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A Wolf in Sheep’s Clothing: Category Management

Wednesday, November 9, 2016  
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A Wolf in Sheep’s Clothing: Category Management

By: Debbie Kobrin, WIPP Government Relations

 

Once again the federal government has sought to push a new policy out the door without industry input. With less than 71 days left in office, President Obama is running out of time to complete his agenda.  On the list is a new proposed government-wide policy for buying that harms small business called Category Management.   

 

While this title sounds bland and innocuous, this new policy has wide-ranging implications for federal contractors. Earlier this week, WIPP submitted comments on a proposed OMB policy to make Category Management permanent. Category Management is the latest iteration of federal contract consolidation, following the Federal Strategic Sourcing Initiative (FSSI) another acquisition initiative which has harmed small businesses. WIPP has consistently raised concerns around categorizing diverse solutions into narrow groups under FSSI. Category Management builds on this failed strategy by including more than a single contract as strategic sourcing did, however it will still limit the ability for women-owned businesses to bring their innovations and services to the federal market by favoring a few specific contracts for specified spending categories.

 

At WIPP, we know that women entrepreneurs continue to fight for access to federal contracts at both the prime and subcontracting levels. While the federal government recently reached its 5% goal of prime contracts awarded to women, there is still much progress to be made. A Commerce Department report from earlier this year, showed women-owned firms still face an uphill battle.

 

Acquisition policies like FSSI and Category Management risk eroding our nation’s industrial base by maximizing short-term savings through large contract vehicles. To take a closer look at larger contracts, WIPP released a report titled Do Not Enter: Women Shut Out of U.S. Government’s Biggest Contracts. The analysis of 19 of the largest multiple-award contracts found that 12 contracts contained requirements that ensure only certain socio-economic groups have contract access, and only a quarter of the contracts included a requirement for women-owned firms. In short, these favored mega contracts pick favorites among small businesses, locking most of them out of the contract for 5-10 years.

 

Category Management continues the Obama Administration’s trend to further consolidate contracting and inappropriately restrict competition. Further use of Category Management practices would reverse the progress women business owners have experienced through implementation of the WOSB procurement program, by making it harder to compete in the federal market.

 

While WIPP supports efforts to streamline federal acquisition, this proposed circular does not contain enough small business protections. Making Category Management permanent in the 11th hour of the Administration would be done at the expense of our nation’s biggest job creators- small businesses. Just in case you were wondering, a Circular preempts the public comment period afforded most regulatory changes. That means it is imperative organizations like WIPP sound the drumbeat for a thoughtful review of this idea before further restricting women’s access to federal contracts. WIPP’s full comments can be found here.


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