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Tag: Office of Management and Budget

GSA is about to get really big

The head of GSA’s Federal Acquisition Service told employees Thursday that the agency will manage about $400 billion in procurement under an expansion set to quadruple the size of GSA. (Next GOV/FCW March 20, 2025)

A new executive order shifts some agencies’ contracting work to GSA, which already plays a key role in government procurement. President Trump reportedly signed the order Thursday, though the text remains unavailable, and the White House has not commented. (ibid)

“We will ingest all domestic and commercial goods and services into GSA. While we won’t handle all $900 billion, we will manage about $400 billion, effectively quadrupling our size,” said Josh Gruenbaum, head of GSA’s Federal Acquisition Service. (ibid)

GSA has already piloted onboarding two to three agencies to evaluate centralized procurement. The Office of Management and Budget is currently onboarding, along with the Office of Personnel Management, which recently laid off its entire procurement team. (ibid)

“We now have a mobilized operational process to absorb procurement across the government,” Gruenbaum said. GSA plans to automate procurement and integrate talent from the agencies it will serve. (ibid)

GSA operates the schedules program, allowing agencies to buy various services and goods, and oversees several major governmentwide contract vehicles. It also serves as the government’s landlord and develops procurement strategies such as category management and best-in-class contracts.(ibid)

GSA’s acting leader, Stephen Ehikian, highlighted potential cost savings by purchasing as “one buyer on behalf of the government.”(ibid)

As GSA expands procurement operations, it continues downsizing its workforce, eliminating entire offices. Last week, the agency cut the Technology Transformation Services’ talent division and market development and partnerships division while offering Voluntary Early Retirement and Voluntary Separation Incentive Payments. So far, contracting officers remain largely unaffected.(ibid)

Employees who remain will utilize a new AI bot, recently demoed. GSA announced plans to offer the tool to other federal agencies. Ehikian has prioritized AI to reduce headcount, tasking some employees with identifying how AI can take over their work. (ibid)

The AI tool includes a chat function and an API, with plans for continuous improvements based on staff feedback. Ehikian described this as part of the agency’s “build back phase” after its “slimming down phase,” emphasizing efficiency. A meeting slide deck outlined goals such as reducing IT systems per job, centralizing data, optimizing cloud spending, and investing in shared services. (ibid)

Next week, GSA will unveil a major FedRAMP program overhaul, according to Nextgov/FCW. (ibid)

GSA also continues efforts to shrink the federal real estate footprint. Ehikian reported that the agency canceled nearly 700 leases but acknowledged instances where it reinstated leases after receiving feedback from senators and stakeholders. (ibid)

Trying to make sense of all of the new changes at GSA, give us a call.

OMB Issues First Governmentwide AI Acquisition Policy

The Office of Management and Budget (OMB) released new guidance today to improve how Federal agencies acquire artificial intelligence (AI) technologies. The guidance, outlined in the memo Advancing the Responsible Acquisition of AI in Government, directs agencies to boost cross-functional collaboration, manage AI risks and performance, and foster a competitive AI market. (MeriTalk October 3, 2024)

OMB’s Deputy Director for Management, Jason Miller, emphasized the need for responsible AI procurement, stating that Federal agencies will either have AI systems built by contractors or purchase them directly. “This new memo equips agencies with the tools to capture AI’s potential while managing its risks,” Miller said. (ibid)

A large portion of the memo focuses on managing AI risks, with OMB mandating early involvement from agency privacy officials in AI acquisition processes to identify privacy risks and ensure legal compliance. Agencies are also instructed to negotiate contracts that require vendors to provide detailed information for evaluating AI systems, assessing risks, and protecting government data. (ibid)

The guidance addresses generative AI specifically, calling for testing, red-teaming, and evaluation to ensure the safety and appropriateness of AI tools. It also promotes practices to avoid vendor lock-in, prioritize transparency, and ensure interoperability in AI systems. (ibid)

This guidance fulfills a key part of the Biden-Harris administration’s October 2023 AI executive order and reflects input gathered from public comments and industry roundtables. OMB’s Miller highlighted the Federal government’s significant purchasing power, noting that in 2023, it spent over $100 billion on IT products and services. He stressed that responsible procurement decisions can accelerate AI advancements while mitigating risks for government use. (ibid)

Questions concerning the new OMB issued AI guidance? Give us a call.

