On November 8, 2023, the Biden-Harris Administration announced the Better Contracting Initiative (BCI), a four-pronged initiative to ensure that the federal government is getting the best terms and prices when purchasing goods and services. The federal government purchases billions of dollars’ worth of goods and services each year; however, the Administration is concerned that agencies pay inconsistent prices and often more than market price. The BCI strategy is to improve how federal agencies procure innovative technologies and leverage data to make smart buying decisions by utilizing the following four steps as detailed below.
- Leveraging Data Across Agencies to Get Lower Prices and Better Terms
The Office of Management Budget (OMB) is launching a centralized data management strategy to strengthen acquisition and enhance market and supply chain intelligence, by sharing and analyzing acquisition data across the federal enterprise. Data will be provided to agencies through on-demand tools and resources. For example, the Administration will provide a tool populated with centralized product pricing data (e.g., data on federal sales, commercial benchmarks, and information about vendors and contracts), which will allow agencies and contracting professionals to identify market and supply chain intelligence and the best value solution. Notably, this tool will also help “advance equity” by allowing agencies to search information to support a procurement decision on whether to use a small business set-aside either on an existing contract or the open market.
- Negotiating Common Enterprise-Wide Software Licenses
The General Services Administration (GSA) will lead negotiations for a government-wide IT software license agreement with a large software provider. The purpose is to help reduce price variance, receive more favorable terms and conditions, capture 25% in efficiency gains, and avoid cost and time spent researching and negotiating separate individual contracts for the same common requirement.
- Agency Guidance on High Priority Acquisitions
In the following months, OMB will issue guidance for agencies to use proven methodologies to identify high priority acquisitions. In addition, GSA will sponsor a series of workshops on facilitated requirements development and acquisition planning, as well as partner with agencies to train workshop facilitators.
- Getting Better Value from Sole Source and Other High-Risk Contracts
OMB will assist agencies in negotiating good deals in difficult procurements, particularly when agencies may have few vendor options. For example, the Department of Defense has successfully deployed strategies to mitigate risk in such circumstances, including by using peer reviews where procurement teams can obtain opinions on vendors and leverage cost and engineering experts to get better value. Finally, agencies will increasingly use hybrid contract strategies (e.g., combinations of cost reimbursement, firm fixed price, etc.) according to the levels of risk during different parts of the lifecycle of large acquisitions for development and production.
Ultimately, the purpose of this BCI initiative is to gather data and tools to receive better value and improve the performance of Federal contracts, which the Biden-Harris Administration expects will generate $10 billion in annual savings and cost avoidance while improving the performance of federal contracts.