Category Management, 69860-69871 [2016-24054]

Download as PDF 69860 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices Signed at Washington, DC, on October 4, 2016. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health. [FR Doc. 2016–24320 Filed 10–6–16; 8:45 am] BILLING CODE 4510–26–P OFFICE OF MANAGEMENT AND BUDGET Office of Federal Procurement Policy Category Management Office of Federal Procurement Policy, Office of Management and Budget. ACTION: Proposed new Office of Management and Budget Circular No. A–XXX, ‘‘Implementing Category Management for Common Goods and Services.’’ AGENCY: The Office of Federal Procurement Policy (OFPP) in the Office of Management and Budget (OMB) is proposing to issue a new OMB Circular, Implementing Category Management for Common Goods and Services, to codify category management, a strategic practice where Federal contracting for common goods and services is managed by categories of spending across the Government and supported by teams of experts. The Circular establishes key principles, and strategies and policies, roles and responsibilities, and metrics to measure success. DATES: Interested parties should submit comments in writing to the address below on or before November 7, 2016. ADDRESSES: Comments may be submitted by any of the following methods: Online at http:// www.regulations.gov, Facsimile: 202– 395–5105, Mail: Darbi Dillon, Office of Federal Procurement Policy, 1800 G Street NW., Washington, DC 20006. Instructions: Please submit comments only and cite ‘‘Proposed New OMB Circular A-xxx’’ in all correspondence. All comments received will be posted, without change or redaction, to www.regulations.gov, so commenters should not include information that they do not wish to be posted (for example because they consider it personal or business confidential). FOR FURTHER INFORMATION CONTACT: Darbi Dillon, Office of Federal Procurement Policy, 1800 G Street NW., Washington, DC 20006, at 202–395– 1008. mstockstill on DSK3G9T082PROD with NOTICES SUMMARY: Category management is an effective business practice for reducing duplication in SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 contracting, better leveraging the government’s buying power, and promoting the use of best in class solutions government-wide. Historically, the vast majority of common agency needs—such as for information technology, professional services, medical supplies, human capital, security and protection, and transportation and logistics—have been acquired in a disaggregated manner resulting in a sub-optimization of the Government’s buying power and diminished Federal Government’s market profile. Category management provides a pathway for agencies to move away from managing purchases and prices individually across thousands of procurement units and towards managing entire categories of common spend with collaborative decisionmaking. As a result, institutionalizing category management as the principal way in which all Executive Branch agencies acquire and manage the roughly $270B in annual spending on common goods and services will help taxpayers realize better value from their acquisition investments in every day needs and, equally important, allow contracting offices to give greater attention to their agency’s mission critical acquisitions. For more than a decade, the Office of Management and Budget (OMB) has worked with agencies on governmentwide initiatives to promote strategic sourcing—i.e., the collaborative and structured process of critically analyzing an organization’s spending and using this information to make business decisions about acquiring commodities and services more effectively and efficiently. These efforts have evolved and matured as OMB has formalized the requirements for strategic sourcing development, governance, and oversight. Since 2010, strategic sourcing efforts have helped agencies save more than $500 million by reducing unit prices, applying effective demand management strategies, and avoiding duplicative administrative costs. While these accomplishments are impactful and will continue, a broader organizational vision is needed to accelerate and successfully manage the many dimensions of interagency collaboration that must occur for the federal government to buy as one. In December 2014, the Office of Federal Procurement Policy (OFPP) announced category management as the new broader model for organizing how the Federal Government manages the acquisition of commonly acquired goods and services. The memo outlined a series of specific actions to enable the identification of best in class vehicles PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 within each common spending area as well as opportunities to change inefficient consumption patterns. The Category Management Leadership Council (CMLC), comprised of the largest buying agencies, divided the government’s common spending into 10 categories and assisted OMB in appointing recognized market experts to serve as category managers. Noteworthy progress has already been made in breaking down agency silos and acting as the world’s largest buyer. For example, in the Information Technology category 45% of spend on workstations has been directed to three identified best in class solutions with a goal to reduce the number of contracts for workstations by 20% by the end of fiscal year 2016. Furthermore, governmentwide buying events for laptops and desktops resulted in more than 15% savings on average. In addition, consistent with the direction in the Federal Information Technology Acquisition Reform Act, two new government-wide software agreements were established to increase agency use of enterprise license agreements and help agencies move away from the tens of thousands of agreements that have been traditionally negotiated to meet these needs. This proposed OMB Circular brings together and builds on these efforts and expands upon their concepts of economy and efficiency by establishing category management as the principal way in which the government acquires and manages its common requirements. The circular addresses (1) key principles, (2) strategies and policies, (3) governance structures, and (4) metrics to measure success. Of particular note, the proposed Circular would: Establish a government-wide approach to acquiring common goods and services. The proposed Circular would be applicable to all Executive Agencies with Chief Financial Officer (CFO) Act agencies and those represented on the CMLC having additional responsibilities. Recognizing the unique characteristics and requirements of each agency, all Executive Branch Agencies would be required to promote, to the fullest extent possible, maximum adoption of the category management principles, strategies and requirements. Emphasize the potential to achieve greater economy and efficiency across the Federal Government by implementing the category management key principles. The proposed Circular focuses on collaboration and coordinated management of the common goods and services in the E:\FR\FM\07OCN1.SGM 07OCN1 mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices development of requirements and use of best in class vehicles and practices, reduction of duplicate contract vehicles, improved mission value and total cost of ownership, and strengthened demand management practices, while advancing Federal policy objectives, such as inclusion of small business, competition, and strengthening sustainability, and improving supplier relationships. Define the strategies and policies agencies would follow to execute category management. The proposed Circular establishes the practice of using existing contracting sourcing solutions prior to executing new contracts, with a priority given to mandatory sources as defined in the Federal Acquisition Regulation, and then category management best in class contract sourcing solutions, distinguishing between ‘best in class preferred’ and ‘best in class mandatory’ contract sourcing solutions. The proposal institutes policies to seek and share information and to monitor and measure progress of category management using defined core metrics. Outline the governance, and roles and responsibilities for all of the key players and stakeholders. The proposed Circular institutionalizes the CMLC, chaired by the OFPP Administrator, as the governing body, and further defines roles and responsibilities for the General Services Administration, the government-wide and agency-level category managers, the lead agencies for each category (Centers of Excellence), the Chief Financial Officer Act Agencies, and other stakeholders critical to the success of category management. Stress the importance of data analytics and information sharing— outlining the criticality of the Acquisition Gateway as a key enabler in this process. The proposed Circular designates the Acquisition Gateway as the central repository for data and information necessary to support the execution of category management. Identify the core metrics by which category management success will be measured with an emphasis on Spend under Management. The proposed Circular establishes core metrics against which the government’s category management success will be measured: Increasing savings, reducing duplication, increasing spend under management, achieving small business goals, and other relevant measures that may be identified in the future. These metrics will help to ensure that Government’s continued commitment to maximizing opportunities for small VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 business contractors and strengthened sustainability and accessibility. Anne E. Rung, Administrator for Federal Procurement Policy. Circular No. A–XXX To the Heads of Executive Departments and Establishments Subject: Implementing Category Management for Common Goods and Services 1. Purpose. This Circular establishes Category Management (CM) as the principal way in which all Executive Branch agencies must acquire and manage common goods and services 1 spend to drive greater economy and efficiency. Agencies must use the CM principles and practices articulated in this Circular to reduce duplication, better leverage the government’s buying power, and promote the use of effective, best in class solutions. Governmentwide. Agencies designated as Centers of Excellence (CoE) 2 and individuals having supporting roles in the implementation of CM must manage their responsibilities in accordance with this Circular. 2. Authority. This Circular is issued pursuant to 31 U.S.C. 1111, the OFPP Act, 41 U.S.C. 1121 et seq.; the ClingerCohen Act, 40 U.S.C. 11101, et seq.; the Federal Information Technology Acquisition Reform Act (Title VIII, Subtitle D of the National Defense Authorization Act for FY 2015, Pub. L. 113–291, §§ 833, 836); the National Defense Authorization Act for FY 2009 (Pub. L. 110–417, § 865(b)(2)), and Government Performance and Results Modernization Act of 2010 (Pub. L. 111– 352). 3. Applicability. This policy is applicable to all Executive Agencies.3 All Executive Agencies must have a CM program in place that promotes maximum adoption of the key principles, strategies and requirements of CM described below. Chief Financial Officer (CFO) Act agencies 4 and those represented on the Category Management Leadership Council (CMLC) have additional responsibilities, 1 Common goods and services refer to those items and services that all or most federal agencies procure and are not unique to the mission of an individual agency. These goods and services are interchangeable between agencies and are generally available commercially. 2 The CoE is the lead agency or organization for each category or sub-category, which, due to its subject matter expertise, experience, and other category unique qualifications, retains the Government-wide CMX for level 1 categories, or level 2 and lower subcategory leads. 3 Executive agency is defined in 41 U.S.C. 133. 4 Agencies listed in 31 U.S.C. 901(b)(1) and (b)(2). PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 69861 as enumerated in sections 9–12 of this Circular. 4. Rescission. This Circular rescinds and replaces Office of Management and Budget (OMB) Memorandum M–13–02, Improving Acquisition through Strategic Sourcing, dated December 5, 2012; and OMB Memorandum, Implementing Strategic Sourcing, dated May 20, 2005.5 5. Background. The Office of Federal Procurement Policy (OFPP) is responsible for promoting economy, efficiency, and effectiveness in the Federal acquisition process,6 and regularly implements policies and initiatives to better leverage Government’s buying power to ensure taxpayer dollars are spent efficiently and effectively. For example, in 2005, OMB formally launched strategic sourcing—an acquisition approach focused on aggregating demand—and expanded it in 2012, as a Governmentwide initiative focused on reducing unit pricing and total life cycle management costs for common needs. On 29 September 2011, OFPP issued OMB Memo, Development, Review and Approval of Business Cases for Certain Interagency and Agency-Specific Acquisitions, directing Agencies to develop business cases for certain types of awards to reduce contract duplication. In December 2014, OFPP released ‘‘Transforming the Marketplace: Simplifying Federal Procurement to Improve Performance, Drive Innovation, and Increase Savings,’’ 7 which cites a critical need for the Federal Government to fundamentally shift away from managing purchases and evaluating prices individually across thousands of procurement units to more directly managing entire categories of common spend in order to deliver better value— a strategy known as Category Management. This Circular brings together these earlier policies and expands upon their concepts of economy and efficiency to establish the key principles, strategies, policies, processes, governance structure, and roles and responsibilities to implement CM fully as the principal 5 OMB Memo M–13–02, Improving Acquisition through Strategic Sourcing, December 5, 2012, https://www.whitehouse.gov/sites/default/files/ omb/memoranda/2013/m-13-02_0.pdf and OMB Memorandum, Implementing Strategic Sourcing, dated May 20, 2005, https://www.whitehouse.gov/ sites/default/files/omb/assets/omb/procurement/ comp_src/implementing_strategic_sourcing.pdf; established and evolved the framework and governance for Strategic Sourcing. 