EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

W ASHINGTON, D. C. 20503

 O F F I C E O F F E D E R A L

P R O C U R E M E N T P O L I C Y

September 29, 2011

MEMORANDUM FOR CHIEF ACQUISTION OFFICERS 

SENIOR PROCUREMENT EXECUTIVES 

FROM: Daniel I. Gordon 

Administrator 

SUBJECT: Development, Review and Approval of Business Cases for Certain

Interagency and Agency-Specific Acquisitions

It is critical that the Federal Government, in its procurement activity, leverage its buying

power to the maximum extent as well as achieve administrative efficiencies and cost savings. 

Too often, however, agencies establish new overlapping and duplicative contracts for supplies or 

services, because the agencies have not adequately considered the suitability of existing 

interagency contract vehicles: government-wide acquisition contracts (GWACs), multi-agency 

contracts, and blanket purchase agreements (BPAs). Similarly, in those situations when a

suitable interagency vehicle does not exist, agencies have not adequately considered the 

opportunity to leverage the agency’s own buying power, and achieve administrative efficiencies, 

through the use of an agency-specific1contract. This failure to make maximum appropriate use 

of interagency vehicles and agency-specific contracts results in higher prices and unnecessary 

administrative costs. 

This memorandum outlines required elements of business case analysis as well as a 

process for developing, reviewing, and approving business cases to support the establishment 

and renewal of GWACs, multi-agency contracts, BPAs, and agency-specific contracts. This 

guidance supports efforts to deliver an efficient, effective, and accountable Government2by 

establishing a framework for addressing unjustified duplication among contracts, which was 

identified as an area of concern by the Government Accountability Office in a recent report.

3

The requirements outlined in this memorandum address section 865(b)(2) of the National 

Defense Authorization Act for FY 2009 (P.L. 110-417), which requires multi-agency contracts to 

be supported by a business case analysis detailing the administration of the contract, including an 

analysis of all direct and indirect costs to the government of awarding and administering the 

contract and the impact that the contract will have on leveraging purchasing power. This 

memorandum also addresses the designation, by the Office of Management and Budget (OMB), 

of executive agents to manage GWACs under the Clinger-Cohen Act (40 U.S.C 11302). 

 

1

For purposes of this guidance, an agency-specific contract is an indefinite-delivery, indefinite quantity contract 

intended for the sole use of the establishing department or agency. Agency-specific contracts may be agency-wide 

(sometimes referred to as “enterprise-wide”) or limited to one or more specific component organizations within the 

agency.

2

See Executive Order--Delivering an Efficient, Effective, and Accountable Government, 

http://www.whitehouse.gov/the-press-office/2011/06/13/executive-order-delivering-efficient-effective-andaccountable-government

3

See section 16 entitled, “Collecting improved data on interagency contracting to Governmentwide minimize 

duplication could help the government leverage its vast buying power”, in Government Accountability Office 

Report GAO-11-318SP, http://www.gao.gov/new.items/d11318sp.pdf
2

For acquisitions that enter the solicitation phase after December 31, 2011, the agency 

which is responsible for the acquisition shall develop a business case, using the procedures

outlined in this memorandum, to support the establishment or renewal of the following three 

types of acquisitions vehicles: 

 all GWACs, as that term is defined in Federal Acquisition Regulation (FAR) 2.101;

 multi-agency contracts, as defined in FAR 2.101, or multi-agency BPAs created under the 

Federal Supply Schedules (FSS) Program managed by the General Services Administration 

(GSA), where:

(i) usage by another agency (i.e., interagency usage) is expected to be significant4; or 

(ii) interagency usage is not expected to be significant but where a significant overlap5 would 

be created between the scope of the proposed acquisition and the scope of existing 

contracts or agreements established under the Federal Strategic Sourcing Initiative 

(FSSI), the General Services Administration’s SmartBUY programs, or an existing 

GWAC. 

 agency-specific contracts or agency-specific BPAs where either the contract or the BPA 

would create a significant overlap (See footnote 5) between the scope of the proposed 

acquisition and the scope of existing contracts or agreements established under FSSI, 

SmartBUY programs, or an existing GWAC.

