Recently, Daniel Gordon, administrator of the Office of Federal Procurement Policy, said in a memo to government acquisition executives, “Government agencies should reduce the number of contracts they use to buy goods and services from businesses to take better advantage of the government’s buying power. ” He also stated, “The government could get better value with the more than $500 billion it spends on contracts each year by eliminating duplicative contracts. ”This policy has forced agencies to explain why they need to create or renew certain types of contracts with values of at least $50 million.
Change is nothing new in our industry. For many of us, it is a constant reminder that the government is always trying to improve their processes and save money. IDIQs have been around for years and anyone that has worked a few proposals has heard the term and the horror stories that remain in the wake of a company working one. IDIQs are like a distant rich relative – we want the spoils that they can bring but do not want to deal with the hardships that must be endured.
Recently, Daniel Gordon, administrator of the Office of Federal Procurement Policy, said in a memo to government acquisition executives, “Government agencies should reduce the number of contracts they use to buy goods and services from businesses to take better advantage of the government’s buying power.” He also stated, “The government could get better value with the more than $500 billion it spends on contracts each year by eliminating duplicative contracts.”
This policy has forced agencies to explain why they need to create or renew certain types of contracts with values of at least $50 million. In addition, Procurement officials have to share information about proposed new contracts with their peers at other agencies. This requirement is aimed at increasing inter-agency purchasing cooperation. The Office of Management and Budget (OMB) believes that agency spending for many commonly used items are fragmented across multiple departments, programs, and components. The OMB believes this fragmentation wastes time and energy and causes the government to pay higher prices than necessary.
How has this policy affected us? Contracts are slow or not releasing, or they are being combined from multiple contracts. We are also seeing new agencies using current IDIQs that they have never tried to use before. Who would have believed two years ago that the Marine Corps or the State Department would bid task orders on NASA SEWP IV.
The OMB’s goal with this policy is to reduce the number of large contracts awarded by individual agency components and to narrow the customer base that overlaps existing interagency contract. The OMB will also reduce the total number of contracts, including small contracts, meaning that it will become more important to both get on to the IDIQs that are being released or rebid and to win individual task or delivery orders. Competition is expected to increase in the future, and it is important that you understand the IDIQ and task order procurement process inside and out.
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