 government-wide categories are:

Category

Facilities and Construction

Human Capital

Industrial Products and Services

Information Technology (IT)

Medical

Office Management

Professional Services

Security and Protection

Transportation and Logistics

Travel and Lodging

Ongoing performance management is critical to ensuring the long-term success of Category Management. So each category will undergo an annual review, which will assess the performance of the category from the previous year and set goals and targets for the coming year. The five performance indicators for improving government procurement through Category Management are:

  1.  Increase Spend Under Management (SUM) of government contracts - Spend on contracts that meet defined criteria for management maturity and data sharing.
  2. Increase Savings - Demonstrated by either the government paying less for goods and services or receiving more goods and services for the same expenditure.
  3. Contract Reduction - Reduction in the total number of unique contracts against the baseline of FY15, calculated by comparing year-to-date numbers against prior year using FPDS-NG entries.
  4. Increase Small Business Utilization - Small businesses’ share of federal spend. It measures utilization, in terms of spend, of small businesses across the government.
  5. Increase Usage of the Acquisition Gateway - The sum of visits to the Category Management online platform, Acquisition Gateway, in addition to purposeful visits.
 The federal government is the single largest buyer in the world with annual spending on goods and services close to $450B a year. That means the more federal agencies work together to leverage their buying power, drive more consistent practices across agencies, share information, and reduce duplication, the better the results for the American taxpayers. Therefore, you can expect to see more emphasis on Category Management and its related components in the coming months and years in an effort to improve federal procurement and save taxpayer dollars. In addition, AQD is here to assist you with your mission requirements and help find Category Management solutions that are right for you.
Remember these Tips and Tools are for you.  If you have any questions about the acquisition process, please contact your Contracting Officer.  Have a topic you want covered in the future? We want to hear it! Submit an email to aqdawareness@ibc.doi.gov or call us at 703-964-8800.