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OMB to ban most new contracts for mobile devices, services

The Office of Management and Budget is planning to turn up the heat once again on agency commodity IT spending. First it was on desktops and laptops, and now it will be on mobile devices.

In last week’s notebook, I told you about a new mobile IT services policy in the works. Now I have a copy  of the draft policy, and OMB wants to apply the same level of oversight and structure to how agencies buy mobile devices and services as they did for desktops and laptops.

The draft policy tells agencies “effective immediately, except as provided in this policy, all agencies are prohibited from issuing solicitations for new contract awards for mobile device [sic] and services, and should look to the existing governmentwide General Services Administration wireless solution.”

OMB plans to give agency chief information officers until Sept. 30, 2018 to consolidate existing contracts for mobile devices and services to have one contract per carrier. Under the draft policy, agencies must develop transitions plans to the consolidated governmentwide contract by Aug. 31, including outlining potential situations where this initiative may not work, such as remote locations.

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Additionally, the draft memo is strongly encouraging agencies to buy devices for employees that are at least “one generation behind the most current release unless the agency demonstrates it can acquire the latest model at no additional cost. Agencies are also encouraged to standardize device capabilities and features to the maximum extent possible to leverage buying power to drive costs.”

The five-page draft memo is similar to the one OMB issued last October. In that guidance, the Office of E-Government and the Office of Federal Procurement Policy set the tone for how it would bring specific commodity technology buying under the category management initiative. The administration banned most new contracts for desktops and laptops, and named three governmentwide acquisition contracts as the main source for this hardware.

OMB says the reason for bringing mobile devices and services under a similar tactic as laptops and desktops is clear.

“The federal government cannot know the most efficiency [sic] and effective way to buy mobile services if it does not have visibility into what it buys today or know what it really needs to help deliver agency missions,” the draft memo states. “Too often, agencies buy excessive levels of service, such as unlimited data and minute plans, when a lesser amount of data or number of minutes pooled across many thousands of users would meet the demands of the agency without risk of overage charges.”

The Government Accountability Office estimated agencies spend about $1.2 billion a year on mobile devices and services, and a majority don’t have strong oversight over those procurements.

OMB said at least one agency did an inventory and found several hundred devices with zero usage. That agency turned off those unused smartphones and services and saved more than $1 million a year.

“The memo is a forcing mechanism for good business practices that agencies should already be following with their wireless assets. You have to have an accurate inventory to begin manage cost,” said an industry source with knowledge of the draft memo. “One CIO told me recently, that completed the process found 13 percent of the government phones were not even in use at their agency. There is also an important ancillary benefit to implementing this policy — to prevent the security risk of a ‘rouge’ smartphones to the agency.”

An OMB spokesman said they wouldn’t comment on pre-decisional materials.

The draft memo tells plenty of what OMB is planning. It wants agencies to take several steps to figure out how many devices and services they currently are paying for, how much they are paying for those devices and services, and to get better deals going forward.

The draft policy says by May 31, and quarterly thereafter, agencies need to report mobile service usage and pricing data to OMB’s Integrated Data Collection (IDC) tool run. OMB then will post the pricing data to GSA’s Acquisition Gateway for agencies to use when researching new wireless contracts.

As part of the data collection effort, OMB folds in yet another expected benefit of the Federal IT Acquisition Reform Act (FITARA).

The administration plans to tell agencies to name someone to lead this category management effort around mobile. That person should report directly to the CIO and work closely with the chief financial officer and senior procurement executive. This person, undoubtedly, also would be in contact with the lead category manager running the mobile IT services category governmentwide through the Category Management Leadership Council (CMLC).

GSA also may test out the broker model concept for mobile devices and services. As the broker, GSA would set up a single pool of minutes and data for all contract holders.

“Under this model, all agencies would receive the benefit of cost savings as additional agencies use the existing agreement,” the draft policy states. “This model encourages early adoption because all agencies, regardless of their adoption rate, receive the same prices and benefits of acting as a single buyer.”

The draft policy says within 120 days of OMB releasing the memo, the Mobile Services Category Team (MSCT) will provide project and implementation plans to OMB to evaluate a mobile device and service broker program with small civilian agencies. The pilot program would last for a year and the MSCT would evaluate whether it could be expanded governmentwide.

Really what OMB is doing through this memo is mandating the use of a three-year old blanket purchase agreement for wireless devices and services. GSA set up a wireless strategic sourcing contract back in 2013, and only recently it seems to have really caught on.

Mary Davie, GSA’s assistant commissioner of the Office of Integrated Technology Services in the Federal Acquisition Service, wrote in a recent blog post that agencies’ use of the blanket purchase agreement for wireless grew by 500 percent in fiscal 2015 as compared to 2014.

“In FY15, we saw an average of 27 percent in savings with FSSI Wireless BPAs compared to prior year expenses for those agencies. These buyers found Monthly Recurring Charges (MRCs) per device dropping to $38.82 per user per month, from the $55.40 federal average at the start of the program, over many common voice and data smartphone plans. The BPAs are saving government agencies more than $16 per month per user. This marks a new low for the average MRC and highest monthly savings rate to date,” Davie wrote in the blog post. “Since these are service costs, and not just one-time costs, the savings are compounding each month agencies are on the contract. Fiscal 2015 federal government savings for the program exceeded $10 million as a result of better pricing, management, and competition credits. This means the government is leveraging government-wide discounts to save more each year, while it deploys devices with a greater focus on meeting the ever-increasing data needs for agencies.”

Davie said the cross-agency team is working on the next generation of contracts under the umbrella term Mobility 2.0. She said GSA plans to create a Mobility 2.0 Interact Community for industry and agencies to keep up-to-date on new initiatives and plans.

Davie said GSA is holding two events to help educate agencies about the current wireless BPA—one that’s Web only on Feb. 9 and an in-person event on April 14.

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