6 The OFPP Act, 41 U.S.C. 1101(b)(2). 7 OFPP Memo, ‘‘Transforming the Marketplace: Simplifying Federal Procurement to Improve Performance, Drive Innovation, and Increase Savings,’’ December 4, 2014. E:\FR\FM\07OCN1.SGM 07OCN1 69862 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices Attachment 1, the ten core (Level 1) categories are shown below. The acquisition and management of requirements in these ten CM categories are subject to this Circular. This Circular does not address unique, agency/ mission-specific requirements determined by the appropriate agency leadership to fall outside the scope of this directive. OMB category-specific policies (CM policies) will include instructions for making these determinations, as category strategies are developed (see section 8(a) below). The CMLC will approve significant changes to the scope, leadership, or definition of the core categories (to include adding, deleting, or restructuring categories) and update the categories as needed. The most current list is available on the Acquisition Gateway.8 7. Key Principles. CM applies the following key principles to acquire and manage an organization’s common requirements in a more collaborative and coordinated way: a. Development of requirements that address the majority of common enduser needs through the use of data analytics, application of best in class practices, and understanding of both industry and end-user customer need; b. reduction in number of duplicate contract vehicles for the same, or similar, requirements; c. improvement of mission value and total cost of ownership through activities like better requirements definition, demand aggregation to reduce unit pricing where appropriate, improved asset management, and greater visibility of pricing, usage, and performance data; d. strengthened demand management practices to reduce inefficient buying; e. advancement of statutory, regulatory, and Federal policy objectives, such as increasing the use of small business, competition, strengthening sustainability and accessibility requirements, maximizing the use of procurement preference programs, and supporting other policies required by statute and the Federal Acquisition Regulation (FAR); and f. improved supplier relationship management. 8. Strategies and Policies. Each approved level 1 core category of common goods and services will be led by an expert government-wide Category Manager (CMX) (see section 9 below) who will be responsible for developing strategies to drive Government-wide economy and efficiency in that area. Examples of strategies include, but are not limited to, strategic sourcing, demand management, vendor management and total cost management. The strategy, or combination of strategies, selected by the CMX will vary depending on the type of good or service, the market trends in that category, the Government’s current and future demand, and the maturity level of the specific category. The CMLC must approve all category strategies. In addition, the CMX will continually review and refine strategies, as necessary, informed by experience and feedback from government customers, contractors, industry experts and other interested stakeholders. a. Best in class solutions. CMXs shall use the strategic planning process to identify best in class (BIC) sourcing solutions, which may involve contract solutions, demand management strategies or both. (1) BIC contract sourcing solution. (a) A BIC contract sourcing solution is one that: (i) Has been developed by crossfunctional teams using rigorous requirements definition and planning processes; (ii) enables customers to take advantage of effective pricing strategies; (iii) follows category management principles (outlined in section 7), including data driven demand management practices; and (iv) has had its performance independently validated. (b) To help the workforce understand the intended use of the contract sourcing solution, the CMX shall assign each one of the following two designations: (i) BIC preferred contract sourcing solution—This designation is designed to encourage, but not compel, agency use of an identified contract solution. The CMX must assign this designation to a BIC solution except where OMB has determined, after considering the recommendations of the CMX and CMLC, that mandatory use of the solution is more appropriate and in the best interest of the government. The CMX may require agencies to provide information and analysis, such as comparisons of pricing, terms and condition, or vendor performance, to explain when they do not use a BIC 8 The current Government-wide Category Structure is accessible via the following link: https://hallways.cap.gsa.gov/faq, ‘‘Where can I learn more about the government’s plan to adopt category management?’’ VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1 EN07OC16.000</GPH> mstockstill on DSK3G9T082PROD with NOTICES way in which the government acquires and manages its common requirements. 6. Common Categories of Goods and Services. Based on fiscal year 2015 data from the Federal Procurement Data System, agencies spent over $270 billion—over half of all federal contract spending—on common requirements like information technology (IT) hardware, office supplies, and other basic needs. As further detailed in mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices preferred solution. This information can help to ensure active agency consideration of the preferred solution. The CMX must post instructions for the submission of any requested information or analysis on the Acquisition Gateway. The CMX should use the input received from agencies to inform future data analytics and strategic planning, with the goal of improving the solution, where appropriate, to be more responsive to customer needs, and to determine whether the solution may be suitable to serve as a mandatory solution. (ii) BIC mandatory contract sourcing solution—This designation is designed to support a Government-wide migration to a solution that is mature and market-proven, such as a previously designated BIC preferred sourcing solution with a demonstrated record of success. This designation must be approved by OMB. In addition, OMB will issue appropriate management policy that explains the agency migration process to the mandatory solution and provides an exception process for agencies to justify deviations from the mandatory policy. (c) To reduce contract duplication and take advantage of existing BIC contract sourcing solutions, agencies must take the following steps: (i) After first considering required sources of supplies and services, which are set forth in FAR 8.002 and FAR 8.003, and determining such sources do not satisfy their requirements, agencies must review information on the Acquisition Gateway to determine if there are BIC preferred or BIC mandatory contract sourcing solutions to address their requirements. (ii) If the requirement may be met by a mandatory BIC contract sourcing solution, agencies must review the applicable OMB management policy and follow the migration process or, if necessary, exception process to justify deviations from the policy. (iii) If the requirement may be met by a preferred BIC contract sourcing solution, the agency must determine if any information or analysis is required where the agency does not plan to use the preferred solution and follow the instructions provided by the CMX on the Gateway for submitting the analysis. (iv) If there are no BIC solutions identified on the Gateway, and the agency is seeking to establish a Government-wide, multi-agency or agency-wide vehicles, the agency must follow any policy OMB has issued to address the establishment of business cases. (d) To support the use of BIC contract sourcing solutions, and to facilitate VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 awareness by the acquisition workforce, the GSA Government-wide Program Management Office (PMO) will post information on BIC contract sourcing solutions on the Acquisition Gateway. In addition, the PMO will ensure, to the maximum extent practicable, that information on BIC sourcing solutions is accessible in a consistent and clear manner with a common look and feel that will facilitate easy understanding and application by the acquisition workforce. The PMO will work with the CMLC, OMB, CMXs and other stakeholders to provide templates, as necessary, to support the submission of agency information required in connection with a BIC preferred or mandatory contract sourcing solution. (2) BIC demand management strategy. The CMX must also use the strategic planning process to identify BIC demand management strategies. A BIC demand management strategy is one that standardizes requirements, specifications, or configurations, or eliminates inefficient purchasing and management behaviors using category management principles. The CMX must work with the CMLC and OMB in developing appropriate instructions to support agency adoption of BIC demand management strategies and with the GSA PMO regarding posting of such instructions on the Acquisition Gateway. (3) Other actions. In addition to leveraging existing BIC solutions, agencies must take the following steps to help reduce duplication and promote greater economy, efficiency and effectiveness. (a) Seek data and information— Contracting officers, program managers, and other acquisition officials must routinely use the Acquisition Gateway and other designated sources to seek data such as prices paid, terms and conditions, best practices, sustainability requirements, past performance, competition rates, small business goals, and other information that will help them conduct thorough analyses and negotiate the best deal for the taxpayer (see section 10 below); (b) Share data and information— Program managers, contracting professionals, requiring officials, and contracting officer representatives must have access to relevant information and data to plan for and manage solutions and needs. Consistent with applicable law, agencies shall not enter into any contractual agreement that restricts the Federal Government’s ability to share, within the Government, relevant contract costs and prices, terms and conditions, and other information needed to conduct adequate market PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 69863 research. Agencies should use best practices in crafting appropriate contract language to ensure nonproprietary pricing and terms and conditions are made available to other Government agencies in order to ensure implementation of category management principles in leveraging the Government’s buying power. (c) Monitor and Measure progress— CMXs, agencies, and OMB must track implementation and long-term execution success through the assessment of metrics, including the approved Category Management CrossAgency Priority Goals of savings, reduced duplication, Spend Under Management (SUM), and small business goals, as well as other relevant category measures, like green procurement goals and/or impacts to the small business industrial base (see section 11). 9. Governance, Roles and Responsibilities. a. The Category Management Leadership Council (CMLC)—The Administrator for Federal Procurement Policy shall establish and chair a Category Management Leadership Council (CMLC) to serve as the governing body for category management activities conducted in connection with this Circular. The Council shall be comprised of interdisciplinary representatives from the largest buying agencies, including the Departments of Defense, Energy, Health and Human Services, Homeland Security, Veterans Affairs, the General Services Administration (GSA), the National Aeronautics and Space Administration, as well as the Small Business Administration, and other agencies designated by the Administrator. The government-wide CMXs and a representative from the Unified Shared Services Management Office in GSA shall participate as nonvoting members along with other appropriate individuals identified by the Administrator. The CMLC shall be responsible for core implementation and execution functions, including: (1) Approval of Government-wide strategies for core categories and certain subcategories, as appropriate; (2) approval of over-arching Best in Class criteria and procedures, and any subsequent changes; (3) provide advice to OMB on recommendations by CMX to designate BIC contract sourcing solution as mandatory and on policy for agency migrations and exceptions to use of such solutions; (4) assessment of the performance of Government-wide strategies and solutions—to include small business E:\FR\FM\07OCN1.SGM 07OCN1 mstockstill on DSK3G9T082PROD with NOTICES 69864 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices participation—(not less than annually); and (5) approval of any changes to the Government-wide category structure and governance. b. The Office of Federal Procurement Policy (OFPP)—The OFPP in the Office of Management and Budget is responsible for providing overall direction of Government-wide procurement policy and for promoting economy, efficiency, and effectiveness in all Federal procurement.9 In this role, OFPP will: (1) Set the CM strategic policy direction; (2) issue CM policies, guidance, instructions and directives to Federal agencies,10 in consultation with CFO Act agencies and in partnership with other relevant oversight offices (for example, IT acquisition policies cosigned by the United States Chief Information Officer); (3) appoint CMLC members and