The Biden-Harris Administration has introduced the Better Contracting Initiative (BCI) as the next phase of its enterprise approach to federal procurement. This four-pronged initiative ensures better terms, prices, and vendor selection when the government purchases goods and services. The administration recognizes the importance of efficient procurement in delivering for the American people, especially given the substantial annual spending of $700 billion on goods and services.
Historically, federal agencies have often paid inconsistent and inflated prices compared to market rates. The BCI builds on previous efforts by the Obama-Biden Administration, which resulted in significant cost savings for taxpayers. With increasingly constrained fiscal resources, the BCI seeks to generate over $10 billion in annual savings and cost avoidance while improving contract performance.
Better Contracting Initiative (BCI) Pillars
The four pillars of the BCI strategy include:
- Leveraging Data Across Federal Agencies to Get Lower Prices and Better Terms: The initiative aims to centralize acquisition data to facilitate smarter, value-based buying decisions. The government can negotiate better deals and enhance market intelligence by sharing and analyzing acquisition data. Tools will be provided to contracting officers to access centralized pricing data and information on vendors, promoting equity and supporting small businesses.
- Negotiating Common Enterprise-Wide Software Licenses: The government plans to negotiate government-wide IT software license agreements to reduce price variance, secure favorable terms, and avoid duplicated efforts across agencies. This approach aims to capture efficiency gains and promote small business participation.
- Saving Money and Avoiding Waste by Getting Contract Requirements Right the First Time: Agencies will focus on refining contract requirements to minimize expensive modifications. This involves utilizing a proven methodology to pinpoint requirements through facilitated workshops and collaboration among experts from various fields.
- Getting Better Value from Sole Source and Other High-Risk Contracts: Specialized tools and strategies will be employed to ensure good deals in situations where vendor options are limited. This includes peer reviews and hybrid contracting models to mitigate risk and align payment structures with the acquisition lifecycle.
Between fiscal years 2020-2023, expert pricing advice provided during peer reviews helped the government save nearly $300 million. Additionally, government agencies will increase the use of “hybrid” contracts for appropriate acquisitions. These contracts allow for various payment structures (e.g., cost-reimbursement, labor-hour, fixed-price) to better align with the different risk levels during the lifecycle of large acquisitions.
