Suspense crime, Digital Desk : After months of targeting consulting firms, the Trump administration is now turning its focus to technology vendors in an effort to further reduce federal spending. The GSA has now targeted value-added resellers (VARs) like Dell and CDW and is asking for detailed pricing justifications and cost analyzes.

On Wednesday, letters were sent out to ten firms requesting explanation on contract terms and outline possibilities for cost reduction. The GSA contends that sophisticated procurement procedures have resulted in cost over inflation and is now forcing VARs to enhance cost efficiency.

Pricing Justification Submission

The GSA’s Federal Acquisition Service will be lead by Josh Gruenbaum, who sent out the ‘cost breakdown order’ or require companies to provide categorized expenses, predetermined pricing, and check them in relation to pricing for similar services in the private sector. Responses will be collected by June 11. Dell and CDW have yet to make statements.

Booz Allen Hamilton has just made headlines by announcing the layoff of 2,500 employees, while other previously targeted firms also had to revise or terminate contracts with Deloitte and Guidehouse.

$33 Billion Saved from Contract Cancellations
As of January, the administration has cancelled over 11,000 contracts from 60 federal agencies. Cuts in IT support at the Department of Education and project management at the Treasury have cumulatively resulted in savings of $33 billion.
According to internal documents, the OneGov project plans to streamline contracts within the Pentagon by merging several contracts into one, eliminating hourly billing arrangements in favor of payments based on outcomes, thus incentivizing contractors through performance-based systems.

Focus on In-House Competency and Direct Purchase
GSA underscored the need to curb dependency on serviced providers. ‘This doesn’t mean that we have to subcontract everything,’ said Gruenbaum. Hae elaborated that the administration intends to deeply transform the government’s mode of interaction with suppliers.

In April, an executive order was issued directing agencies to give preference to off-the-shelf items to be bought directly from the supplier agranier. This GSA letter reaffirms the policy and suggests that VARs could be removed from future procurement plans where they become unnecessary.

Technology Procurement to Face Further Reforms
Even with Elon Musk no longer serving in an advisory role on federal efficiency, officials assert the administration remains focused on cost reduction. “We’re not done. We have yet to set our sights on technology, which, just like consulting, is overdue for a shift in acquisition tactics by the federal government,” stated one insider.

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