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Understanding the Government-wide Categories and the DoD-wide Taxonomy

With the federal acquisition community’s shift to category management, an approach to buying smarter and more like a single enterprise, the question occasionally arises how did Category Management Leadership Council (CMLC) map out the government-wide category structure, and how does this align with or compare to the Department of Defense’s Taxonomy for Acquisition of Services and Supplies & Equipment.

 

About the CMLC

The Category Management Leadership Council (CMLC) is a council of representatives that come from the agencies who comprise the majority of federal procurement spending. The CMLC’s is the governing body that makes important decisions and sets the direction of the government's category management initiative. The council is chaired by the Administrator of Federal Procurement Policy and includes representatives from the Departments of Defense (DOD), Energy, Health and Human Services, Homeland Security, Veterans Affairs, the General Services Administration (GSA), the National Aeronautics and Space Administration (NASA), and the Small Business Administration (SBA).

 

About Category Management

Category management is a new, more strategic approach that involves identifying core categories of spend, and developing heightened levels of expertise, sharing best practices, providing streamlined solutions, and managing supply and demand, for each of the categories.

 

The objective is to increase efficiency and effectiveness while reducing costs and redundancies.Category management enables the government to eliminate redundancies, increase efficiency, and deliver more value and savings from the government’s acquisition programs.

 

About the Government-wide Category Structure

In 2014, the CMLC and the Office of Management and Budget (OMB) developed a government-wide category structure to support category management implementation across the federal government.

 

To develop the structure, CMLC and OMB turned to the Federal Procurement Data System (FPDS), the system the federal government uses to track its spending for purchases over $3,000. CMLC and OMB reviewed FY 2014 FPDS data and divided it into 19 common areas of spend or categories: 10 common spend categories, which account for $275 billion worth of purchases on goods and services; and nine categories that are defense-centric.

 

Then CMLC and OMB took product services codes (PSCs) and matched them to these 19 categories. Mapping the PSCs to the 19 spend categories was a multi-step process vital to the development of the government-wide category structure. These steps involved conducting spend analyses, soliciting feedback from agencies across the federal government, and integrating federal agencies’ inputs into the government-wide category structure.

 

The 10 Common Government Spend Categories are:

  1. Information Technology

  2. Professional Services

  3. Security and Protection

  4. Facilities & Construction

  5. Industrial Products and Services

  6. Office Management

  7. Transportation and Logistics Services

  8. Travel and Lodging

  9. Human Capital

  10. Medical

 

The CMLC and OMB are using this category structure to analyze the federal government’s spend thoroughly and continuously. They will also use this structure to create category management strategies that make federal procurements more efficient and cost effective.

 

About the Department of Defense’s Taxonomy for Acquisition of Services

The Department of Defense (DoD) first organized its spend for services and supplies & equipment into a specific taxonomy in 2010 in an effort to restore affordability in defense spending and facilitate strategic sourcing and the agency’s Better Buying Power initiatives. See Memorandum: Taxonomy for the Acquisition of Services. An updated memo was issued in 2012. See Taxonomy for the Acquisition of Serivces and Supplies & Equipment.

 

The goal, as it is with the CMLC government-wide category structure, is to achieve better insight, reach fact-based decisions, establish best practices, and share lessons learned across the Department. Over the last five years, the DoD has reviewed and adapted the portfolio groups and today uses 16 portfolio groups to manage spend. Similar to civilian agencies, the DoD uses PSCs to identifying and classifying the services and supplies & equipment they purchase but the agency’s spend is organized into taxonomies that better align with the missions requirements.

 

Acquisition of Services Taxonomy

  1. Research and Development

  2. Electronic and Communication Services

  3. Facility Related Services

  4. Knowledge Based Services

  5. Equipment Related Services

  6. Construction Services

  7. Logistics Management Services

  8. Medical Services

  9. Transportation Services

Acquisition of Supplies & Equipment Taxonomy

  1. Aircraft, Ships/Submarines & Land Vehicles

  2. Weapons & Ammunition

  3. Electronic & Communication Equipment

  4. Sustainment S&E

  5. Facilities S&E

  6. Clothing, Textiles and Subsistence S&E

  7. Miscellaneous S&E

 

See the Defense Procurement and  Acquisition Policy Taxonomy and Spend Analysis web page for further details.

 

The Alignment

While the CMLC Government-wide Category Structure and DOD taxonomy do not align perfectly, there is symmetry between the two. From the professional services perspective, most of the subcategories under the Government-wide Professional Services Category are similar to those in the DoD’s Knowledge Based Services Portfolio Group. As such the DoD and other agencies can share data and insights into the marketplace and organizational buying behaviors.

 

It is important to remember that overall goal is to make smarter and more efficient buying decisions on behalf of the entire federal government. No matter how the categories or portfolios are grouped, agencies, vendors and, ultimately the taxpayers, are benefitting from in-depth spend analysis, leveraging economies of scale, and sharing procurement best practices along common threads.

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