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Category Management in Federal Procurement

Then, Now, and What It Means for Contractors.

Category Management has been hailed as the “Holy Grail” of federal procurement—an ambitious effort launched in 2014 to streamline how the federal government buys goods and services. It promised to eliminate redundancies, reduce costs, and boost efficiency.

But nearly a decade in, federal contractors are still asking:

Has Category Management delivered on its promise, or has it simply shifted the barriers without solving the core problems?

Let’s break it down—what’s historical, what’s current, and what’s no longer serving the contracting community.

The Origins

Efficiency Overhaul in the Obama Era.

Category Management was introduced to streamline federal procurement by organizing purchases into logical product and service categories. This initiative, spearheaded by the Office of Management and Budget (OMB), the General Services Administration (GSA), and the Category Management Leadership Council (CMLC), aims to enhance efficiency and consistency in federal spending.

At the heart of Category Management is the Best-in-Class (BIC) designation, which is intended to identify preferred government-wide contract vehicles. However, from the outset, the BICs were plagued by ambiguity, lacking a clear definition in the Federal Acquisition Regulation (FAR) and consistent selection criteria. This lack of clarity left many industry stakeholders uncertain about how to qualify for the designation or whether they would have an opportunity to compete for business.

By FY19, Category Management had gained significant traction, with agencies being held accountable for routing substantial portions of their “BIC-addressable” spending through the designated vehicles. Major contracts, such as GSA’s Enterprise Infrastructure Solutions (EIS) and DISA’s Defense Enterprise Office Solutions (DEOS), became prominent examples of this initiative.

Despite these advancements, contractors quickly identified several persistent challenges:

  1. Undefined BIC Criteria: The absence of a FAR-based definition for BICs created confusion regarding qualification.
  2. Limited Transparency: There was insufficient clarity on how contracts obtained the BIC designation, which hindered competition and trust among contractors.
  3. Irregular On-Ramping Opportunities: The lack of consistent opportunities for new vendors to enter these contracts created barriers for many companies.
  4. Vendor Consolidation: The procurement strategy often favored larger firms, squeezing out small and mid-tier vendors, which are vital for fostering innovation in the market.

The Implementations

Shift from Optional to Expectation.

Category Management has significantly evolved from its initial role as a theoretical procurement strategy into a foundational element shaping the federal contracting landscape. Initially promising increased efficiency and value, it has transformed into a complex framework of mandates and ever-changing policies. This evolving landscape presents opportunities and challenges for government contractors, particularly small and emerging businesses seeking to maintain competitiveness.

Nearly a decade after its implementation, Category Management is now a critical component of federal acquisition policy. However, it is not without its controversies. While the data indicates widespread adoption, the experiences of vendors—especially those from small and mid-tier firms—reveal a more nuanced reality.

Refinement and Expansion Under Biden

The Biden Administration expanded Category Management through the President’s Management Agenda, reinforcing Category Management’s role while emphasizing equity in contracting and small business inclusion. Key developments included:

Increased Spend Under Management (SUM).

By the end of FY24, $384 billion of the government’s contract obligations—representing 78.5% of total obligations—met the OMB criteria for SUM. This marks a substantial increase from $225 billion (56.4%) in 2020.

Alignment with Socioeconomic Goals.

OMB revised guidance to ensure that Category Management practices supported the Administration’s equity objectives. A notable change was the introduction of a new Tier 2-Socioeconomic Small Business SUM measure, granting agencies automatic credit toward Category Management goals for awards made to certified socioeconomic small businesses. This adjustment aimed to balance the use of BIC contracts with the need to diversify the federal supplier base.

Agency-Specific Initiatives.

The U.S. Air Force implemented the FIRST LOOK program, leveraging Category Management best practices to provide local small businesses with priority access to micro-purchase threshold requirements. This initiative demonstrated how Category Management could be tailored to lower barriers and enhance opportunities for small businesses at the agency level. ​

But beneath the surface, friction continued:

Disparities in BIC Utilization.

While the government achieved a 13.6% utilization rate of BIC contracts in 2024, agency adoption varied significantly. For instance, the Small Business Administration (SBA) directed 45.6% of its contract spending through BICs, whereas the Department of Energy (DOE) utilized BIC vehicles for only 1% of its obligations. Such disparities highlight inconsistencies in Category Management implementation across agencies.

Increased Protests.

Between FY22 and FY23, protests rose by 22%, largely due to issues with GWACs like CIO-SP4. Other mega BIC-contracts like Polaris and OASIS+ suffered from delays and mass protests.

Decline in the Small Business Industrial Base.

Despite achieving overall small business contracting goals, the number of small businesses participating in federal contracting has declined by about 10% over the past decade.