chair the CMLC; (4) nominate lead agencies for each category to be the Government-wide Category Center of Excellence (CoE), in consultation with the CMLC (reference CoE roles and responsibilities in this section); (5) review the CoE recommendations for CMXs and upon CMLC approval, formally designate the Governmentwide CMXs; (6) develop reporting requirements to assess agencies’ progress toward increasing their Spend Under Management (see section 11 below); (7) determine and measure supporting Cross-Agency Priority Goals or other Governmentwide goals and metrics; 11 and (8) otherwise shape and monitor the government’s efforts to implement CM effectively. c. The General Services Administration (GSA)—In addition to GSA’s general leadership role in the acquisition and management of goods and services across the government, the agency also serves as the Governmentwide program management office (PMO) for category management. The GSA PMO for category management provides direct support to the CMXs, to include: (1) Development and management of the tools and resources to support CM to include the Acquisition Gateway (see section 10 below); (2) creation, in consultation with OMB, and maintenance of Category 9 OFPP Act, 41 U.S.C. 1101. and guidance will be posted at www.whitehouse.gov/omb/procurement. Instructions and directives will be posted on the Acquisition Gateway, https://hallways.cap.gsa.gov. 11 Public Law 111–352, 1(a), Jan. 4, 2011, 124 Stat. 3866, GPRA Modernization Act of 2010; 10 Policies VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 Management instructions and standard procedures; (3) maintain the category structure and taxonomy; (4) analysis of Government-wide spending data and other core support for all Government-wide common spend categories; (5) sharing training and educational materials regarding category management; (6) collaboration with Federal agencies, vendors, and other stakeholders to facilitate feedback on customer satisfaction on Governmentwide common category solutions and generate ideas for continuous improvement; and (7) coordination for the delegations of procurement authority for Governmentwide category sourcing The GSA voting member on the CMLC represents the interests of GSA as an organization, and is responsible for communicating and coordinating all relevant CM information to the GSA stakeholders. d. Center of Excellence (CoE)—The CoE is the lead agency or organization for each category or sub-category, which, due to its subject matter expertise, experience, and other category unique qualifications, retains the Government-wide CMX for level 1 categories, or level 2 and lower category leads. The OFPP, in consultation with the CMLC, will nominate agencies to serve as the CoE. The CoE must: (1) In consultation with the CMLC and OFPP, nominate a category subject matter expert to serve as the Government-wide CMX; (2) when appropriately delegated authority, serve as the executive agent for sourcing requirements approved in the category strategic plan; and (3) manage all aspects of the category strategic plan, including conducting all reviews, and obtaining all approvals required by law, regulation, and policy prior to awarding any Government-wide contract sourcing solutions. e. Government-wide Category Managers (CMX)—The Category CoE must nominate the Government-wide CMX for that category, in consultation with the CMLC and OFPP. CMXs serve as the Government-wide leaders that lead interagency teams of subject matter experts, analyze data, work with industry, develop and promote strategies, and drive the adoption of CM principles and practices throughout the Government. CMXs must assess customer and stakeholder satisfaction, and small business participation on a continuous basis to ensure efficacy of the strategies and solutions. Small business participation will include PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 strategies to meet or exceed small business goals, including consideration of small business set-asides, regionalization, or easier access to federal contracts, on-ramp or off-ramp opportunities and corrective action if participation falls below expectations. The Government-wide CMXs will review all agency requests for exception to OMB CM policy and forward the requests, for information, to the Administrator for Federal Procurement Policy. The GSA PMO will maintain the current list of CMXs on the Acquisition Gateway.12 f. CFO Act Agencies—The Agency’s CAO or SPE is responsible for establishing efficient processes and policies that will ensure this Circular, and the principles of CM, are applied throughout their agency, while ensuring agency mission and small business goals are met. In order to drive implementation and ensure Government-wide CM strategies and solutions meet agency needs and are informed, the CAO or SPE shall: (1) Designate a Category Management Accountable Official (CMAO)—The agency Chief Acquisition Officer or Senior Procurement Executive are most likely in the best position to assume the CMAO role, but may delegate operational duties as needed. Among other duties, the CMAO is responsible for: (a) Establishing processes and policies that will ensure this Circular and the principles of CM are applied throughout their agency; (b) submitting to OMB the agency’s SUM analysis (see section 11) in accordance with section 13 below; and (c) coordinating with OMB, the relevant Government-wide and agencylevel CMX’s, and other interested parties on category management issues. (2) Designate Agency-level Category Managers (CMX)—To better align the development and implementation of CM strategies, agencies must designate agency-level CMXs for, at a minimum, those Government-wide common categories that represent key areas of spend for the agency, or when requested by OMB or the Government-wide CMX. The agency CMXs will work closely with the Government-wide CMXs to develop and implement categoryspecific strategies, such as gathering agency sales and pricing data, and developing teams of experts. The agency-level CMX and will most likely be a member of the Government-wide 12 The current list of CMX is accessible via the following link: https://hallways.cap.gsa.gov/faq, ‘‘Where can I learn more about the government’s plan to adopt category management?’’ E:\FR\FM\07OCN1.SGM 07OCN1 mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices category team, led by the Governmentwide CMX. g. Supporting Roles and Responsibilities—The CM infrastructure depends on the work of interagency category teams, category leads, and other key personnel and groups. Attachment 2 contains a depiction of the Federal Government’s CM governance structure, including supporting roles. h. Category Teams. Category Teams are formed by the Category Manager and are led by either the Category Manager for Level 1 core categories, or a Category Lead for Level 2 or lower core subcategories. These teams are the primary collaborative bodies where the daily category management activities occur. The teams include participants from multiple Federal agencies, generally subject matter experts that understand the Government’s requirements as well as the industry and market dynamics surrounding a category. i. Category Leads. Category Leads are responsible for the development and execution of category strategies for a single, specific Level 2 category. The Level 1 CoE nominates the category leads and the CMX approves their designation. Category leads build and lead cross-functional Level 2 Government category teams. In consultation with the category manager, establish the strategic direction, lead efforts to gather, aggregate and analyze market, industry, supply chain, demand management, user profiles and other information to improve category performance. j. Other team participants. The success of CM depends on getting the right people to work together toward a common solution. Agencies are expected to support CMXs by providing team participants, either directly, through the GSA PMO, or at OMB’s request. Team participants will be determined by such considerations as the magnitude of agency spend or access to subject matter expertise. Many agencies have CM and related management structures already in place, and they are encouraged to leverage these in identifying their CMAOs, agency-level CMXs, and team members, as needed. 10. Increasing the Visibility of Data and Information—Building an Acquisition Gateway. Core tenets of CM are data analytics and information sharing. Visibility into prices paid, best practices in building or managing solutions/policies, and other key information are needed to negotiate in the best interest of the taxpayer. The central repository of this information is VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 the Acquisition Gateway, which GSA manages in accordance with the Acquisition Gateway Community governance structure. GSA will develop and maintain the IT infrastructure to ingest, manage, and share prices paid and other data and information (as appropriate—refer to Section 8.d above) to avoid duplicate or manual data entry. CMXs, working with the CMLC and OMB, must prioritize areas for which Government-wide, agency-wide, and other high-performing, BIC vehicles, including prices paid, will be made available via the Acquisition Gateway. The Acquisition Gateway will support the Federal acquisition workforce by housing the best practices, contracts, community and other tools to aid the workforce in the implementation of the category strategies. To ensure the Acquisition Gateway continues to meet the demands of the acquisition workforce in response to the implementation of CM, GSA will develop a process for soliciting regular feedback, input, and suggestions from users of the Gateway in order to maintain the relevance of the tool. 11. Measuring CM Success. The Government’s CM success must be measured through the assessment of metrics, including increasing savings, reducing duplication, increasing spend under management, achieving Government-wide small business goals, and other relevant measures (see section 7 above). OMB will report these metrics publicly as part of the Category Management Cross-Agency Priority Goal.13 See section 13 for reporting requirements. a. Spend Under Management (SUM): SUM is an overall measure of the Federal Government’s CM maturity, designed to highlight successes at both the Government-wide and agency-wide level, as well as identify areas for development that will bring more agency spend under management. SUM is the principal measure by which OMB will measure the adoption of CM. The SUM model provides an assessment of CM maturity for each of the ten Government-wide categories and the CFO Act Federal Agencies using a threetiered maturity model that evaluates CM against five attributes: Leadership, strategy, data, tools, and metrics (reference attachment 3). As the government gains experience, the model will be updated and made available on the Acquisition Gateway, as needed. OMB will assess the 24 Agencies subject to the CFO Act on their SUM progress not less than annually in 13 Public Law 111–352, 1(a), Jan. 4, 2011, 124 Stat. 3866, GPRA Modernization Act of 2010; PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 69865 accordance with the requirements outlined in OMB Circular A–11 and associated budget guidance. Agencies’ SUM maturity assessments will be used to engage agency leaders in regularly reviewing progress toward their goals. Additionally, CMXs will use this information to develop strategies to bring more agency dollars within their category under management. b. Small Business: Increasing the participation of small businesses in the government’s CM initiative is a top priority. Proposed solutions must baseline small business use under current strategies and set goals to meet or exceed that baseline participation under any new solutions. The CMLC will review each proposed strategy to ensure competitive small businesses have a high degree of participation to the maximum extent practicable, and will monitor actual small business participation by category. In developing strategies, CMXs will comply with the small business reservation requirement for purchases between the micropurchase threshold and the simplified acquisition threshold, increase access to Federal procurement opportunities for small businesses, and use all authorities available to maximize small business participation. CMXs will take corrective action if participation falls below expectations. c. Savings: Savings in Category Management refer to reductions in cost that allow the Federal Government to make better use of resources. Savings generally can be derived from three principles: (1) Reduced unit prices based on increased volume or other strategy; (2) changes in behavior resulting from improved commodity management and access to data/ information; and (3) administrative savings, e.g., based on reducing the number of duplicative vehicles. OMB will review agency savings figures in the context of instructions given by the CMLC to ensure consistent savings principles are applied in these estimates. 12. Workforce Category Management Training. Successful implementation of CM is dependent upon the acquisition workforce, including program managers, contracting professionals, requirements owners, contracting officer’s representatives and other Federal officials involved in meeting mission needs. These critical members of the Federal workforce need the right training, tools, and information to enable effective CM execution as required in this Circular. Agencies should consider including CM competencies in CM stakeholders’ Individual Development Plan, as E:\FR\FM\07OCN1.SGM 07OCN1 69866 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES appropriate. To support the workforce, the Federal Acquisition Institute and Defense Acquisition University, in collaboration with GSA’s CM PMO, will develop CM competencies for various levels and functional areas, as directed by OFPP in coordination with the Secretary of Defense. 