Biden-Harris Administration Delivers over $100 Billion in Savings and Cost Avoidance to the Federal Government Through Category Management
By Jason Miller, Deputy Director for Management at the Office of Management and Budget
The Biden-Harris Administration has been focused on ensuring that every dollar the Federal Government spends delivers a bang for the buck while strengthening American communities. This has been accomplished through the work of category management – an enterprise-wide approach to Federal contracting that makes the Government a more organized, better-informed buyer. Today, the Office of Management and Budget (OMB) is reflecting on category management as a transformative policy introduced during the Obama-Biden Administration – delivering over $100 billion in savings and cost avoidance since its origination. While agencies have been using this strategy for several years, this Administration has taken category management to new heights by achieving roughly $60 billion in cost avoidance in the last four years – a historic acceleration in savings and efficiency.
This remarkable accomplishment reflects the Administration’s relentless focus on improving contracting practices. The Biden-Harris Administration’s Better Contracting Initiative strengthens the Government’s buying practices to ensure that tens of thousands of contracting officials get better deals on goods and services to deliver on agency missions. At the same time, this effort has supported President Biden’s Made in America initiative, strengthened communities, and promoted the participation of small-disadvantaged businesses to diversify and build the Government’s supplier base.
Category management has redefined efficiency in Government procurement, ensuring the Federal Government is buying as an enterprise. These savings have been reinvested into critical programs, enhancing the delivery of public services while reducing taxpayer burdens. Category management exemplifies how smart policy and collaboration can drive meaningful change, ensuring the government operates more effectively and responsibly. It’s a win for everyone, especially taxpayers.
We bolstered category management and realized over half of the cost avoidance over the past four years through the use of Best-in-Class (BIC) solutions. BIC is an esteemed contracting and acquisition designation used to denote contracts that meet rigorous category management performance criteria. Agencies have directed over 12% – a record amount – of their spending on common products like laptops and building materials to these exemplary solutions and, at the same time, further increased their cost avoidance by gaining access to bulk discounts, improving procurement efficiency, and helping the environment.
Here are just a few examples of how category management BIC solutions and adopting category management have made a big impact:
Buying Generic Pharmaceuticals Smarter with the Joint National Contracts Program
The Government-wide Medical category, led by DOD and VA, worked together to award the Joint National Contracts (JNCs) program, which purchases generic pharmaceuticals, and helps the Federal Government avoid billions in costs annually. The program bolsters Federal Government priorities, and in fiscal year 2024 it yielded more than $6 billion in cost avoidance, with more than 55% of JNC contracts awarded to small businesses.
Government-wide IT Category Increases Small Business Utilization and Earns Returning Customers’ Business
The Government-wide Information Technology (IT) category works in tandem with the IT Vendor Management Office, collaborating with buyers from across the Federal Government to identify and solve common manufacturer-specific challenges on technology procurements. The IT category’s ongoing collaboration with agencies recently has contributed to its growth in small-business utilization – 40.2% so far in fiscal year 2024 and $3 billion in cost avoidance through use of its 16 BICs.
The Veterans Health Administration’s Beneficiary Travel Rideshare Program has been a Win-Win for Veterans and Taxpayers
The Veterans Health Administration’s Beneficiary Travel Rideshare Program has been a big success for veterans and taxpayers alike. Over a nine-month period alone, this program provided more than 417,000 rides to veterans, projected to save the government more than $28 million. The rideshare program has also launched at seven new sites, helping those with mobility issues access critical healthcare services and living up to the Biden-Harris Administration’s sacred obligation to care for our nation’s veterans.
City Pair Program: A Travel Cost-Avoidance Success
The City Pair Program (CPP), managed by GSA, is the largest procurement of negotiated airfares in the world, and is used by most Federal employees for commercial air travel. CPP fares are typically half the price of commercial fares, and offer many benefits, including no exchange fees, fully refundable fares, and no blackout dates. For fiscal year 2025, this BIC solution covers over 14,000 flight markets with an estimated $2.45 billion in cost avoidance.
The Future of Category Management through the Better Contracting Initiative: Using More Data to Improve Results
New initiatives, like the Hi-Def Initiative, are making it even easier to use data to drive smarter decisions. One new tool, the Procurement Co-Pilot, allows Federal procurement officers to conduct market research using real-time data on the government’s prices paid, helping them make more informed purchasing decisions. It’s already being used by over 6,000 acquisition professionals across the Government.
The Biden-Harris Administration has been committed to a Government that delivers for the American people, which requires that we have the right goods and services to best serve the public – and we have made notable progress in doing so in a way that saves taxpayer dollars. This success highlights President Biden’s commitment to smart governance and fiscal responsibility, ensuring public funds are used more effectively than ever before. So, the next time you hear about the Government buying smarter, faster, and more sustainably for the future, know that category management is behind it – thanks in large part to the leadership of this Administration.