Key Metrics

  • Average BIC task order size: $610,000, a 147% increase over five years
  • As of December 2024, OMB had designated 40 acquisition vehicles as BIC, covering a range of products and services from office supplies to IT solutions
  • In FY24, $66 billion (13.6%) of total contract spending, was directed toward BIC contracts (the first year since 2020 that the government met its BIC spending targets)
  • By the end of FY24, $384 billion of federal contract obligations met OMB’s criteria for SUM, indicating a substantial shift towards centralized procurement strategies
  • Federal agencies reported $16.7 billion in cost avoidance through Category Management practices, exceeding the annual goal by nearly 29% in FY24

The Statuses

Centralized and Strategic, But Not Without Friction.

Metrics show performance—but they also reveal systemic inequities. Understanding the reality of how Category Management has been implemented is essential for deciding where and how to invest resources moving forward.

The Promise of Agile Access to Contracts.

The early promise that Category Management and BICs would “level the playing field” has faded. Today, access is largely limited to those already on long-term vehicles—many of which lack on-ramps or set-aside safeguards for small businesses.

Inflated Performance Metrics.

There are major concerns about “double counting” small business dollars—where a single contract is counted toward multiple small business categories. This paints a rosier picture than what the data really supports and obscures the shrinking industrial base.

E-Commerce Modernization Hasn’t Solved Everything.

The GSA’s push for a Commercial e-Commerce Portal (e.g., Amazon, Overstock) aims to modernize micro-purchasing, but it introduces another intermediary layer. It’s unclear if this supports—or hinders—fair competition, especially for niche or new entrants.

Effect on Mergers and Acquisitions (M&A).

Contract portfolios with BIC access are now highly valuable. M&A activity is increasingly driven by “vehicle valuation,” and novation rules (under FAR 42.12) are under scrutiny as companies try to buy their way into BICs.

Key Realities

  • There is still no formal FAR definition for what constitutes a BIC vehicle
  • Vehicles often have 10-year periods of performance with few or no on-ramp opportunities—leaving many capable businesses locked out for a decade or more
  • The federal push toward Category Management has created a procurement environment where:
    • Agencies prioritize a handful of consolidated vehicles.
    • Opportunities increasingly go through large, pre-approved contract vehicles with steep entry requirements.
    • Emerging contractors and small firms face disproportionately high barriers to entry and fewer paths to organic growth.

The Developments

Trump 2.0 and the Push Toward Consolidation.

This year, the return of President Donald Trump has marked a sharp pivot in procurement policy. A series of Executive Orders and OMB memos have rewritten much of the Category Management landscape.

Consolidation of Federal Procurement

On March 20, 2025, President Donald Trump issued the executive order titled “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement.” This order mandates GSA to centralize the procurement of common goods and services across federal agencies, aiming to reduce waste and duplication. Agencies are required to collaborate with GSA to transfer procurement responsibilities for specified categories.

Rescission of Prior Regulatory Policies

Upon taking office in January 2025, President Trump rescinded several executive orders from previous administrations that had shaped federal procurement and category management practices. Notably, Executive Order 13992, signed by President Joe Biden on January 20, 2021, which revoked certain federal regulation executive orders from the prior Trump administration, was itself rescinded by President Trump in 2025. ​

Implementation of Executive Orders

In March 2025, OMB released memoranda such as M-25-17 and M-25-16, focusing on the implementation of executive orders addressing risks associated with specific law firms and evaluating federal government contracts. These memoranda reflect the administration’s emphasis on scrutinizing and potentially restructuring existing contracts to align with new policy directions.

Regulatory Freeze and Review

On January 20, 2025, OMB issued M-25-10, implementing a regulatory freeze. This action temporarily paused all activities related to obligations or disbursements of federal financial assistance, allowing the administration to review existing programs and ensure alignment with its priorities.

 

Key Impacts

  • Job security concerns have spiked among acquisition personnel
  • Government contractors are facing even fewer decentralized buying opportunities
  • GSA’s growing control means the rules of engagement are changing fast—with winners and losers often determined by portfolio access, not capabilities
  • Imposed a regulatory freeze and launched a contract restructuring review

The Pivots

A Strategic Tool at a Crossroads.

The evolution of Category Management, characterized by consolidation, centralization, and policy changes, requires government contractors to adapt quickly and strategically. Category Management is no longer just a recommended practice; it is becoming a regulatory requirement.

Whether you are a seasoned vendor or a newcomer to government contracting, grasping the Category Management landscape—from its original purpose to the projected realities post-2025—is not just important but crucial for your survival and growth. This understanding will keep you informed and prepared for the changes ahead.

Know the Rules.

Study which BIC vehicles align with your service offerings. Understand GSA’s expanding role and the impact of 2025 policy shifts on your capture strategy.

Track GSA’s Movements.

Monitor changes to GSA-run e-commerce platforms, SUM targets, and vehicle consolidation announcements. Be ready to respond to RFIs, draft RFPs, and market research notices quickly.

Reassess Your Teaming and M&A Strategy.

Vehicle ownership is currency. Strategic partnerships or acquisitions may be the only way into key BICs—especially under the novation restrictions governed by FAR 42.12.