13. Reports to OMB. Each of the Government-wide CMXs must submit quarterly reports to be shared via the Acquisition Gateway. These reports will include, at a minimum, savings, reduced duplication, SUM (which might VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 not apply quarterly), small business participation, and any other categoryspecific metrics that OMB requires. OFPP may adjust this cadence and these requirements as needed. Agencies must provide contact information for the CMAO and the agency CMXs to the GSA PMO at (insert generic email box) and provide updates as personnel change. While Agencies that are not subject to the CFO Act are not required to have identified CMAOs, they are encouraged to identify accountable officials who can increase PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 the use of existing contracts, contribute subject matter experts, and drive the adoption of CM principles in their agencies. 14. Effective date and implementation. October 1, 2016. 15. Inquiries. OFPP staff TBD. Attachments 1. Government-wide Category Structure 2. Category Management Governance Structure 3. Spend Under Management (SUM) BILLING CODE P E:\FR\FM\07OCN1.SGM 07OCN1 mstockstill on DSK3G9T082PROD with NOTICES VerDate Sep<11>2014 ~ Government-Wide Category Structure :::r 3 (I) i4 (total FY 2015 spend $2728) :.tt Jkt 241001 "General Government Categories ...:!. 1. rr- ss.o.1s 2:. Professi!mail Servk:es:-- ~.46 0¥1: OMS 3. Serurity aP!d Protection - 0¥1~ 2 .1 ~lr~ ¥ .. £IT::in~o:-.rtion PO 00000 2.2 2 3- M~r::~?-or-,ent 2A M,;;;rkoetW:& :;Jl".~ O:~str)bOtt~r~ Frm 00090 2 .5 ?wtJ2c Ret.t;l:"-"'£ :en-d P-7...f5s+oP-.;oi Cotr/rt':--::~tati"On-s i .6 T-eJeromrr;-wn-.~:c:;>t-¢ffoS 2.6 ~~1 ~ ;.-.?.r:::;ce.s. 4.1 Col"l£tn:J.Ction ~;;,te!Z M;:ter\;0{\s 502 :FII"-e:lft~l-~,&fety/E:rFw\:-.;:,no.-'1"'-e:ft!Uii Coo5-tik'Cin::4'" R-~~.,ted ~;ei;~~ Senr-ic:B 5.3 :'t;-r1•!f~re .&, Tee-~ tl.i!:·~M:E:e.'"2;S S.4 Test 55 ';ndf~s.'trh'lfi Pr·~;:f:w:>t.U Yn.s,t.N/f,{:;it~n~~e/ttep-;i; r/N.et<'.fi'~::Z o1.5-f-~-Gt6 P·u;d-;~ SerW'7~ Se::Yic~s: Fmt 4703 SUB I. ta. Mei:flllal - S'l5.Z5 9. 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Pl":~Jn E:\FR\FM\07OCN1.SGM 7_4 T~nsp:·~k;;n of'TI-;:ir~, E.1 ;=~,r-¥r 73"~ E2 8.3 "TG'.tei ~rH: 9.1 0¥1: AJt.e-p,.;ftf~ WLrz,1:J·6.-::cr~ .;fs:ttoAT& -9 *2 EituatU~,;d fx:Kfu ~ 3 E.Z·;.;.::;;t'iofl-....,;t; ~l"d<t1t~..rtf-::-r~ -9AS?...r-:.-J5;zed fduat".o:n.'i'l $eC"V'ke 9fl5- v~~:or~ 9,£ Hwm;u; :lO.i Dnr~$: ::.r;,d 102 103 ~,x~ut!~~ P-r·Mt.i>t'ts ~iii1=•rreem &A-vJ"~o~'a &5wppt/,.e ri~ltk07fJ"~ 5-e:-,ifOM' 'ir;K~;n;; ~~!.frc6 Senrkes, 7 JS 1 r.;,r;-_spo;t.-t~r; Eqy:.:\prrte:M fae:~ the 07OCN1 a.nd may be modified with I As of 20 January 2016 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices 17:36 Oct 06, 2016 ~ J 69867 EN07OC16.001</GPH> 69868 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices SPEND UNDER MANAGEMENT Tiered Maturity Model The governing board for category Managemer~t initiatives, Provides governmenl"'llftde dlreclion on strategy and in illatives, Experts in the category (e,g,, IT), They develop the government-wide strategy to dnve rmprovoo per1o1111ance and adaschangeagenls lorthe categmy Responsio~ for !he development and executiOn of category strategies lor a spect!K Level category {e.g,, IT) Category Management PMO Responsible for the development and execution o! category straleg~es lor a spectii<: Level2 calegory (e,g'" IT soltware w~lhin the IT category) Traditional slralegic sourcing working group formed when the category management process identifies the need lor a ne1¥ acquisitiOn solution Common Acquisition Platform Provides overall program management support lo 1t1e groups and , individuals in the governance structure; facilitates !he development and implementation of business ru~s and processes Develops and executes !he IT strategy to support category management business s!ralagyvia lheAcqul<;ilion Gateway '""""""-c""C"",cc" I Category Team (Level2) Level 1 (e.g., IT) Category Team includes the Category Manager and all approved Category Leads VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00091 Fmt 4703 Level 2 (e.g., IT Software) Category T earn includes the Category Lead and agency representatives Sfmt 4725 E:\FR\FM\07OCN1.SGM 07OCN1 EN07OC16.002</GPH> mstockstill on DSK3G9T082PROD with NOTICES Category Team (Level1) Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices 69869 Background: Category Management is a management concept the Federal government is applying to buy smarter and more like a single enterprise. It involves identifYing commonly purchased areas of spend, collectively developing heightened levels of expertise, leveraging shared best practices, and providing acquisition, supply and demand management solutions. The overarching goals are to increase efficiency and effectiveness, increase savings, meet small business goals, and reduce contract duplication. One key metric in evaluating success of Category Management efforts is "Spend Under Management." By bringing common "Spend Under Management," which includes collecting and sharing prices paid and other key performance information, agencies will get the same competitive price and quality ofperformance when they are buying similar commodities and services under similar circumstances. Definition: OMB defines "Spend Under Management" according to a Tiered maTurity model. The tiered maturity model includes three tiers and each tier includes the same five attributes: leadership, strategy, data, tools, and metrics. This approach will assign credit for the tremendous work done by agencies individually and collectively in the past, while tracking progress toward more government-wide spend under management solutions. Tier I and Tier 2 are geared toward assessing SUM at the agency level. Tier 3 is meant to assess the maturity of the government-wide category. • Designated Agency Category Lead with specific category expertise and day-to-day management and oversight responsibility (i.e. Program Manager for IT software contract; this is not agency CIO). • Clear understanding of Category Manager (Government-wide and Agency-wide), and Category Lead roles. • Designated Part-Time Government-wide Category Manager (approved by OMB); and/or • Designated Agency Category Lead • Active participation on Interagency Category teams or Commodity Teams. • Meets One of Three Criteria: • Policies are implemented and adopted that drive behavior changes (e.g., adopted uniform refresh cycles for laptops and deskiops 14). ./Implements governmentwide policies that drive behavior changes; and/or ,/Government-wide solutions in use, per mandatory use or consideration policies in place; and/or • Government-wide Category Management Council Staffed by Senior Level Agency Staff (endorsed by Category Manager) • Active Category Teams • Government-wide PMO support. • CMLC approved category management strategy that endorses a limited number of "Best In Class" solutions in accordance with Best in Class instructions provided by OMB. ,/Agency-wide strategic sourcing solutions in place in accordance with legacy CMLC-approved Strategic Sourcing Key Decision Point Process or the OMB Best in Class instructions. 14 OMB Memo M-16-02, Category lvfanagement Policy 15-1: Improving the Acquisition and lvfanagement of Common Information Technology: Laptops and Desktops, October 16, 2016, VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4725 E:\FR\FM\07OCN1.SGM 07OCN1 EN07OC16.003</GPH> mstockstill on DSK3G9T082PROD with NOTICES • Existing agency-wide solutions are being used, per mandatory use or consideration policies. and/or • Designated Full-Time Government-wide Category Manager (appointed by OMB) 69870 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices documented high-level analysis, which includes clements required by the legacy CMLC-approved Strategic Sourcing Key Decision Point Process or the OMB Best in Class instructions for establishing a baseline assessment, including total spend, vendors, market dynamics, small business participation 15 . • When requested by the Category Manager, agency shares relevant contract terms, condition, saving methodologies, and pricing data across government, preferably via the Common Acquisition Gateway 16 , within 90 days. criteria: criteria: • Agency collects data on contract administration performance and benchmarks other internal/external processes, including pricing, agency use, solution performance; and other appropriate elements if solution is demand management policy • Active commodity management analysis: pricing, supply chain analysis, market information, agency use, solution perfornmnce, validated savings, 18 demand management strategies, other activities to drive better acquisition • Agency collects customer feedback data on vendor performance, offerings, value, and customer support 17 • Vendors analysis: prices paid data collected in a way that supports comparative analytics (i.e., normalizes for quantity or delivery term variances); feedback on modification time, terms and condition issues, and customer serv1ce • Customer analysis: customer profiles to understand what is being purchased, from whom, when and why; and customer/user feedback on vendor performance, o1Ierings, value, and customer support. • Analysis of outstanding opportunity spend relative to actual spend. • Tools (e.g., DHS Connect, DoD eMall, GSAdvantage!) are in place and shared to capture and share information on the category, such as contract vehicles, availability, terms/conditions, pricing, etc. • Agency meets one of the following: ./Worked with Category Manager to populate the Cmrm10n Acquisition Gateway with relevant information, including: • Acquisition Gateway includes only solutions (acquisition vehicles and/or policies) that are endorsed by Government-wide Category Manager as "Best in Class" - Best in Class agency solutions; and/or - Government-wide strategic sourcing solutions (FSSI), GWAC, MAS, or MAC that are in place;. and/or Compliance with Federal Acquisition Regulations on bundling and consolidation. The Acquisition Gateway is accessible via the following link: https://hallways.cap.gsa.gov/ Data reported via the Past Performance Information Retrieval System. ·'-=="-'-~-=-"-"-'-"-"'~""'""""'""'"'"'~ 18 As the govermnent implements Category Management, prior to Tier 3 designation, OMB will validate savings and performance of servicing agency .. 17 VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4725 E:\FR\FM\07OCN1.SGM 07OCN1 EN07OC16.004</GPH> mstockstill on DSK3G9T082PROD with NOTICES 15 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices BILLING CODE C OFFICE OF MANAGEMENT AND BUDGET Request for Comments on Proposed OMB Circular No. A–108, ‘‘Federal Agency Responsibilities for Review, Reporting, and Publication Under the Privacy Act’’ Executive Office of the President, Office of Management and Budget. ACTION: Notice of availability and request for comments. AGENCY: mstockstill on DSK3G9T082PROD with NOTICES VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 FOR FURTHER INFORMATION CONTACT: site at https://www.whitehouse.gov/ omb/inforeg_infopoltech. Howard Shelanski, Administrator, Office of Information and Regulatory Affairs. [FR Doc. 2016–24239 Filed 10–6–16; 8:45 am] BILLING CODE P Jasmeet Seehra, Office of Management and Budget, Office of Information and Regulatory Affairs, at jseehra@ omb.eop.gov. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION This OMB Circular describes agency responsibilities for implementing the review, reporting, and publication requirements of the Privacy Act of 1974 and related OMB policies. This Circular supplements and clarifies existing OMB guidance, including OMB Circular No. A–130, Managing Information as a Strategic Resource, Privacy Act Implementation: Guidelines and Responsibilities, Implementation of the Privacy Act of 1974: Supplementary Guidance, and Final Guidance Interpreting the Provisions of Public Law 100–503, the Computer Matching and Privacy Protection Act of 1988. All OMB guidance is available on the OMB Web Notice of Centennial Challenges 3DPrinted Habitat Structural Member Challenge SUPPLEMENTARY INFORMATION: The Office of Management and Budget (OMB) is requesting comments on proposed Circular A–108, ‘‘Federal Agency Responsibilities for Review, Reporting, and Publication under the Privacy Act.’’ The proposed Circular is available at http:// www.whitehouse.gov/omb/inforeg_ infopoltech. DATES: Comments are requested on the proposed Circular no later than October 28, 2016. ADDRESSES: All comments should be submitted via http:// www.regulations.gov. Please submit comments only and include your name, company name (if any), and cite ‘‘Federal Agency Responsibilities for SUMMARY: Review, Reporting, and Publication under the Privacy Act’’ in all correspondence. All comments received will be posted, without change or redaction, to www.regulations.gov, so commenters should not include information they do not wish to be posted (e.g., personal or confidential business information). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 [16–071] National Aeronautics and Space Administration (NASA). SUMMARY: This notice is issued in accordance with 51 U.S.C. 20144(c). The 3D-Printed Habitat Challenge (3DP), Structural Member Competition is open and teams that wish to compete may now register. Centennial Challenges is a program of prize competitions to stimulate innovation in technologies of interest and value to NASA and the nation. The 3D-Printed Habitat Challenge Phase 2 Structural Member is a prize competition with a $1,100,000 total prize purse to develop the fundamental technologies necessary to manufacture an off-world habitat using AGENCY: E:\FR\FM\07OCN1.SGM 07OCN1 EN07OC16.005</GPH> [FR Doc. 2016–24054 Filed 10–6–16; 8:45 am] 69871

