OMB Moves to Further Consolidate Federal Procurement, New Memo Says

The Office of Management and Budget (OMB) has released new guidance to further consolidate how the federal government purchases common goods and services. In a move aimed at cutting duplication and maximizing taxpayer value, OMB on Tuesday issued Memo M-25-31, Consolidating Federal Procurement Activities, which outlines steps for agencies to centralize acquisition efforts through the General Services Administration (GSA).

The directive implements Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, signed by President Donald J. Trump on March 20, 2025. That order set in motion a government-wide shift toward more unified buying strategies, particularly for commonly used commercial products and services.

The memo mandates four major changes to the federal procurement landscape:

1. Government-Wide First: Agencies have to use existing GSA or other government-wide contracts before launching new ones, unless they can justify an exception. FAR 8.004 will be updated to require this within 60 days.
2. Leverage Category Management: GSA will coordinate with federal category managers to identify high-usage spend categories and recommend where consolidation makes sense, aiming for mandatory government-wide contracts in high-impact areas.
3. GSA-Centric Procurement Functions: GSA will continue absorbing procurement functions for common goods and services, but agencies must propose what they’ll shift within 60 days, and GSA must deliver a plan within 90 days.
4. Accountability: New centralized contracts will include clear performance metrics, SLAs, and ongoing monitoring. GSA must recoup costs transparently.

The memo begins:

On March 20, 2025, President Donald J. Trump issued Executive Order 14240, Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, to ensure common goods and services are acquired in the most efficient and effective manner possible for the American taxpayer. The order directs a series of actions to consolidate domestic Federal procurement of common goods and services in the General Services Administration (GSA) to eliminate waste and duplication while enabling agencies to focus on their core mission of delivering the best possible services for the American people.

The Appendix to this memorandum provides guidance to support the successful implementation of the Executive Order and optimization of contract value through smart, aggressive consolidation of buying activities for common goods and services. The activities are focused on two workstreams: (1) increased agency use of centralized contracts managed by GSA, especially for widely available commercial products and basic services, and (2) centralization in GSA of procurement functions currently decentralized across departments and agencies whenever such centralization promotes greater economy and efficiency.

Agencies should work proactively with GSA and 0MB to implement these workstreams and fully leverage GSA’s expertise and statutory role as the Federal Government’s core buyer for addressing prevalent and repetitive needs.

Read the full memo here.

(AI was used in part to facilitate this article.)