President Trump’s March 20 executive order “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement” has major ramifications for GovCons. It will drastically change government acquisition by making the General Services Administration the lead for domestic federal procurement for common goods and services.
The executive order affects the use of government-wide acquisition contracts, or GWACs. By making GSA responsible for guiding the acquisition of common goods and services, the federal government is trying to optimize its spending and improve services delivery, according to the law firm Holland & Knight.
The U.S. spends roughly $490 billion per year on common goods and services via federal contracts. GSA was created in 1949 via the Federal Property and Administrative Services Act to bring an “economical and efficient system” for bedrock procurement services for agencies. GSA, in this role, has managed the Federal Supply Schedules program and created other GWACs, such as Alliant, VETS, OASIS and 8(a) STARS vehicles.
But other agencies have created their own GWACs over the years, such as the NASA Solutions for Enterprise-Wide Procurement vehicle. The executive order directs NASA and other agencies that created their own GWACs to discontinue their vehicles.
Ensure you’re up to date with the latest developments in government contracting. Subscribe to Executive Mosaic’s suite of newsletters for unparalleled insights. Get major contract awards and M&A updates from GovCon Wire, key federal agency news and policy developments from ExecutiveGov and in-depth industry analysis and executive insights from ExecutiveBiz. All from Executive Mosaic.
What Common Goods and Services Are Covered?
The executive order applies to all agencies other than the Executive Office of the President, including DOD and independent regulatory agencies, according to the law firm Miller & Chevalier. These “common goods and services” cover these categories:
- Professional services: Financial, legal, marketing, research and development and business administration services
- IT: Hardware, software, consulting and telecommunications
- Transportation and logistics: Fuel, vehicles, logistics support, transportation and delivery
This executive order brings challenges and opportunities for GovCons. They will have to navigate a more centralized acquisition apparatus that requires better agility, more rigorous compliance and smarter market positioning, according to the law firm Coley.
Will the Executive Order Impact Small GovCons?
The executive order could make it more difficult for small GovCon businesses. The federal government typically has reserved a large number of contracts, many for common goods and services, for awards to small businesses. But this consolidation of procurement functions in GSA could result in reduced government purchases, overall, but with larger individual contract values, according to the law firm Cooley.
GovCons have time to prepare for the ramifications from this executive order as significant changes to the contracting process probably won’t be impactful until the end of 2025. This is because the executive order provides GSA 90 days to create and provide to the Office of Management and Budget a “comprehensive plan” to procure common goods and services across the domestic components of the federal government.
The plan would likely receive some minor modifications, at the minimum, which could require further coordination with individual agencies and a revised plan for OMB to review.
Are you subscribed to our newsletters? They’re the premier sources for GovCon professionals looking for an edge in this competitive marketplace. Get the latest contract awards and M&A moves from GovCon Wire, critical federal agency updates from ExecutiveGov and expert industry analysis from ExecutiveBiz — all in one place. Only from Executive Mosaic — Where We Connect Executives.