Federal Government reaching even higher for Small Disadvantaged Businesses

Last year, small disadvantaged businesses received over 11% of federal contracting dollars. Now, the federal government aims to reach 13%. (Next Gov/FCW October 26, 2023)

The Office of Management and Budget recently issued a memo directing federal agencies to target awarding 13% of their contract spending to small disadvantaged businesses in fiscal year 2024. This objective aligns with a broader target set by an executive order earlier this year, which calls for the government to ultimately allocate 15% of federal procurement dollars to such businesses in fiscal year 2025. (ibid)

The executive order, focused on advancing racial equity and supporting underserved communities through federal government initiatives, also instructed the Small Business Administration to establish annual agency-specific goals in collaboration with other departments to further the government’s overall objectives for small disadvantaged businesses. (ibid)

In her October 18, 2023 memo, OMB director Shalanda Young emphasized that utilizing the federal government’s purchasing power to foster economic growth in underserved communities is a central element of the president’s equity agenda. It also aligns with the administration’s broader economic strategy to bolster small businesses and enhance the resilience of the nation’s supply chains. (ibid)

The memo states that federal agencies awarded small disadvantaged businesses a record-breaking $69.9 billion in fiscal year 2022, representing 11.4% of all contracting dollars and an increase of $7.5 billion compared to the previous year. (ibid)

While agencies also set records for spending on programs designed to improve access to contracts for historically underrepresented groups and small businesses in general, they fell short of the goals for the share of contracting dollars awarded to women-owned small businesses and historically underutilized business zone (HUBzone) small businesses, according to SBA data released earlier this year. (ibid)

Young also highlighted the significance of the 8(a) Business Development program at SBA, which serves as a gateway for expanding access to federal contracts for businesses that have faced past discrimination. She emphasized the need for agencies to continue promoting contract access for HUBZone businesses, women-owned small businesses, and service-disabled veteran-owned small businesses, as these often fall under the category of small disadvantaged businesses. (ibid)

In the past, the General Services Administration and SBA announced the establishment of a pool of small disadvantaged businesses in the 8(a) program to facilitate their access to contracts under GSA’s Multiple Award Schedule Program. (ibid)

Moving forward, OMB will collaborate with SBA, the Domestic Policy Council, National Economic Council, and other entities to advance efforts aimed at diversifying the government’s supplier base. This includes the adoption of innovative acquisition practices to reduce transaction costs for small businesses. (ibid)

Are you part of a small disadvantaged business seeking additional business opportunities with the government? Give us a call.

15% Goal for Small Disadvantaged Businesses

When it comes to Diversity, Equity, and Inclusion (DE&I) the Biden administration is making good on its promises. The administration issued an executive order rescinding the Trump administration policies that weakened the diversity, equity, and inclusion training programs at agencies and federal contractors. In addition, the Office of Management and Budget issued a request for information (RFI) searching for DE&I solutions to enhance a number of government activities. (Government Executive May 19, 2021)

This particular RFI appears to be a crowd-sourcing application for policy solutions. It shows that the current administration is very serious about DE&I and their willingness to accept changes and an openness to new and different ways of viewing the inner workings of the government. (ibid)

It appears the administration is looking for better ways to leverage the government’s spending capability. To make sure all receive their fair share and to help close the income, wage, and opportunity gaps. The administration has initiated a 15% goal for federal contract dollars to go to small disadvantaged businesses. Although this looks like a great opportunity it is actually quite hard to measure how many dollars actually funnel through prime contractors to their subs. Figuring out how to measure the dollar flow would be a good start, then putting the 15% goal into effect. Progress is measurable at that point. (ibid)

So where are we today? Can the administration succeed with its DE&I goals? The question becomes, “how do we know?” Steps are clearly headed in the right direction, however, a commitment and a baseline are needed to end up where we want to be.

Are you a small disadvantaged business looking into GSA? Give us a call.

 

New ‘Made in America’ EO

On 25 January, President Biden issued a “Made in All of America by All of America’s Workers” executive order. (Government Executive, February 24, 2021)

Before the executive order takes effect:

  • New rules mandating the executive order must go through the formal rule-making process
  • Within 180 days, the Federal Acquisition Regulatory Council should consider replacing the “component test” (50 percent of a product’s cost must have a domestic origin)
  • The threshold for domestic content requirements for construction materials and end products will be increased, as well price preferences for domestic construction materials and end products

The order directs the FAR Council to assess exceptions from the Act for commercial information technology (IT). Recommendations will likely influence solution strategies. A Made in America office within the Office of Management and Budget (OMB) will be created, which will review waivers to purchase goods from outside the United States. Additionally, the Order mandates a list of actions to be performed within 45 days of the office director’s appointment. (ibid)

Biden’s EO also proposes that GSA create a public website for proposed waivers. Justification for all waivers will be publicly available, giving competitors the ability to weigh-in on waiver requests, likely diminishing the issuance of waivers. Contractors should consider this when determining their sourcing approach. (ibid)

Questions concerning your current as well as future government contracts and how the new order will affect them? Give us a call.