CONTRACT CONSOLIDATION IS REAL AS OMB DIRECTS AGENCIES TO USE ONLY DOD CONTRACT FOR SHIPPING
We’ve spoken often about Category Management and the Trump Administration’s desire to eliminate duplication. Lest anyone doubt that these efforts are real, OMB issued a memorandum last week directing all federal agencies to use a new DOD contract, even though it technically won’t start until October 1st, for all package shipping. This could well be the first “shot across the bow” at trying to mandate the use of only certain contact vehicles in each market segment. GSA has long had contracts with several package shipping companies and, as with other contracts, the agency has sought deep discounts to reflect multi-agency use. The agency, however, deemed the DOD Next Generation Delivery Services contract to be “best in class” and will apparently direct other agencies to use that contract. Make no mistake: the effort to consolidate contract use will not end with this one example. Redundant, disparate contracts that cannot meet the best in class standard will either be ended or will atrophy in favor of those that are deemed better. The implications for existing contracts could be substantial, but an even greater impact will be on future multiple award contracts. Contractors should definitely think twice about bidding on any new vehicle. Without a best in class designation the money and effort to obtain such a contract would be difficult to justify.