How Donald Trump is Overhauling Federal Procurement
The US federal government is set to undergo a significant procurement transformation, with the General Services Administration (GSA) positioned to become the central hub for domestic government purchasing.
A landmark executive order signed by US President Donald Trump on 20 March aims to rationalise and streamline the US$490bn annual federal contracting landscape.
Tackling fragmentation and inefficiency
Titled Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, President Trump's order labels the existing procurement ecosystem as fragmented and inefficient.
The document states: "It is time to return the General Services Administration to its original purpose, rather than continuing to have multiple agencies and agency subcomponents separately carry out these same functions in an uncoordinated and less economical fashion."
Agencies will need to move quickly to comply with the new directive. Within 60 days, agency heads must submit proposals to the GSA Administrator for consolidating procurement of common goods and services. The GSA Administrator is then required to develop a comprehensive plan within 90 days, detailing how procurement will be conducted across domestic government components.
A notable aspect of the order is the specific attention to information technology procurement. The Office of Management and Budget (OMB) will designate the GSA Administrator as the executive agent for government-wide IT acquisition contracts, with a mandate to "rationalise government-wide indefinite delivery contract vehicles" and eliminate redundancies.
The government believes that centralising procurement will lead to significant cost savings and improved efficiency. The executive order notes that the federal government is "the largest buyer of goods and services in the world," making the potential for optimisation substantial.
Trump's order includes important provisions ensuring that the consolidation will not impair existing departmental authorities and will be implemented "consistent with applicable law and subject to the availability of appropriations".
Procurement managers across federal agencies should prepare for substantial changes in how common goods and services are purchased. Collaboration with the GSA and proactive proposal development will be crucial in the coming months.
Trump and procurement
Since taking office in January, President Trump has had quite an impact on the sector, from implementing tariffs to transforming domestic government purchasing.
So far, he has implemented a 25% tariff on all steel and aluminium entering the US and threatened to raise the tax on Canada after Ontario Premier Doug Ford announced a 25% surcharge on US-bound electricity.
Trump also threatened a potential 200% tariff on EU alcohol, potentially reshaping international trade relations and the procurement landscape.
Additionally, he signed an order to end the procurement and "forced use" of paper straws. An announcement on the White House's website outlines how the federal government is being directed to stop purchasing paper straws and ensure they are no longer provided within federal buildings.
Explore the latest edition of Procurement Magazine and be part of the conversation at our global conference series, Procurement & Supply Chain LIVE.
Discover all our upcoming events and secure your tickets today.
Procurement Magazine is a BizClik brand.