Agencies

[Federal Register Volume 81, Number 195 (Friday, October 7, 2016)]
[Notices]
[Pages 69860-69871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24054]


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OFFICE OF MANAGEMENT AND BUDGET

Office of Federal Procurement Policy


Category Management

AGENCY: Office of Federal Procurement Policy, Office of Management and 
Budget.

ACTION: Proposed new Office of Management and Budget Circular No. A-
XXX, ``Implementing Category Management for Common Goods and 
Services.''

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SUMMARY: The Office of Federal Procurement Policy (OFPP) in the Office 
of Management and Budget (OMB) is proposing to issue a new OMB 
Circular, Implementing Category Management for Common Goods and 
Services, to codify category management, a strategic practice where 
Federal contracting for common goods and services is managed by 
categories of spending across the Government and supported by teams of 
experts. The Circular establishes key principles, and strategies and 
policies, roles and responsibilities, and metrics to measure success.

DATES: Interested parties should submit comments in writing to the 
address below on or before November 7, 2016.

ADDRESSES: Comments may be submitted by any of the following methods: 
Online at http://www.regulations.gov, Facsimile: 202-395-5105, Mail: 
Darbi Dillon, Office of Federal Procurement Policy, 1800 G Street NW., 
Washington, DC 20006.
    Instructions: Please submit comments only and cite ``Proposed New 
OMB Circular A-xxx'' in all correspondence. All comments received will 
be posted, without change or redaction, to www.regulations.gov, so 
commenters should not include information that they do not wish to be 
posted (for example because they consider it personal or business 
confidential).

FOR FURTHER INFORMATION CONTACT: Darbi Dillon, Office of Federal 
Procurement Policy, 1800 G Street NW., Washington, DC 20006, at 202-
395-1008.

SUPPLEMENTARY INFORMATION: Category management is an effective business 
practice for reducing duplication in contracting, better leveraging the 
government's buying power, and promoting the use of best in class 
solutions government-wide. Historically, the vast majority of common 
agency needs--such as for information technology, professional 
services, medical supplies, human capital, security and protection, and 
transportation and logistics--have been acquired in a disaggregated 
manner resulting in a sub-optimization of the Government's buying power 
and diminished Federal Government's market profile. Category management 
provides a pathway for agencies to move away from managing purchases 
and prices individually across thousands of procurement units and 
towards managing entire categories of common spend with collaborative 
decision-making. As a result, institutionalizing category management as 
the principal way in which all Executive Branch agencies acquire and 
manage the roughly $270B in annual spending on common goods and 
services will help taxpayers realize better value from their 
acquisition investments in every day needs and, equally important, 
allow contracting offices to give greater attention to their agency's 
mission critical acquisitions.
    For more than a decade, the Office of Management and Budget (OMB) 
has worked with agencies on government-wide initiatives to promote 
strategic sourcing--i.e., the collaborative and structured process of 
critically analyzing an organization's spending and using this 
information to make business decisions about acquiring commodities and 
services more effectively and efficiently. These efforts have evolved 
and matured as OMB has formalized the requirements for strategic 
sourcing development, governance, and oversight. Since 2010, strategic 
sourcing efforts have helped agencies save more than $500 million by 
reducing unit prices, applying effective demand management strategies, 
and avoiding duplicative administrative costs. While these 
accomplishments are impactful and will continue, a broader 
organizational vision is needed to accelerate and successfully manage 
the many dimensions of interagency collaboration that must occur for 
the federal government to buy as one.
    In December 2014, the Office of Federal Procurement Policy (OFPP) 
announced category management as the new broader model for organizing 
how the Federal Government manages the acquisition of commonly acquired 
goods and services. The memo outlined a series of specific actions to 
enable the identification of best in class vehicles within each common 
spending area as well as opportunities to change inefficient 
consumption patterns. The Category Management Leadership Council 
(CMLC), comprised of the largest buying agencies, divided the 
government's common spending into 10 categories and assisted OMB in 
appointing recognized market experts to serve as category managers. 
Noteworthy progress has already been made in breaking down agency silos 
and acting as the world's largest buyer. For example, in the 
Information Technology category 45% of spend on workstations has been 
directed to three identified best in class solutions with a goal to 
reduce the number of contracts for workstations by 20% by the end of 
fiscal year 2016. Furthermore, government-wide buying events for 
laptops and desktops resulted in more than 15% savings on average. In 
addition, consistent with the direction in the Federal Information 
Technology Acquisition Reform Act, two new government-wide software 
agreements were established to increase agency use of enterprise 
license agreements and help agencies move away from the tens of 
thousands of agreements that have been traditionally negotiated to meet 
these needs.
    This proposed OMB Circular brings together and builds on these 
efforts and expands upon their concepts of economy and efficiency by 
establishing category management as the principal way in which the 
government acquires and manages its common requirements. The circular 
addresses (1) key principles, (2) strategies and policies, (3) 
governance structures, and (4) metrics to measure success.
    Of particular note, the proposed Circular would:
    Establish a government-wide approach to acquiring common goods and 
services. The proposed Circular would be applicable to all Executive 
Agencies with Chief Financial Officer (CFO) Act agencies and those 
represented on the CMLC having additional responsibilities. Recognizing 
the unique characteristics and requirements of each agency, all 
Executive Branch Agencies would be required to promote, to the fullest 
extent possible, maximum adoption of the category management 
principles, strategies and requirements.
    Emphasize the potential to achieve greater economy and efficiency 
across the Federal Government by implementing the category management 
key principles. The proposed Circular focuses on collaboration and 
coordinated management of the common goods and services in the

