May 10 2016

OMB Pushes Forward with Plan to Save Money on Mobile Devices and Services

Agencies have until the end of this month to terminate unused mobile devices and services, and new contracts are now banned.

By the end of this month, the way that the federal government purchases mobile devices and services will start to change —and fairly dramatically.

Under new policy guidelines from the Office of Management and Budget (OMB), agencies can no longer strike new mobility contracts, and by May 31 (and each quarter thereafter, as necessary) will need to terminate unused devices and services. OMB wants to shift to more governmentwide mobility contracts as a way to save money.

The policy shift, led by U.S. Chief Acquisition Officer Anne Rung and federal CIO Tony Scott, is designed to shift the procurement of mobile devices and services to a category management model, which OMB has already set in motion for government software purchases as well as for desktop and notebook computers. Category management is aimed at making government procurement more efficient and streamlined by identifying core categories of spending on commoditized goods and services.

According to OMB, each year the federal government spends about $1 billion on mobile devices and service contracts through more than 1,200 separate agreements. The new mobility strategy will save an estimated $230 million annually by helping to reduce fragmentation and duplication of mobile contracts and simplifying the federal marketplace for mobile services, OMB says.

Under the policy, the GSA will serve as a broker for mobile devices and services. “Under this model, all agencies would receive the benefit of cost savings as additional agencies use the existing agreement,” the policy notes.

Meeting the Deadlines

The policy was announced in late March and public comments on the changes closed on April 28. Now, federal agencies covered by the policy have a few weeks to meet some key new requirements.

Under the new policy, “agencies will be able to select the right size of service and drive down costs simultaneously by pooling resources and minimizing the risk of overage charges.” As a result, the policy directs agencies to not issue solicitations for new mobility contracts, and should look to the existing government-wide General Services Administration wireless solution to help spur contract consolidation.

By May 31, and each quarter thereafter, agencies must report all mobile service usage and pricing data to OMB, which will then post all usage and pricing data to the Acquisition Gateway portal, so that agencies can see each other’s mobility usage data, share best practices and make more efficient buying decisions using category management.

OMB notes that the reports “must, at a minimum, identify the purchased service, including quantity of minutes, data, number of text messages, and the actual utilization of this service.”

Without that kind of data, “agencies have a limited ability to monitor device usage and determine if devices should be canceled or moved to a more cost-effective service plan,” the guidance notes. A lack of an inventory also makes it less likely that contracts will be consolidated.

Every quarter, the OMB guidelines state that agencies should use these inventories to consolidate contracts, look at overusage and underusage of services, and analyze cost per user, cost per megabyte, and prices paid.

Agency CIOs, in consultation with their chief acquisition officers and senior procurement executives, need to develop short transition plans to meet these objectives and submit to OMB by Aug. 31.

Moving to a New Model

OMB notes that the Category Management Leadership Council has established the Mobile Services Category Team (MSCT) to serve as the lead mobile acquisition going forward. The MSCT is led by OMB, GSA, the Defense Department and the Department of Homeland Security, and is comprised of mobile services subject-matter experts.

By Oct. 31, the MSCT will develop a strategy for at least one next-generation, government-wide acquisition solution, to be awarded prior to May 31, 2018. The strategy “must include threshold discounts at the contract level based on volume” to maximize savings for agencies, according to the OMB guidance.

By Sept. 30, 2018, agency CIOs will be required to “use their authority to consolidate all of the agency’s minute and data requirements to one contract per carrier utilizing a government-wide acquisition strategy.”

Saving Costs on Mobile Devices

Agencies are also being asked to keep the cost of mobile devices in mind, and the guidance notes that older devices “are typically equally capable of meeting all the requirements and needs of a government user, and agencies may be able to acquire these devices at significantly lower prices than the latest model.”

The policy says agencies “should consider buying previous generation devices if functional requirements are met and there are increased savings to the agency.” Agencies should also “implement policies to acquire new devices with no less than 18 months between refresh cycles, and are encouraged to standardize device capabilities and features to the maximum extent possible to leverage buying power to drive costs.”


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