The Office of Management and Budget (OMB) has issued a memorandum urging federal agencies to prioritize the procurement of commercially available products and services. The directive aligns with an executive order signed in April 2025, which aims to streamline federal acquisition processes and encourage more efficient use of government resources.
According to OMB Director Russell Vought, the memorandum outlines specific steps agencies must take to reduce reliance on non-commercial purchases. "The memo outlines actions agencies must take to prioritize commercial solutions and strengthen oversight of non-commercial procurements", Vought stated.
Reporting requirements for federal agencies
Under the new directive, federal agencies are required to submit a comprehensive report to the OMB by May 4, detailing non-commercial procurement activities. This report will focus on three key areas:
- Recent Non-Commercial Awards: Agencies must provide the total value and number of non-commercial contracts awarded between April 15, 2025, and September 30, 2025. This information should be categorized by product service code and include procurement instrument identifiers. For contracts exceeding $10 million, additional details such as the requirement description, contract pricing type, and total value must be included. Agencies must also explain why transitioning to a commercial solution is not planned, if applicable.
- Near-Term Non-Commercial Acquisitions: Agencies are required to disclose the total number of pre-award non-commercial contract actions in process as of March 31, 2026. For those exceeding $10 million, descriptions of the requirement, cost estimates, planned contract types, and justifications for non-commercial approaches must be provided.
- Future Procurements: Agencies must outline internal controls designed to ensure senior procurement executives (SPEs) review planned non-commercial awards.
Reports must exclude source selection-sensitive information and adhere to a template accessible through the MAX platform.
Strengthening oversight and improving data collection
The memorandum emphasizes the role of competition advocates in enhancing procurement practices. Agencies are directed to ensure that the competition advocate position is held by an official at or above the level of the head of contracting activity or deputy SPE. The memo also requires agencies to submit the name, title, and contact information of the appointed individual.
In addition, the Office of Federal Procurement Policy (OFPP) will collaborate with the Procurement Committee on E-Government and the General Services Administration to improve data collection and benchmarking for federal commercial acquisitions. These efforts aim to bolster transparency and efficiency within the Federal Procurement Data System.
Optional consultation with OMB
Federal agencies may seek guidance from the OMB before pursuing non-commercial acquisitions. Consultation requests, submitted by the SPE, must include details such as the requirement description, market research findings, cost estimates, and justifications for avoiding commercial solutions. Agencies are required to provide the OMB at least 15 days to review these requests prior to issuing a solicitation.
This directive underscores the federal government’s commitment to leveraging commercial solutions wherever possible to maximize efficiency and accountability in procurement practices. By prioritizing transparency and strengthening oversight, the OMB aims to align federal procurement strategies with the goals set forth in the 2025 executive order.