[[Page 69861]]

development of requirements and use of best in class vehicles and 
practices, reduction of duplicate contract vehicles, improved mission 
value and total cost of ownership, and strengthened demand management 
practices, while advancing Federal policy objectives, such as inclusion 
of small business, competition, and strengthening sustainability, and 
improving supplier relationships.
    Define the strategies and policies agencies would follow to execute 
category management. The proposed Circular establishes the practice of 
using existing contracting sourcing solutions prior to executing new 
contracts, with a priority given to mandatory sources as defined in the 
Federal Acquisition Regulation, and then category management best in 
class contract sourcing solutions, distinguishing between `best in 
class preferred' and `best in class mandatory' contract sourcing 
solutions. The proposal institutes policies to seek and share 
information and to monitor and measure progress of category management 
using defined core metrics.
    Outline the governance, and roles and responsibilities for all of 
the key players and stakeholders. The proposed Circular 
institutionalizes the CMLC, chaired by the OFPP Administrator, as the 
governing body, and further defines roles and responsibilities for the 
General Services Administration, the government-wide and agency-level 
category managers, the lead agencies for each category (Centers of 
Excellence), the Chief Financial Officer Act Agencies, and other 
stakeholders critical to the success of category management.
    Stress the importance of data analytics and information sharing--
outlining the criticality of the Acquisition Gateway as a key enabler 
in this process. The proposed Circular designates the Acquisition 
Gateway as the central repository for data and information necessary to 
support the execution of category management.
    Identify the core metrics by which category management success will 
be measured with an emphasis on Spend under Management. The proposed 
Circular establishes core metrics against which the government's 
category management success will be measured: Increasing savings, 
reducing duplication, increasing spend under management, achieving 
small business goals, and other relevant measures that may be 
identified in the future. These metrics will help to ensure that 
Government's continued commitment to maximizing opportunities for small 
business contractors and strengthened sustainability and accessibility.

Anne E. Rung,
Administrator for Federal Procurement Policy.

Circular No. A-XXX

To the Heads of Executive Departments and Establishments

Subject: Implementing Category Management for Common Goods and Services

    1. Purpose. This Circular establishes Category Management (CM) as 
the principal way in which all Executive Branch agencies must acquire 
and manage common goods and services \1\ spend to drive greater economy 
and efficiency. Agencies must use the CM principles and practices 
articulated in this Circular to reduce duplication, better leverage the 
government's buying power, and promote the use of effective, best in 
class solutions. Government-wide. Agencies designated as Centers of 
Excellence (CoE) \2\ and individuals having supporting roles in the 
implementation of CM must manage their responsibilities in accordance 
with this Circular.
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    \1\ Common goods and services refer to those items and services 
that all or most federal agencies procure and are not unique to the 
mission of an individual agency. These goods and services are 
interchangeable between agencies and are generally available 
commercially.
    \2\ The CoE is the lead agency or organization for each category 
or sub-category, which, due to its subject matter expertise, 
experience, and other category unique qualifications, retains the 
Government-wide CMX for level 1 categories, or level 2 and lower 
subcategory leads.
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    2. Authority. This Circular is issued pursuant to 31 U.S.C. 1111, 
the OFPP Act, 41 U.S.C. 1121 et seq.; the Clinger-Cohen Act, 40 U.S.C. 
11101, et seq.; the Federal Information Technology Acquisition Reform 
Act (Title VIII, Subtitle D of the National Defense Authorization Act 
for FY 2015, Pub. L. 113-291, Sec. Sec.  833, 836); the National 
Defense Authorization Act for FY 2009 (Pub. L. 110-417, Sec.  
865(b)(2)), and Government Performance and Results Modernization Act of 
2010 (Pub. L. 111-352).
    3. Applicability. This policy is applicable to all Executive 
Agencies.\3\ All Executive Agencies must have a CM program in place 
that promotes maximum adoption of the key principles, strategies and 
requirements of CM described below. Chief Financial Officer (CFO) Act 
agencies \4\ and those represented on the Category Management 
Leadership Council (CMLC) have additional responsibilities, as 
enumerated in sections 9-12 of this Circular.
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    \3\ Executive agency is defined in 41 U.S.C. 133.
    \4\ Agencies listed in 31 U.S.C. 901(b)(1) and (b)(2).
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    4. Rescission. This Circular rescinds and replaces Office of 
Management and Budget (OMB) Memorandum M-13-02, Improving Acquisition 
through Strategic Sourcing, dated December 5, 2012; and OMB Memorandum, 
Implementing Strategic Sourcing, dated May 20, 2005.\5\
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    \5\ OMB Memo M-13-02, Improving Acquisition through Strategic 
Sourcing, December 5, 2012, https://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-02_0.pdf and OMB Memorandum, 
Implementing Strategic Sourcing, dated May 20, 2005, https://www.whitehouse.gov/sites/default/files/omb/assets/omb/procurement/comp_src/implementing_strategic_sourcing.pdf; established and 
evolved the framework and governance for Strategic Sourcing.
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    5. Background. The Office of Federal Procurement Policy (OFPP) is 
responsible for promoting economy, efficiency, and effectiveness in the 
Federal acquisition process,\6\ and regularly implements policies and 
initiatives to better leverage Government's buying power to ensure 
taxpayer dollars are spent efficiently and effectively. For example, in 
2005, OMB formally launched strategic sourcing--an acquisition approach 
focused on aggregating demand--and expanded it in 2012, as a 
Government-wide initiative focused on reducing unit pricing and total 
life cycle management costs for common needs. On 29 September 2011, 
OFPP issued OMB Memo, Development, Review and Approval of Business 
Cases for Certain Interagency and Agency-Specific Acquisitions, 
directing Agencies to develop business cases for certain types of 
awards to reduce contract duplication. In December 2014, OFPP released 
``Transforming the Marketplace: Simplifying Federal Procurement to 
Improve Performance, Drive Innovation, and Increase Savings,'' \7\ 
which cites a critical need for the Federal Government to fundamentally 
shift away from managing purchases and evaluating prices individually 
across thousands of procurement units to more directly managing entire 
categories of common spend in order to deliver better value--a strategy 
known as Category Management.
---------------------------------------------------------------------------

    \6\ The OFPP Act, 41 U.S.C. 1101(b)(2).
    \7\ OFPP Memo, ``Transforming the Marketplace: Simplifying 
Federal Procurement to Improve Performance, Drive Innovation, and 
Increase Savings,'' December 4, 2014.
---------------------------------------------------------------------------

    This Circular brings together these earlier policies and expands 
upon their concepts of economy and efficiency to establish the key 
principles, strategies, policies, processes, governance structure, and 
roles and responsibilities to implement CM fully as the principal

[[Page 69862]]

way in which the government acquires and manages its common 
requirements.
    6. Common Categories of Goods and Services. Based on fiscal year 
2015 data from the Federal Procurement Data System, agencies spent over 
$270 billion--over half of all federal contract spending--on common 
requirements like information technology (IT) hardware, office 
supplies, and other basic needs. As further detailed in Attachment 1, 
the ten core (Level 1) categories are shown below. The acquisition and 
management of requirements in these ten CM categories are subject to 
this Circular. This Circular does not address unique, agency/mission-
specific requirements determined by the appropriate agency leadership 
to fall outside the scope of this directive. OMB category-specific 
policies (CM policies) will include instructions for making these 
determinations, as category strategies are developed (see section 8(a) 
below). The CMLC will approve significant changes to the scope, 
leadership, or definition of the core categories (to include adding, 
deleting, or restructuring categories) and update the categories as 
needed. The most current list is available on the Acquisition 
Gateway.\8\
---------------------------------------------------------------------------

    \8\ The current Government-wide Category Structure is accessible 
via the following link: https://hallways.cap.gsa.gov/faq, ``Where 
can I learn more about the government's plan to adopt category 
management?''
[GRAPHIC] [TIFF OMITTED] TN07OC16.000

    7. Key Principles. CM applies the following key principles to 
acquire and manage an organization's common requirements in a more 
collaborative and coordinated way:
    a. Development of requirements that address the majority of common 
end-user needs through the use of data analytics, application of best 
in class practices, and understanding of both industry and end-user 
customer need;
    b. reduction in number of duplicate contract vehicles for the same, 
or similar, requirements;
    c. improvement of mission value and total cost of ownership through 
activities like better requirements definition, demand aggregation to 
reduce unit pricing where appropriate, improved asset management, and 
greater visibility of pricing, usage, and performance data;
    d. strengthened demand management practices to reduce inefficient 
buying;
    e. advancement of statutory, regulatory, and Federal policy 
objectives, such as increasing the use of small business, competition, 
strengthening sustainability and accessibility requirements, maximizing 
the use of procurement preference programs, and supporting other 
policies required by statute and the Federal Acquisition Regulation 
(FAR); and
    f. improved supplier relationship management.
    8. Strategies and Policies. Each approved level 1 core category of 
common goods and services will be led by an expert government-wide 
Category Manager (CMX) (see section 9 below) who will be responsible 
for developing strategies to drive Government-wide economy and 
efficiency in that area. Examples of strategies include, but are not 
limited to, strategic sourcing, demand management, vendor management 
and total cost management. The strategy, or combination of strategies, 
selected by the CMX will vary depending on the type of good or service, 
the market trends in that category, the Government's current and future 
demand, and the maturity level of the specific category. The CMLC must 
approve all category strategies. In addition, the CMX will continually 
review and refine strategies, as necessary, informed by experience and 
feedback from government customers, contractors, industry experts and 
other interested stakeholders.
    a. Best in class solutions. CMXs shall use the strategic planning 
process to identify best in class (BIC) sourcing solutions, which may 
involve contract solutions, demand management strategies or both.
    (1) BIC contract sourcing solution.
    (a) A BIC contract sourcing solution is one that:
    (i) Has been developed by cross-functional teams using rigorous 
requirements definition and planning processes;
    (ii) enables customers to take advantage of effective pricing 
strategies;
    (iii) follows category management principles (outlined in section 
7), including data driven demand management practices; and
    (iv) has had its performance independently validated.
    (b) To help the workforce understand the intended use of the 
contract sourcing solution, the CMX shall assign each one of the 
following two designations:
    (i) BIC preferred contract sourcing solution--This designation is 
designed to encourage, but not compel, agency use of an identified 
contract solution. The CMX must assign this designation to a BIC 
solution except where OMB has determined, after considering the 
recommendations of the CMX and CMLC, that mandatory use of the solution 
is more appropriate and in the best interest of the government.
    The CMX may require agencies to provide information and analysis, 
such as comparisons of pricing, terms and condition, or vendor 
performance, to explain when they do not use a BIC

