Buying as One: Category Management Lessons From the United Kingdom

Submitted by on Wed, 02/20/2019 - 08:00
Reports
PDF icon Buying as One.pdf
Anne Laurent
The federal government spends about $500 billion a year on goods and services. More than half of this amount is for goods and services common across federal agencies, such as training, overnight delivery services, copier machines, and travel services. However, these common items are often purchased individually by more than 3,300 buying offices and over 40,000 contracting officers. As a result, the federal government does not leverage its buying power as a large customer, and vendors are constantly bidding on redundant work.

A purchasing strategy adopted by the private sector three decades ago, called category management, organizes the spending on common goods and services across the enterprise into defined categories, such as travel or commercial software, from the same or similar supplier base.

The United Kingdom began its category management initiative in 2010 and its greater maturity offers some useful lessons to the U.S. government’s more recent efforts on how to increase the adoption rate and avoid potential missteps. By “buying as one,” the Office of Management and Budget projects that the federal government can avoid up to $18 billion in unnecessary spending by 2020, but commercial experience and the experience of the United Kingdom suggests it could be significantly more.

The report contains insights based on the U.K. government’s implementation efforts and offers recommendations to the U.S. and other governments that may help accelerate or expand their efforts.

Read our blog on the report.

Read the article in GovernmentExecutive on the report.

View our infographic on the report.