Business cases are required in accordance with the following schedule and thresholds:

 

4 As a general guideline, significant usage is expected when obligations by customers outside of the awarding 

agency are anticipated to exceed 25% of total obligations over the life of the contract vehicle.

5 As a general rule, significant overlap is created when the scope of the proposed acquisition includes supplies 

and/or services of existing contracts or agreements established under FSSI, SmartBUY programs, or an existing 

GWAC and obligations for these supplies and/or services are anticipated to exceed 25% of total obligations over the 

life of the proposed acquisition. 

Type of Acquisition Vehicle Anticipated Solicitation 

Release Date

Business case is required when 

the estimated value of the 

proposed acquisition vehicle is 

equal to or greater than...

GWAC After 12/31/2011 All GWACs regardless of 

estimated value

Covered multi-agency contract 

or multi-agency BPA 

Covered agency-specific 

contract or agency-specific BPA 

1/01/2012 - 09/30/2012 $250 million

FY 13 $100 million

FY 14 $50 million
3

With good strategic planning, careful evaluation of the current marketplace, and strong 

contract management, significant value can be generated through the creation and operation of a 

new interagency or agency-specific contract vehicle.

6

Strategic planning includes both (i) 

evaluating the suitability of known existing vehicles before creating new interagency or agencyspecific vehicles to avoid unhealthy duplication7

and (ii) determining the best ways to create new 

vehicles where there is a void or insufficient choice.

8

 These actions require an ongoing 

commitment of time and resources. Accordingly, to ensure that the expected return from 

investment in a contract or agreement is worth the effort and cost associated with planning, 

awarding, and managing a new vehicle, business cases for contracts and BPAs meeting the 

above-described thresholds should address the following required elements of analysis:

Business cases shall be developed, reviewed, and approved using the following four-step 

process:

 

6

Experience has shown, for example, that the benefits of pooling buying power can be significantly enhanced by (i) 

convening a group of agency experts to better understand agencies’ specific requirements, (ii) sharing pricing 

information and considering the impact a new contract would have on existing contracts, (iii) analyzing spend data, 

(iv) securing up-front spending commitments from agencies to increase vendor interest in the procurement, (v) 

maximizing small business participation, and (vi) requiring winning vendors to provide detailed spend data 

throughout the life of the contract that customers can analyze to improve internal business processes and inform 

future buying decisions. 

7 Duplication is most likely to occur as a result of multiple agencies creating their own separate contracts for similar 

products or services. Thus, agencies must be alert to the impact of duplication when creating a new interagency 

vehicle or a large agency-specific vehicle. The impact of duplication must be assessed when new vehicles overlap 

with existing interagency vehicles or with other vehicles within the same agency. Duplication is most likely to 

occur if the new vehicle would serve a narrow customer base, such as a single agency component. 

8 OFPP recognizes, as did the Acquisition Advisory Panel, that “[s]ome competition among vehicles is . . .desirable 

and even fundamental to maintaining the health of government contracting.” – Acquisition Advisory Panel. Report 

of the Acquisition Advisory Panel to the Office of Federal Procurement Policy and the United States Congress: 

January 2007, p. 251, https://www.acquisition.gov/comp/aap/finalaapreport.html

9 This site may also be accessed directly through the Chief Financial Officer Virtual Toolbox, available on MAX. 
4

Business cases shall be approved by an authority no lower than the agency’s Senior 

Procurement Executive (SPE) or equivalent official, following coordination with the agency’s 

Director of the Office of Small and Disadvantaged Business Utilization (OSDBU) and – if the 

acquisition involves IT – the agency’s Chief Information Officer. An agency may also choose to 

require additional approving officials. Agency-approved business cases shall be kept by the 

agency as part of the acquisition file. Agencies shall also indicate in MAX, 

https://max.omb.gov/community/x/b5G8IQ, whether the business case has been cancelled or 

approved by the agency. 