[[Page 69863]]

preferred solution. This information can help to ensure active agency 
consideration of the preferred solution. The CMX must post instructions 
for the submission of any requested information or analysis on the 
Acquisition Gateway. The CMX should use the input received from 
agencies to inform future data analytics and strategic planning, with 
the goal of improving the solution, where appropriate, to be more 
responsive to customer needs, and to determine whether the solution may 
be suitable to serve as a mandatory solution.
    (ii) BIC mandatory contract sourcing solution--This designation is 
designed to support a Government-wide migration to a solution that is 
mature and market-proven, such as a previously designated BIC preferred 
sourcing solution with a demonstrated record of success. This 
designation must be approved by OMB. In addition, OMB will issue 
appropriate management policy that explains the agency migration 
process to the mandatory solution and provides an exception process for 
agencies to justify deviations from the mandatory policy.
    (c) To reduce contract duplication and take advantage of existing 
BIC contract sourcing solutions, agencies must take the following 
steps:
    (i) After first considering required sources of supplies and 
services, which are set forth in FAR 8.002 and FAR 8.003, and 
determining such sources do not satisfy their requirements, agencies 
must review information on the Acquisition Gateway to determine if 
there are BIC preferred or BIC mandatory contract sourcing solutions to 
address their requirements.
    (ii) If the requirement may be met by a mandatory BIC contract 
sourcing solution, agencies must review the applicable OMB management 
policy and follow the migration process or, if necessary, exception 
process to justify deviations from the policy.
    (iii) If the requirement may be met by a preferred BIC contract 
sourcing solution, the agency must determine if any information or 
analysis is required where the agency does not plan to use the 
preferred solution and follow the instructions provided by the CMX on 
the Gateway for submitting the analysis.
    (iv) If there are no BIC solutions identified on the Gateway, and 
the agency is seeking to establish a Government-wide, multi-agency or 
agency-wide vehicles, the agency must follow any policy OMB has issued 
to address the establishment of business cases.
    (d) To support the use of BIC contract sourcing solutions, and to 
facilitate awareness by the acquisition workforce, the GSA Government-
wide Program Management Office (PMO) will post information on BIC 
contract sourcing solutions on the Acquisition Gateway. In addition, 
the PMO will ensure, to the maximum extent practicable, that 
information on BIC sourcing solutions is accessible in a consistent and 
clear manner with a common look and feel that will facilitate easy 
understanding and application by the acquisition workforce. The PMO 
will work with the CMLC, OMB, CMXs and other stakeholders to provide 
templates, as necessary, to support the submission of agency 
information required in connection with a BIC preferred or mandatory 
contract sourcing solution.
    (2) BIC demand management strategy. The CMX must also use the 
strategic planning process to identify BIC demand management 
strategies. A BIC demand management strategy is one that standardizes 
requirements, specifications, or configurations, or eliminates 
inefficient purchasing and management behaviors using category 
management principles. The CMX must work with the CMLC and OMB in 
developing appropriate instructions to support agency adoption of BIC 
demand management strategies and with the GSA PMO regarding posting of 
such instructions on the Acquisition Gateway.
    (3) Other actions. In addition to leveraging existing BIC 
solutions, agencies must take the following steps to help reduce 
duplication and promote greater economy, efficiency and effectiveness.
    (a) Seek data and information--Contracting officers, program 
managers, and other acquisition officials must routinely use the 
Acquisition Gateway and other designated sources to seek data such as 
prices paid, terms and conditions, best practices, sustainability 
requirements, past performance, competition rates, small business 
goals, and other information that will help them conduct thorough 
analyses and negotiate the best deal for the taxpayer (see section 10 
below);
    (b) Share data and information--Program managers, contracting 
professionals, requiring officials, and contracting officer 
representatives must have access to relevant information and data to 
plan for and manage solutions and needs. Consistent with applicable 
law, agencies shall not enter into any contractual agreement that 
restricts the Federal Government's ability to share, within the 
Government, relevant contract costs and prices, terms and conditions, 
and other information needed to conduct adequate market research. 
Agencies should use best practices in crafting appropriate contract 
language to ensure non-proprietary pricing and terms and conditions are 
made available to other Government agencies in order to ensure 
implementation of category management principles in leveraging the 
Government's buying power.
    (c) Monitor and Measure progress--CMXs, agencies, and OMB must 
track implementation and long-term execution success through the 
assessment of metrics, including the approved Category Management 
Cross-Agency Priority Goals of savings, reduced duplication, Spend 
Under Management (SUM), and small business goals, as well as other 
relevant category measures, like green procurement goals and/or impacts 
to the small business industrial base (see section 11).
    9. Governance, Roles and Responsibilities.
    a. The Category Management Leadership Council (CMLC)--The 
Administrator for Federal Procurement Policy shall establish and chair 
a Category Management Leadership Council (CMLC) to serve as the 
governing body for category management activities conducted in 
connection with this Circular. The Council shall be comprised of 
interdisciplinary representatives from the largest buying agencies, 
including the Departments of Defense, Energy, Health and Human 
Services, Homeland Security, Veterans Affairs, the General Services 
Administration (GSA), the National Aeronautics and Space 
Administration, as well as the Small Business Administration, and other 
agencies designated by the Administrator. The government-wide CMXs and 
a representative from the Unified Shared Services Management Office in 
GSA shall participate as non-voting members along with other 
appropriate individuals identified by the Administrator. The CMLC shall 
be responsible for core implementation and execution functions, 
including:
    (1) Approval of Government-wide strategies for core categories and 
certain subcategories, as appropriate;
    (2) approval of over-arching Best in Class criteria and procedures, 
and any subsequent changes;
    (3) provide advice to OMB on recommendations by CMX to designate 
BIC contract sourcing solution as mandatory and on policy for agency 
migrations and exceptions to use of such solutions;
    (4) assessment of the performance of Government-wide strategies and 
solutions--to include small business

[[Page 69864]]

participation--(not less than annually); and
    (5) approval of any changes to the Government-wide category 
structure and governance.
    b. The Office of Federal Procurement Policy (OFPP)--The OFPP in the 
Office of Management and Budget is responsible for providing overall 
direction of Government-wide procurement policy and for promoting 
economy, efficiency, and effectiveness in all Federal procurement.\9\ 
In this role, OFPP will:
---------------------------------------------------------------------------

    \9\ OFPP Act, 41 U.S.C. 1101.
---------------------------------------------------------------------------

    (1) Set the CM strategic policy direction;
    (2) issue CM policies, guidance, instructions and directives to 
Federal agencies,\10\ in consultation with CFO Act agencies and in 
partnership with other relevant oversight offices (for example, IT 
acquisition policies co-signed by the United States Chief Information 
Officer);
---------------------------------------------------------------------------

    \10\ Policies and guidance will be posted at www.whitehouse.gov/omb/procurement. Instructions and directives will be posted on the 
Acquisition Gateway, https://hallways.cap.gsa.gov.
---------------------------------------------------------------------------

    (3) appoint CMLC members and chair the CMLC;
    (4) nominate lead agencies for each category to be the Government-
wide Category Center of Excellence (CoE), in consultation with the CMLC 
(reference CoE roles and responsibilities in this section);
    (5) review the CoE recommendations for CMXs and upon CMLC approval, 
formally designate the Government-wide CMXs;
    (6) develop reporting requirements to assess agencies' progress 
toward increasing their Spend Under Management (see section 11 below);
    (7) determine and measure supporting Cross-Agency Priority Goals or 
other Governmentwide goals and metrics; \11\ and
---------------------------------------------------------------------------

    \11\ Public Law 111-352, 1(a), Jan. 4, 2011, 124 Stat. 3866, 
GPRA Modernization Act of 2010;
---------------------------------------------------------------------------

    (8) otherwise shape and monitor the government's efforts to 
implement CM effectively.
    c. The General Services Administration (GSA)--In addition to GSA's 
general leadership role in the acquisition and management of goods and 
services across the government, the agency also serves as the 
Government-wide program management office (PMO) for category 
management. The GSA PMO for category management provides direct support 
to the CMXs, to include:
    (1) Development and management of the tools and resources to 
support CM to include the Acquisition Gateway (see section 10 below);
    (2) creation, in consultation with OMB, and maintenance of Category 
Management instructions and standard procedures;
    (3) maintain the category structure and taxonomy;
    (4) analysis of Government-wide spending data and other core 
support for all Government-wide common spend categories;
    (5) sharing training and educational materials regarding category 
management;
    (6) collaboration with Federal agencies, vendors, and other 
stakeholders to facilitate feedback on customer satisfaction on 
Government-wide common category solutions and generate ideas for 
continuous improvement; and
    (7) coordination for the delegations of procurement authority for 
Government-wide category sourcing
    The GSA voting member on the CMLC represents the interests of GSA 
as an organization, and is responsible for communicating and 
coordinating all relevant CM information to the GSA stakeholders.
    d. Center of Excellence (CoE)--The CoE is the lead agency or 
organization for each category or sub-category, which, due to its 
subject matter expertise, experience, and other category unique 
qualifications, retains the Government-wide CMX for level 1 categories, 
or level 2 and lower category leads. The OFPP, in consultation with the 
CMLC, will nominate agencies to serve as the CoE. The CoE must:
    (1) In consultation with the CMLC and OFPP, nominate a category 
subject matter expert to serve as the Government-wide CMX;
    (2) when appropriately delegated authority, serve as the executive 
agent for sourcing requirements approved in the category strategic 
plan; and
    (3) manage all aspects of the category strategic plan, including 
conducting all reviews, and obtaining all approvals required by law, 
regulation, and policy prior to awarding any Government-wide contract 
sourcing solutions.
    e. Government-wide Category Managers (CMX)--The Category CoE must 
nominate the Government-wide CMX for that category, in consultation 
with the CMLC and OFPP. CMXs serve as the Government-wide leaders that 
lead interagency teams of subject matter experts, analyze data, work 
with industry, develop and promote strategies, and drive the adoption 
of CM principles and practices throughout the Government. CMXs must 
assess customer and stakeholder satisfaction, and small business 
participation on a continuous basis to ensure efficacy of the 
strategies and solutions. Small business participation will include 
strategies to meet or exceed small business goals, including 
consideration of small business set-asides, regionalization, or easier 
access to federal contracts, on-ramp or off-ramp opportunities and 
corrective action if participation falls below expectations. The 
Government-wide CMXs will review all agency requests for exception to 
OMB CM policy and forward the requests, for information, to the 
Administrator for Federal Procurement Policy. The GSA PMO will maintain 
the current list of CMXs on the Acquisition Gateway.\12\
---------------------------------------------------------------------------

