By centralizing procurement, the government hopes to achieve significant cost savings and improve the efficiency of public services provided to the American people. The U.S. federal government spends approximately $490 billion annually on contracts for common goods and services, making it the largest buyer of goods and services in the world. Despite this massive purchasing power, the current decentralized procurement system has led to inefficiencies, redundant purchases, and inconsistent pricing. Historically, different agencies have bought the same or similar products and services independently, without taking advantage of volume discounts or the buying power of the entire government.
For example, agencies have been purchasing common software products like Microsoft Office 365 separately, resulting in significant price variations. A comprehensive suite of Office 365 could vary by more than $200 per license between agencies. Such inefficiencies not only waste taxpayer dollars but also create administrative burdens for both agencies and contractors.
A recent Executive Order signed under the current administration expands upon efforts already underway to consolidate procurement across federal agencies. Since January 20, 2025, the GSA has been actively working to terminate or economize over 6,000 contracts across the government. This move is aimed at centralizing the procurement of common goods and services under GSA’s expertise, which is specifically tasked with managing government-wide procurement.
The Executive Order directs several key actions which are;
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Agency Heads Submit Proposals to GSA: Federal agencies are required to submit proposals to GSA for consolidating their procurement functions for common goods and services. By moving these functions to GSA, the government can reduce duplication and streamline purchasing across agencies.
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GSA and the Office of Management and Budget (OMB) Develop a Comprehensive Plan: GSA and OMB will collaborate to create a detailed plan for consolidating procurement across the government. This proposed plan is designed to eliminate waste and duplication while ensuring the government continues to deliver high-quality services to the American public.
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Designating GSA as the Executive Agent: Agencies will designate GSA as the executive agent responsible for the administration of government-wide acquisition contracts (GWAC)s. This centralization will allow GSA to leverage its expertise to secure better pricing and reduce procurement-related inefficiencies.
It is said by the current administration that one of the main objectives of consolidating procurement under GSA is to reduce costs by harnessing the government’s collective buying power. Numerous examples were offered to show the significant savings that can be achieved when procurement functions are centralized and standardized.
One example offered, consider the case of band saw blades. When purchased through GSA, the average price for a 32-7/8” band saw blade is 22% lower than the price available through other government procurement vehicles and even lower than commercial market pricing. Similarly, 50-inch flat-screen TVs purchased via GSA cost about 20% less than those purchased through other government procurement vehicles, and nearly 30% less than commercial market prices.
A more prominent example offered involves Microsoft Office 365, a product purchased by virtually every government agency. By centralizing the purchase of this software, the government could save more than $100 million annually. These savings result from eliminating price disparities and standardizing purchases under one procurement system.
Another area where consolidation could have a significant financial impact is in the procurement of identity protection services. Currently, agencies purchase these services separately, leading to inconsistent pricing and underutilization of volume-based discounts. Through GSA’s established purchasing solutions, the government can channel its demand for identity protection services more effectively, which has already resulted in savings of $150 million in FY 2024 alone.
Another example offered is where the federal government also purchases substantial numbers of computers for its employees to ensure efficient service delivery. In fact, more than $1 billion is spent annually on computers across agencies. Over the past decade, GSA has facilitated nearly $6 billion in computer purchases, with an average savings rate of 38%. By centralizing these purchases further, the government can maximize cost savings and establish uniform standards across all agencies, helping them procure computers more efficiently.
By centralizing procurement in GSA, the government can significantly reduce administrative overhead, eliminate redundant contracts, and ensure that taxpayer dollars are spent more efficiently. This effort is in line with the administration’s broader goals of fiscal responsibility, cutting unnecessary bureaucratic costs, and redirecting resources to priorities that directly benefit the American people.
The consolidation of federal procurement under the General Services Administration marks a significant step forward in streamlining the federal purchasing process and achieving long-term cost savings. By eliminating inefficiencies, reducing duplication, and leveraging the government’s buying power, this initiative promises to deliver substantial savings while improving the quality of services provided to the American public.
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