Other than draft solicitations, agencies shall not issue solicitations for proposed BPAs, 

multi-agency contracts, and agency-specific contracts until the business case has been finalized 

and approved by the appropriate agency official(s). In addition, in the case of those approved 

business cases for establishing or renewing a GWAC, the agency shall formally submit the 

approved business case to OMB, as part of the request by the agency head (or deputy) to the 

OMB Director requesting that the Director grant the agency an executive-agent designation to 

award and manage the proposed GWAC. While an agency may release a draft solicitation for a 

proposed GWAC, the agency may not release a final solicitation for a proposed GWAC unless 

and until the OMB Director has granted the agency’s request for an executive-agent designation. 

In the case of other types of multi-agency contracts and BPAs as well as agency-specific

contracts and BPAs, OMB reserves the discretion to require the agency to submit the approved 

business case to OMB, for review, prior to the agency releasing a final solicitation. 

To improve acquisition planning and agencies’ ability to leverage buying power, agencies 

are required to post on MAX links to web pages containing information about the BPAs and 

contracts that are covered by this memorandum. Web pages should include the names of 

vendors, contract terms and conditions, information about pricing, and provide a point of contact 

for further information. This sharing of information will better position agencies and interagency 

groups, such as the Strategic Sourcing Working Group (SSWG), which provides governance for 

FSSI, to assess potential benefits that might be leveraged government-wide. Instructions for 

posting award information is provided on MAX at https://max.omb.gov/community/x/b5G8IQ. 

Thank you for your attention to these important matters. Questions regarding this 

memorandum should be directed to Curtina Smith at csmith@omb.eop.gov.

Attachment
Attachment

Business Case Template

Business cases for covered contract vehicles (see memorandum) shall address the following 

elements as described in the chart below: scope, potential duplication, value, interagency 

demand, and management. Final business cases should also include an executive summary that 

overviews the key points in each of the required areas and include a signature page with the

appropriate agency approval(s) and date(s) approved.

Overview of Business Case Template

EXECUTIVE SUMMARY

PART I. SCOPE AND POTENTIAL DUPLICATION

PART II. VALUE

PART III. INTERAGENCY DEMAND AND MANAGEMENT

SIGNATURE PAGE

Type of Acquisition Vehicle Required Elements of 

Business Case Analysis

GWACs Complete parts 1, 2, and 3

Multi-agency contracts and multi-agency 

BPAs where interagency usage is 

anticipated to be significant 

Multi-agency contracts and multi-agency 

BPAs where interagency usage is not 

anticipated to be significant

Complete parts 1 and 2 

Agency-specific contracts and agencyspecific BPAs Complete parts 1 and 2

BUSINESS CASE ANALYSIS OUTLINE 

PART I. SCOPE AND POTENTIAL DUPLICATION

A. SCOPE

1. Describe the purpose of the acquisition and how it supports Presidential, governmentwide, and/or agency priorities or initiatives. Describe the types of goods and services to 

be acquired. 

2. Provide the anticipated period of performance as well as any option periods.

3. State the anticipated annual amount of spend over the life of the proposed acquisition and 

the amount of the contract ceiling. 

B. POTENTIAL DUPLICATION 

1. Complete the table below for each primary product or service to be offered on the 

vehicle:
2

Primary Product 

or Service

Existing vehicles 

researched

Uniqueness of 

Proposed Vehicle

PSC 

Code

Description Servicing 

Agency

Name of 

Contract

Vehicle

Instructions for completing the table.

Column 1. PSC Code: identify 4-digit code, whenever possible.

Column 2. Description: briefly describe primary product or service to be acquired.