    \12\ The current list of CMX is accessible via the following 
link: https://hallways.cap.gsa.gov/faq, ``Where can I learn more 
about the government's plan to adopt category management?''
---------------------------------------------------------------------------

    f. CFO Act Agencies--The Agency's CAO or SPE is responsible for 
establishing efficient processes and policies that will ensure this 
Circular, and the principles of CM, are applied throughout their 
agency, while ensuring agency mission and small business goals are met. 
In order to drive implementation and ensure Government-wide CM 
strategies and solutions meet agency needs and are informed, the CAO or 
SPE shall:
    (1) Designate a Category Management Accountable Official (CMAO)--
The agency Chief Acquisition Officer or Senior Procurement Executive 
are most likely in the best position to assume the CMAO role, but may 
delegate operational duties as needed. Among other duties, the CMAO is 
responsible for:
    (a) Establishing processes and policies that will ensure this 
Circular and the principles of CM are applied throughout their agency;
    (b) submitting to OMB the agency's SUM analysis (see section 11) in 
accordance with section 13 below; and
    (c) coordinating with OMB, the relevant Government-wide and agency-
level CMX's, and other interested parties on category management 
issues.
    (2) Designate Agency-level Category Managers (CMX)--To better align 
the development and implementation of CM strategies, agencies must 
designate agency-level CMXs for, at a minimum, those Government-wide 
common categories that represent key areas of spend for the agency, or 
when requested by OMB or the Government-wide CMX. The agency CMXs will 
work closely with the Government-wide CMXs to develop and implement 
category-specific strategies, such as gathering agency sales and 
pricing data, and developing teams of experts. The agency-level CMX and 
will most likely be a member of the Government-wide

[[Page 69865]]

category team, led by the Government-wide CMX.
    g. Supporting Roles and Responsibilities--The CM infrastructure 
depends on the work of interagency category teams, category leads, and 
other key personnel and groups. Attachment 2 contains a depiction of 
the Federal Government's CM governance structure, including supporting 
roles.
    h. Category Teams. Category Teams are formed by the Category 
Manager and are led by either the Category Manager for Level 1 core 
categories, or a Category Lead for Level 2 or lower core subcategories. 
These teams are the primary collaborative bodies where the daily 
category management activities occur. The teams include participants 
from multiple Federal agencies, generally subject matter experts that 
understand the Government's requirements as well as the industry and 
market dynamics surrounding a category.
    i. Category Leads. Category Leads are responsible for the 
development and execution of category strategies for a single, specific 
Level 2 category. The Level 1 CoE nominates the category leads and the 
CMX approves their designation. Category leads build and lead cross-
functional Level 2 Government category teams. In consultation with the 
category manager, establish the strategic direction, lead efforts to 
gather, aggregate and analyze market, industry, supply chain, demand 
management, user profiles and other information to improve category 
performance.
    j. Other team participants. The success of CM depends on getting 
the right people to work together toward a common solution. Agencies 
are expected to support CMXs by providing team participants, either 
directly, through the GSA PMO, or at OMB's request. Team participants 
will be determined by such considerations as the magnitude of agency 
spend or access to subject matter expertise.
    Many agencies have CM and related management structures already in 
place, and they are encouraged to leverage these in identifying their 
CMAOs, agency-level CMXs, and team members, as needed.
    10. Increasing the Visibility of Data and Information--Building an 
Acquisition Gateway. Core tenets of CM are data analytics and 
information sharing. Visibility into prices paid, best practices in 
building or managing solutions/policies, and other key information are 
needed to negotiate in the best interest of the taxpayer. The central 
repository of this information is the Acquisition Gateway, which GSA 
manages in accordance with the Acquisition Gateway Community governance 
structure. GSA will develop and maintain the IT infrastructure to 
ingest, manage, and share prices paid and other data and information 
(as appropriate--refer to Section 8.d above) to avoid duplicate or 
manual data entry. CMXs, working with the CMLC and OMB, must prioritize 
areas for which Government-wide, agency-wide, and other high-
performing, BIC vehicles, including prices paid, will be made available 
via the Acquisition Gateway.
    The Acquisition Gateway will support the Federal acquisition 
workforce by housing the best practices, contracts, community and other 
tools to aid the workforce in the implementation of the category 
strategies. To ensure the Acquisition Gateway continues to meet the 
demands of the acquisition workforce in response to the implementation 
of CM, GSA will develop a process for soliciting regular feedback, 
input, and suggestions from users of the Gateway in order to maintain 
the relevance of the tool.
    11. Measuring CM Success. The Government's CM success must be 
measured through the assessment of metrics, including increasing 
savings, reducing duplication, increasing spend under management, 
achieving Government-wide small business goals, and other relevant 
measures (see section 7 above). OMB will report these metrics publicly 
as part of the Category Management Cross-Agency Priority Goal.\13\ See 
section 13 for reporting requirements.
---------------------------------------------------------------------------

    \13\ Public Law 111-352, 1(a), Jan. 4, 2011, 124 Stat. 3866, 
GPRA Modernization Act of 2010;
---------------------------------------------------------------------------

    a. Spend Under Management (SUM): SUM is an overall measure of the 
Federal Government's CM maturity, designed to highlight successes at 
both the Government-wide and agency-wide level, as well as identify 
areas for development that will bring more agency spend under 
management. SUM is the principal measure by which OMB will measure the 
adoption of CM. The SUM model provides an assessment of CM maturity for 
each of the ten Government-wide categories and the CFO Act Federal 
Agencies using a three-tiered maturity model that evaluates CM against 
five attributes: Leadership, strategy, data, tools, and metrics 
(reference attachment 3). As the government gains experience, the model 
will be updated and made available on the Acquisition Gateway, as 
needed.
    OMB will assess the 24 Agencies subject to the CFO Act on their SUM 
progress not less than annually in accordance with the requirements 
outlined in OMB Circular A-11 and associated budget guidance. Agencies' 
SUM maturity assessments will be used to engage agency leaders in 
regularly reviewing progress toward their goals. Additionally, CMXs 
will use this information to develop strategies to bring more agency 
dollars within their category under management.
    b. Small Business: Increasing the participation of small businesses 
in the government's CM initiative is a top priority. Proposed solutions 
must baseline small business use under current strategies and set goals 
to meet or exceed that baseline participation under any new solutions. 
The CMLC will review each proposed strategy to ensure competitive small 
businesses have a high degree of participation to the maximum extent 
practicable, and will monitor actual small business participation by 
category. In developing strategies, CMXs will comply with the small 
business reservation requirement for purchases between the micro-
purchase threshold and the simplified acquisition threshold, increase 
access to Federal procurement opportunities for small businesses, and 
use all authorities available to maximize small business participation. 
CMXs will take corrective action if participation falls below 
expectations.
    c. Savings: Savings in Category Management refer to reductions in 
cost that allow the Federal Government to make better use of resources. 
Savings generally can be derived from three principles: (1) Reduced 
unit prices based on increased volume or other strategy; (2) changes in 
behavior resulting from improved commodity management and access to 
data/information; and (3) administrative savings, e.g., based on 
reducing the number of duplicative vehicles. OMB will review agency 
savings figures in the context of instructions given by the CMLC to 
ensure consistent savings principles are applied in these estimates.
    12. Workforce Category Management Training. Successful 
implementation of CM is dependent upon the acquisition workforce, 
including program managers, contracting professionals, requirements 
owners, contracting officer's representatives and other Federal 
officials involved in meeting mission needs. These critical members of 
the Federal workforce need the right training, tools, and information 
to enable effective CM execution as required in this Circular. Agencies 
should consider including CM competencies in CM stakeholders' 
Individual Development Plan, as

[[Page 69866]]

appropriate. To support the workforce, the Federal Acquisition 
Institute and Defense Acquisition University, in collaboration with 
GSA's CM PMO, will develop CM competencies for various levels and 
functional areas, as directed by OFPP in coordination with the 
Secretary of Defense.
    13. Reports to OMB. Each of the Government-wide CMXs must submit 
quarterly reports to be shared via the Acquisition Gateway. These 
reports will include, at a minimum, savings, reduced duplication, SUM 
(which might not apply quarterly), small business participation, and 
any other category-specific metrics that OMB requires. OFPP may adjust 
this cadence and these requirements as needed.
    Agencies must provide contact information for the CMAO and the 
agency CMXs to the GSA PMO at (insert generic email box) and provide 
updates as personnel change. While Agencies that are not subject to the 
CFO Act are not required to have identified CMAOs, they are encouraged 
to identify accountable officials who can increase the use of existing 
contracts, contribute subject matter experts, and drive the adoption of 
CM principles in their agencies.
    14. Effective date and implementation. October 1, 2016.
    15. Inquiries. OFPP staff TBD.
Attachments
1. Government-wide Category Structure
2. Category Management Governance Structure
3. Spend Under Management (SUM)
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[FR Doc. 2016-24054 Filed 10-6-16; 8:45 am]
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