Category management questioned

Concerns raised about OMB circular, FAS reorganization

The Obama Administration recently pushed a proposal to make category management an official government policy--but small business advocates are pushing back.

The Office of Federal Procurement Policy issued a circular on Oct. 7 proposing to make category management permanent. In addition, the General Services Administration in recent weeks has reorganized the Federal Acquisition Service to reflect category management needs.

But critics are speaking out. On Nov. 14, Reps. Steve Chabot, R-OH, and Nydia Velazquez, D-NY, chair and ranking member of the House Small Business Committee, released a joint letter criticizing OFPP’s approach and saying more time was needed for public comment.

“We are alarmed that the Office of Federal Procurement Policy continues to move forward with Category Management despite its negative impact on not only small businesses but the agencies which use its contracting vehicles,” their letter stated.

Under the category management concept, contracting officers are required to buy from “Best in Class” contractors in a category, if they have been identified, or to justify why they did not do so. So far, best-in-class contractors have mostly been on large contracts, including NASA’s SEWP and on Schedule 70.

OFPP says such rules could expand to purchases of $270 billion a year.

Small businesses are in these large contracts, but they are generally few in number, raising concerns that many small vendors will lose out.

“Contractors who do not hold these vehicles will be unable to participate in a large segment of the federal market. This could be particularly problematic for small businesses because there are a limited number of set aside GWACs,” wrote Michelle Litteken, associate with the PilieroMazza PLLC law firm, in a public comment.

Meanwhile, the GSA’s reorganization of FAS for category management and its effect on the Multiple Award Schedules (MAS) are generating questions.

Larry Allen, a small business consultant, said he is very concerned that IT schedules are now more separate from the rest of the schedules.

“We are taking one more step down the path of having different MAS policies depending on what you are selling. That starts to cut into the (MAS) program’s identity, which has been a... hallmark of GSA for decades,” Allen told Federal News Radio.

More Information:
OFPP Circular: http://goo.gl/DIiiPa
House committee letter: http://goo.gl/Ja3aif
Piliero Mazza blog: http://goo.gl/XPN5KF
Larry Allen interview: http://goo.gl/tcTcah

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