81 FR 69860 - Category Management

OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy

Federal Register Volume 81, Issue 195 (October 7, 2016)

Page Range		69860-69871
FR Document		2016-24054
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.
Federal Register, Volume 81 Issue 195 (Friday, October 7, 2016)
[Federal Register Volume 81, Number 195 (Friday, October 7, 2016)]
[Notices]
[Pages 69860-69871]
From the Federal Register Online  [www.thefederalregister.org]
[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.
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    \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.
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    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\
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    \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:
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    \9\ OFPP Act, 41 U.S.C. 1101.
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    (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);
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    \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.
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    (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
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    \11\ Public Law 111-352, 1(a), Jan. 4, 2011, 124 Stat. 3866, 
GPRA Modernization Act of 2010;
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    (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\
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    \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?''
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    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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69864 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices

participation—(not less than annually); Management instructions and standard strategies to meet or exceed small
and procedures; business goals, including consideration
(5) approval of any changes to the (3) maintain the category structure of small business set-asides,
Government-wide category structure and taxonomy; regionalization, or easier access to
and governance. (4) analysis of Government-wide federal contracts, on-ramp or off-ramp
b. The Office of Federal Procurement spending data and other core support opportunities and corrective action if
Policy (OFPP)—The OFPP in the Office for all Government-wide common spend participation falls below expectations.
of Management and Budget is categories; The Government-wide CMXs will
responsible for providing overall (5) sharing training and educational review all agency requests for exception
direction of Government-wide materials regarding category to OMB CM policy and forward the
procurement policy and for promoting management; requests, for information, to the
economy, efficiency, and effectiveness (6) collaboration with Federal Administrator for Federal Procurement
in all Federal procurement.9 In this role, agencies, vendors, and other Policy. The GSA PMO will maintain the
OFPP will: stakeholders to facilitate feedback on current list of CMXs on the Acquisition
(1) Set the CM strategic policy customer satisfaction on Government- Gateway.12
direction; wide common category solutions and f. CFO Act Agencies—The Agency’s
(2) issue CM policies, guidance, generate ideas for continuous CAO or SPE is responsible for
instructions and directives to Federal improvement; and establishing efficient processes and
agencies,10 in consultation with CFO (7) coordination for the delegations of policies that will ensure this Circular,
Act agencies and in partnership with procurement authority for Government- and the principles of CM, are applied
other relevant oversight offices (for wide category sourcing throughout their agency, while ensuring
example, IT acquisition policies co- The GSA voting member on the CMLC agency mission and small business goals
signed by the United States Chief represents the interests of GSA as an are met. In order to drive
Information Officer); organization, and is responsible for
(3) appoint CMLC members and chair implementation and ensure
communicating and coordinating all Government-wide CM strategies and
the CMLC; relevant CM information to the GSA
(4) nominate lead agencies for each solutions meet agency needs and are
stakeholders. informed, the CAO or SPE shall:
category to be the Government-wide d. Center of Excellence (CoE)—The
Category Center of Excellence (CoE), in (1) Designate a Category Management
CoE is the lead agency or organization
consultation with the CMLC (reference Accountable Official (CMAO)—The
for each category or sub-category,
CoE roles and responsibilities in this agency Chief Acquisition Officer or
which, due to its subject matter
section); Senior Procurement Executive are most
expertise, experience, and other
(5) review the CoE recommendations likely in the best position to assume the
category unique qualifications, retains
for CMXs and upon CMLC approval, CMAO role, but may delegate
the Government-wide CMX for level 1
formally designate the Government- operational duties as needed. Among
categories, or level 2 and lower category
wide CMXs; other duties, the CMAO is responsible
leads. The OFPP, in consultation with
(6) develop reporting requirements to for:
the CMLC, will nominate agencies to (a) Establishing processes and policies
assess agencies’ progress toward serve as the CoE. The CoE must:
increasing their Spend Under that will ensure this Circular and the
(1) In consultation with the CMLC
Management (see section 11 below); principles of CM are applied throughout
and OFPP, nominate a category subject
(7) determine and measure supporting their agency;
matter expert to serve as the
Cross-Agency Priority Goals or other (b) submitting to OMB the agency’s
Government-wide CMX;
Governmentwide goals and metrics; 11 (2) when appropriately delegated SUM analysis (see section 11) in
and authority, serve as the executive agent accordance with section 13 below; and
(8) otherwise shape and monitor the (c) coordinating with OMB, the
for sourcing requirements approved in
government’s efforts to implement CM relevant Government-wide and agency-
the category strategic plan; and
effectively. (3) manage all aspects of the category level CMX’s, and other interested
c. The General Services parties on category management issues.
strategic plan, including conducting all
Administration (GSA)—In addition to (2) Designate Agency-level Category
reviews, and obtaining all approvals
GSA’s general leadership role in the Managers (CMX)—To better align the
required by law, regulation, and policy
acquisition and management of goods development and implementation of CM
prior to awarding any Government-wide
and services across the government, the strategies, agencies must designate
agency also serves as the Government- contract sourcing solutions.
e. Government-wide Category agency-level CMXs for, at a minimum,
wide program management office (PMO) those Government-wide common
Managers (CMX)—The Category CoE
for category management. The GSA categories that represent key areas of
must nominate the Government-wide
PMO for category management provides spend for the agency, or when requested
CMX for that category, in consultation
direct support to the CMXs, to include: by OMB or the Government-wide CMX.
(1) Development and management of with the CMLC and OFPP. CMXs serve
as the Government-wide leaders that The agency CMXs will work closely
the tools and resources to support CM with the Government-wide CMXs to
to include the Acquisition Gateway (see lead interagency teams of subject matter
experts, analyze data, work with develop and implement category-
section 10 below); specific strategies, such as gathering
(2) creation, in consultation with industry, develop and promote
strategies, and drive the adoption of CM agency sales and pricing data, and
mstockstill on DSK3G9T082PROD with NOTICES

