CONFUSED ABOUT CATEGORY MANAGEMENT? SO IS CONGRESS

Members of the House Small Business Committee recently wrote to the General Services Administration asking multiple questions about its Category Management initiative with an emphasis on how CM will impact small government contractors. Beyond the usual concern that small firms may be squeezed out, though, are concerns that CM may actually drive prices higher by locking federal agencies into preferred contracts when alternatives exist. One part of the letter, signed by both the Chair and Ranking Member of House Small Business says, “While category management has been billed as the strategy that can get agencies the lowest price, all evidence the committee has seen points to the contrary. In fact, in many cases the multiple award schedule (MAS) contract holders continue to provide lower prices versus those offered by category management contract holders.” While the letter may be mixing CM with strategic sourcing, it essentially acknowledges that daily competition among Schedule contract holders can provide federal agencies with better values than other vehicles. OMB, too, has come under fire over concerns that CM will drive small firms out of the government market. These concerns, coupled with the sun setting on the Obama Administration, cast doubt on whether CM will continue as a management priority once the next President is in office.