Moving billions of dollars' worth of contracts into the General Services Administration could create workload challenges as the federal agency navigates staffing cuts.
President Donald Trump wants federal IT, goods and services contracts consolidated within one federal agency. Yet complex procurement processes and agency staff cuts could make the effort to centralize difficult.
Trump signed an executive order to consolidate federal procurement within the U.S. General Services Administration (GSA), an agency that contracts and purchases goods, services and technology for the federal government.
The Trump administration said the federal government spends roughly $490 billion annually on federal contracts for goods and services, primarily purchased by individual departments and agencies. According to the order, the administration wants to return GSA to its original mandate of procuring government goods and services in a centralized fashion rather than allowing multiple agencies to initiate their own contracts. Going forward, GSA will be charged with identifying and eliminating duplicate contracts and finding other redundancies in government procurement.
The question is whether GSA will be able to handle a substantially increased workload as it takes over more federal procurement contracts for goods, services and IT, said Alan Pelz-Sharpe, founder of Deep Analysis.
One has to hope the GSA has a detailed and incredibly efficient plan to absorb all the new work and manage the change.
Alan Pelz-SharpeFounder, Deep Analysis
"Procurement processes are complex, and in some cases, contracts have been running for decades," Pelz-Sharpe said. "One has to hope the GSA has a detailed and incredibly efficient plan to absorb all the new work and manage the change."
GSA will face workload challenge
Pelz-Sharpe said centralizing IT procurement processes to reduce duplication and redundancy "makes sense." However, he questioned how shifting federal IT contracts and procurement processes under GSA control will work.
"The obvious big unanswered questions are, what happens to all the non-GSA contracts moving forward, and what impact will this move have on highly specialized procurement procedures, like defense or intelligence needs, that have assumed the need for highly specialized procurement expertise?" Pelz-Sharpe said.
Indeed, part of the challenge facing GSA is that the agency is assessing staff cuts as part of the Department of Government Efficiency's effort to reduce the size of federal agencies and departments. With a bigger workload ahead of it, it's questionable that the agency will be able to handle new contracts at speed, said Deniece Peterson, senior director of federal market analysis at Deltek. She described Trump's order, released on March 20, as one of the most important for federal IT contracting.
The scope and scale of federal IT contracts will make it an extreme challenge for GSA, Peterson said. IT will be affected as both a common good and service and through government-wide IT acquisition contracts. In fiscal year 2024, GSA managed a little more than $12 billion worth of government-wide IT acquisition contracts, she said. Non-GSA IT contract volume totaled about $15 billion.
"GSA would be more than doubling the volume that they would be responsible for," Peterson said. "The feasibility really comes down to how they choose to implement this."
The order gives GSA leeway to defer or decline IT contracts to ensure continuity of service. However, that option doesn't appear to be how the administration is leaning, Peterson said. Also, even without the workforce challenges facing the federal government amid layoffs and cuts, moving billions of dollars' worth of federal IT contracts to GSA would be fundamentally troublesome, she added.
Peterson said GSA used to have ownership over federal IT contracting before problems with speed and customer service prompted other agencies to start taking over their own federal IT contracts in the mid-2000s.
"There's a reason why these big-agency, multiple-award contracts became a thing," she said. "The issues then could be the issues now."
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