OMB, and maintenance of Category developing teams of experts. The
principles and practices throughout the
9 OFPP Government. CMXs must assess agency-level CMX and will most likely
Act, 41 U.S.C. 1101.
10 Policiesand guidance will be posted at customer and stakeholder satisfaction, be a member of the Government-wide
www.whitehouse.gov/omb/procurement. and small business participation on a
Instructions and directives will be posted on the 12 The current list of CMX is accessible via the

Acquisition Gateway, https://hallways.cap.gsa.gov. continuous basis to ensure efficacy of following link: https://hallways.cap.gsa.gov/faq,
11 Public Law 111–352, 1(a), Jan. 4, 2011, 124 the strategies and solutions. Small ‘‘Where can I learn more about the government’s
Stat. 3866, GPRA Modernization Act of 2010; business participation will include plan to adopt category management?’’

VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1
$69866 Federal Register / Vol. 81, No. 195 / Friday, October 7, 2016 / Notices appropriate. To support the workforce, not apply quarterly), small business the use of existing contracts, contribute the Federal Acquisition Institute and participation, and any other category- subject matter experts, and drive the Defense Acquisition University, in specific metrics that OMB requires. adoption of CM principles in their collaboration with GSA’s CM PMO, will OFPP may adjust this cadence and these agencies. develop CM competencies for various requirements as needed. 14. Effective date and levels and functional areas, as directed Agencies must provide contact implementation. October 1, 2016. by OFPP in coordination with the information for the CMAO and the 15. Inquiries. OFPP staff TBD. Secretary of Defense. agency CMXs to the GSA PMO at (insert Attachments 13. Reports to OMB. Each of the generic email box) and provide updates Government-wide CMXs must submit as personnel change. While Agencies 1. Government-wide Category Structure quarterly reports to be shared via the that are not subject to the CFO Act are 2. Category Management Governance Acquisition Gateway. These reports will not required to have identified CMAOs, Structure include, at a minimum, savings, they are encouraged to identify 3. Spend Under Management (SUM) reduced duplication, SUM (which might accountable officials who can increase BILLING CODE P mstockstill on DSK3G9T082PROD with NOTICES VerDate Sep<11>2014 17:36 Oct 06, 2016 Jkt 241001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1$
Document Created: 2018-02-13 16:32:15
Document Modified: 2018-02-13 16:32:15
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed new Office of Management and Budget Circular No. A- XXX, ``Implementing Category Management for Common Goods and Services.''
Dates		Interested parties should submit comments in writing to the
Contact		Darbi Dillon, Office of Federal Procurement Policy, 1800 G Street NW., Washington, DC 20006, at 202- 395-1008.
FR Citation		81 FR 69860
81 FR 69860 - Category Management

OFFICE OF MANAGEMENT AND BUDGETOffice of Federal Procurement Policy

Federal Register Volume 81, Issue 195 (October 7, 2016)

OFFICE OF MANAGEMENT AND BUDGET
Office of Federal Procurement Policy
