WHAT DOES THE NEW “BETTER BUYING INITIATIVE MEAN FOR CONTRACTORS?

Leveraging data across federal agencies to drive lower prices and better terms, negotiating common enterprise-wide software licenses;  reducing waste in government contracts, and enhancing value from sole source contracts are the four main pillars of the Better Buying Initiative (BBI)  announced by the Office of Management and Budget last week. The effort may call to mind the old standard “I’ve Heard That Song Before” from experienced contractors, as many BBI elements are already in use by GSA and other buying agencies, while others have been tried before.  While leveraging data to drive lower prices is a good objective, it’s hardly new.  GSA has been trying to do this for several years now with its own contracts and, to some extent, via the creation of the Acquisition Gateway.  Similarly, driving down software acquisition costs by implementing enterprise-wide licenses seems to be a lot like the Smart Buy program, originally launched during the George H.W. Bush administration.  The success of each of these first two initiatives depends not so much on using new technology to drive the intended outcomes, though that is clearly what the Administration is hoping, but really at having myriad government agencies with differing missions suddenly fall into line and buy the same, non-customized solutions across all of government.  That’s an outcome that technology alone can’t drive.  While it may seem like agencies buy a lot of common items, the fact is that each one likes a solution done “just their way” to meet their specific need.  Timing and quantity are two other factors that drive pricing.  Instant information, for example, is available to stock buyers, but the difference in price between buying 100 shares of American Airlines at 9:00 am and 100 shares at 2:00 pm rests not on technology, but on the market conditions in place at the time each order was placed.  GSA will be tasked in carrying out the “Son of Smart Buy” project and will play a key role in implementing the other pillars as well.  Contractors should anticipate further downward pricing pressure and be prepared to show why detached, although well-intended, policies that come from OMB officials with little actual government procurement experience, may not deliver the anticipated results.