Trump’s Executive Order to Centralize Federal IT Procurement Faces Implementation Challenges

President Donald Trump has signed an executive order directing the consolidation of federal IT contracts, along with procurement for goods and services, under the General Services Administration (GSA). The initiative is designed to streamline the federal procurement process and reduce duplication. However, experts have raised concerns about the practicality of centralizing federal IT contracts on such a large scale, particularly amid continued staffing cuts at the GSA.

The federal government allocates approximately $490 billion annually toward contracts for goods and services, with individual departments and agencies traditionally managing their own procurement. The executive order seeks to revert to a centralized model, charging the GSA with the responsibility of identifying and eliminating duplicate contracts and other inefficiencies in government procurement.

Alan Pelz-Sharpe, founder of Deep Analysis, acknowledges the logic behind centralizing procurement to reduce duplication but raises questions about the GSA’s capacity to manage the increased workload. “Procurement processes are complex, and in some cases, contracts have been running for decades,” Pelz-Sharpe noted. “One has to hope the GSA has a detailed and incredibly efficient plan to absorb all the new work and manage the change.”

The GSA’s ability to handle this expanded role is further complicated by staffing cuts initiated by the Department of Government Efficiency (DOGE), led by Elon Musk and Vivek Ramaswamy. The DOGE aims to reduce the size of federal agencies and departments, potentially impacting the GSA’s operational capacity. Deniece Peterson, senior director of federal market analysis at Deltek, describes Trump’s order as one of the most significant for federal IT contracting. She points out that in fiscal year 2024, the GSA managed a little over $12 billion in government-wide IT acquisition contracts, while non-GSA IT contract volume totaled about $15 billion. “GSA would be more than doubling the volume that they would be responsible for,” Peterson stated. “The feasibility really comes down to how they choose to implement this.”

The executive order does provide the GSA with the authority to defer or decline IT contracts to ensure continuity of service. However, Peterson suggests that this may not align with the administration’s apparent direction. Even without the current workforce challenges, transferring billions of dollars worth of federal IT contracts to the GSA presents significant difficulties.

Historical context adds another layer of complexity. The GSA previously held primary responsibility for federal IT contracting but faced criticism over speed and customer service issues, leading other agencies to assume their own contracting responsibilities in the mid-2000s. “There’s a reason why these big agency, multiple-award contracts became a thing,” Peterson explained. “The issues then could be the issues now.”

The consolidation effort also raises concerns about specialized procurement procedures, particularly for defense or intelligence needs that require specific expertise. Pelz-Sharpe questions the impact on these areas, asking, “What happens to all the non-GSA contracts moving forward, and what impact will this move have on highly specialized procurement procedures?”

In addition to internal challenges, the administration is scrutinizing external consulting firms. The GSA has requested detailed justifications from ten of the federal government’s highest-paid consulting firms, including Deloitte, Accenture Federal Services, and Booz Allen Hamilton, for their contract spending from fiscal years 2019 to 2024. The firms are asked to identify waste and opportunities for cost reduction, with responses expected to be clear and free of jargon. “A 15-year-old should be able to understand what service you provide and why it is important,” stated Josh Gruenbaum, the GSA’s Federal Acquisition Service Commissioner.

This initiative aligns with the administration’s broader agenda to cut costs and boost efficiency. The GSA has already canceled more than 1,700 contracts, resulting in $4.5 billion in savings. However, some consulting firms express concern over the pressure to justify their value and the potential for job losses. Others, like Leidos, have publicly supported the government’s cost-cutting goals.

The consolidation of federal IT contracts under the GSA represents a significant shift in procurement strategy. While the move aims to enhance efficiency and reduce redundancy, the practical challenges of implementation, especially amid staffing cuts and the need for specialized procurement expertise, present substantial hurdles. The administration’s approach to addressing these challenges will be critical in determining the success of this consolidation effort.