Column 3. Existing vehicles researched: List existing vehicles that agency evaluated for 

potential suitability. Agencies should always evaluate FSSI or SmartBUY agreements, and 

GWACs. For proposed GWACs and multi-agency contracts and multi-agency BPAs where 

interagency usage is expected to be significant, agencies should also consider relevant multiagency contracts or BPAs, of which they are aware, and any relevant agency-specific contracts

or BPAs.

Column 4. Uniqueness: Explain how the proposed vehicle differs from the identified existing 

vehicles (e.g., in terms of expected pricing, terms and conditions). If an agency-specific vehicle

is proposed, note any other reasons for creating the vehicle, such as agency-unique 

requirements, compliance with agency standards, or simplified contract management (in lieu of 

having to manage contractors on multiple interagency vehicles, each of which addresses only 

part of the agency’s requirement).

2. State if the agency has identified any overlapping agency-specific vehicles that it intends 

to phase out.

PART II. VALUE

1. Discuss the benefits expected as a result of the proposed acquisition. Address price, 

administrative and efficiency improvements as well as intangible benefits. Discuss the 

impact the proposed acquisition will have on the government’s ability to leverage its 

purchasing power at both the agency-wide and government-wide levels. 

2. Describe how the cost of awarding and managing the proposed contract vehicle compares 

to the amount of fees likely to be incurred if the agency used an existing interagency 

vehicle or assisted acquisition services.

3. Describe how the acquisition strategy and the resulting procurement will promote 

maximum opportunities for small businesses at both the prime and subcontracting levels.

4. Briefly describe the extent to which the proposed acquisition has been discussed with key 

stakeholders, including members of the SSWG, program managers of existing GWACs 

or multi-agency contracts (as appropriate), officials from GSA or the Small Business 

Administration, and agency offices with responsibility for small business programs, and 

the Chief Information Officer, if the acquisition involves IT. Indicate if any key 

stakeholder concerns or comments remain unresolved and discuss plans to resolve them.
3

PART III. INTERAGENCY DEMAND AND MANAGEMENT9

A. INTERAGENCY DEMAND

1. Identify the anticipated portion of the acquisition that will be used by external customers 

(expressed as percentage of total obligations). List the agencies that are expected to 

account for the majority of obligations under the vehicle, include the five largest 

customers outside the servicing agency and their expected estimated usage. 

B. MANAGEMENT

1. Identify the number of FTEs supporting the award and administration of the contract and 

discuss any relevant specialized experience. For example, if awarding a contract for IT 

services, does the contracting officer and program manager have specialized experience?

2. Identify all direct and indirect costs to the servicing agency for awarding and 

administering the proposed contract vehicle.

3. Identify the fund (e.g., working capital fund), if any, that the agency intends to use to 

fund its work and receive payment from customer agencies. 

4. If fees will be assessed, identify the following:

a. List the amount of proposed fee(s) and briefly describe the methodology used for 

setting and adjusting fees when necessary. For example, state whether fees differ 

based on the amount and type of support required.

b. Indicate if all costs to the agency for awarding and administering the proposed 

contract vehicle been included in the fee(s). If not, identify any costs not covered. 

5. If the servicing agency plans to request any funding to support operation of the contract 

vehicle, identify the estimated amount of the request and the purpose to be addressed by 

the funding.

6. Discuss the steps the agency intends to take to ensure that over the life of the vehicle (a) 

vendor prices remain competitive, (b) regular customer feedback is obtained, and (c) the 

government maintains a qualified pool of vendors to meet customer needs. 

7. Discuss how the agency intends to help ensure customer adherence to the following

practices (where applicable, include links to agency reference materials or training 

materials developed for customers):

a. Use of fixed-price task orders whenever practicable.

b. Policies to maximize small business participation.

c. Consideration of contractor past performance in the evaluation of proposals.

d. Assessment of contractor performance on awarded tasks.

 

9

This section is not required for agency-specific vehicles or for multi-agency vehicles where interagency usage is 

not expected to be significant.