Expanding Government Contract Responsibility of General Services Administration

The Bottom Line

The Trump administration has recently taken a decisive step toward making the U.S. General Services Administration (GSA) primarily responsible for federal procurement of common goods and services. This will significantly reduce the number of contracts awarded by individual agencies and consolidate the contracting function within a single agency’s contracting directorate. Federal contractors should take note of this pending change that will have an impact on future contracting procedures and awards.

The Executive Order

On March 20, 2025, President Trump issued an Executive Order “Eliminating Waste and Taxpayer Dollars by Consolidating Procurement,” which directed the consolidation of the federal government’s procurement of domestic “common goods and services” through a single agency -the GSA. This Executive Order will substantially reduce the autonomy of federal agencies from a procurement perspective because the GSA will roughly quadruple the number of procurements it will oversee annually. This means that the GSA will ultimately conduct the acquisitions and ultimately award federal contracts totaling over $490 billion dollars per year. As of the date of this alert, GSA is reportedly piloting the mandate set forth in the Executive Order. It has taken on procurements on behalf of the Office of Management and Budget (OMB), as well as on behalf of the Office of Personnel Management (OPM), which appears to have laid off its entire procurement department very recently. In the coming weeks, more agencies are expected to turn over procurement responsibility to the GSA.

The Executive Order defines “common goods and services” by referencing 10 procurement categories that have been defined by the Category Management Leadership Council (CMLC). The CMLC is a federal governing body tasked with directing the government efforts to procure goods and services as an enterprise with the goal of eliminating redundancies, increasing efficiency, and delivering more value and savings through reform of acquisition programs. The Administrator of Federal Procurement Policy chairs the CMLC, and voting members represent the largest federal buying agencies. These include the Departments of Defense, Energy, Health and Human Services, Homeland Security, Veterans Affairs, GSA, and the National Aeronautics and Space Administration.

While the term “common goods and services” may appear to be limited, the CMLC has provided examples of what would be encompassed within the 10 procurement categories. Accordingly, the GSA will assume responsibility for nearly all acquisitions across all federal agencies that fall within the following 10 procurement categories:

1. Facilities and Construction, which includes construction-related and facility-related materials and services, as well as facilities purchases and leases
2. Professional Services, which includes business administrative services, financial services, legal services, management and advisory services, marketing, public relations, research and development, social services, and technical engineering services
3. Information Technology, which includes software, hardware, consulting, security, outsourcing, and telecommunications
4. Medical, which includes drugs, pharmaceutical products, healthcare services, and medical equipment and supplies
5. Transportation and Logistics, which includes fuels, logistics support services, non-combat motor vehicles, package delivery, transportation equipment, and Transportation of Things (transportation functions for the movement of cargo, freight, small parcels, and personnel)
6. Industrial Products and Services, which includes fire, rescue, and safety environmental protection equipment; hardware and tools; installation, maintenance, and repair materials; machinery and components; oils, lubricants, and waxes; and test and measurement supplies
7. Travel, which includes employee relocation, lodging, and passenger travel
8. Security and Protection, which includes ammunition, protective apparel and equipment, security animals, security services, security systems, and weapons
9. Human Capital, which includes compensation, benefits, employee relations, human capital, strategy, policy, operations planning, talent acquisition, and talent development
10. Office Management, which includes furniture and office management products and services

Timeline to Implementation

The Executive Order establishes relatively short timelines for the procurement consolidation to be implemented. By April 19, 2025, the GSA’s Acting Administrator, Stephen Ehikian, will be designated as the executive agent for Government Wide Acquisition Contracts (GWACs) for IT, and no later than May 19, 2025, all federal agency heads must submit proposals for the GSA to handle their affected procurements. Once these plans are submitted, the GSA’s Acting Administrator will be required to submit a comprehensive plan to consolidate the procurement efforts to the OMB by June 18, 2025. 

Additionally, the Executive Order directs the GSA’s Acting Administrator, in consultation with the Director of OMB, to defer or decline the executive agent designation for GWACs for IT when necessary to ensure continuity of service or as otherwise appropriate, and to analyze, on an ongoing basis, whether the use of GWACs for IT will be effective in eliminating contract duplication, redundancy, and other inefficiencies. The Executive Order requires the Director of OMB to issue a memorandum to all agencies by April 3, 2025 to implement this GWAC for IT requirement. 

In response to the Executive Order, the GSA has established a website devoted to its procurement consolidation efforts. Information is being added to the website on an ongoing basis and as it becomes available. The GSA’s Acting Administrator is also blogging on the official agency website about consolidation efforts as they are rolled out.

Impact on Federal Contractors

This Executive Order has the potential to significantly affect the way contractors sell to the federal government. In the Fact Sheet published by the White House as a companion to the Executive Order, contracts for identity protection software, IT hardware and licenses, office productivity tools, and appliances used in the workplace are all marked for consolidation. While selling these items to the federal government via GSA has always been an option, many agencies have enjoyed the ability to contract with vendors directly to procure these goods and services in a manner that is designed to meet an agency’s specific needs. If this is no longer an option and the procurement function is consolidated within the GSA, contractors may experience longer procurement timelines to award because the reduction in procurement professionals overall will mean that the workload of those remaining will be significantly increased.

Additionally, contractors with active contracts may see their contracts transferred from the initial awarding agency to the GSA for administration, including option awards and modifications. This would necessitate new relationships with new procurement professionals at the GSA and create distance between the contractor and the ultimate federal end user at the agency that is receiving and using the goods and services.

Finally, the consolidation mandated by the Executive Order may result in fewer government contracts overall and higher contract values. This could have the unintended result of making it more challenging for small businesses to compete for these opportunities. As of the date of this alert, the U.S. Small Business Administration (SBA) has not published guidance regarding this Executive Order or any of the others that have the potential to affect small business contracting, but guidance is likely forthcoming. However, the SBA did recently revise its small disadvantaged business contracting goals for the federal government downward from the goals in place under the Biden Administration. This revision could align with the results of the consolidation efforts once they are fully realized. 

Takeaways

Federal prime and subcontractors should anticipate contract performance disruptions, including stop work orders and terminations, as the GSA and other agencies move to implement this procurement consolidation. When such disruptions occur, contractors should ensure that they obtain clear direction from their contracting officer. They should also request information in writing and in accordance with applicable contract terms and regulations.

As the consolidation effort may result in fewer contract opportunities, contractors should remain aware of this evolving landscape and take steps to ensure that they will remain eligible and competitive for these contracting opportunities when they arise.

Because these consolidation efforts will likely result in changes to applicable regulations and oversight, federal contractors should be prepared for additional changes in compliance obligations as the GSA takes over. This Executive Order will likely result in the promulgation of GSA-specific procurement regulations that may impose different obligations on bidders and contractors.

Goodwin’s Government Contracts and Grants practice has significant experience in counseling clients on the competition for and performance of federal government contracts. We are monitoring the changes that are flowing from the Trump Administration’s Executive Orders, with a particular focus on the changes that will impact federal prime and subcontractors. Please contact the authors of this alert if you have questions or would like to discuss the content of this alert.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice or other professional advice by Goodwin or its lawyers. Prior results do not guarantee similar outcomes.