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Spend Under Management (SUM)

APMT 060

DAU GLOSSARY DEFINITION

Alternate Definition

Spend Under Management (SUM) is the percentage of an organization’s spend that is actively managed according to category management principles—or smart decision-making where agencies buy the same kinds of goods and services through best value solutions. Increasing SUM will eliminate redundancies, increase efficiency, and deliver more value and savings.
Best-in-class (BIC) is a government-wide designation for acquisition solutions that can be used by multiple agencies and that satisfy key criteria defined by the White House Office of Management and Budget (OMB).
Spend Analysis is the collaborative and structured process of critically analyzing an organization's spend data to support business decisions for best acquiring services (and commodities) more effectively and efficiently. Source OUSD(A&S)
Spend (as used above) money (dollars) used for procuring services or supplies and equipment
Addressable Spend: Spend determined to have a BIC contract available for use in the transaction.
Opportunity Spend: Transaction not awarded to the corresponding addressable BIC contract.
SUM: Transactions that use a BIC, Tier 2, or Tier 1 contract. NOTE: After OMB approval, Small Business spend counted as tier 1 even if it otherwise would be tier 0.

Alternate Definition Source

General Services Administration (GSA), 

General Information

Within the context of the government-wide category management initiative, the Office of Management and Budget (OMB) defines SUM as spend on contracts that meet defined criteria for management and data-sharing maturity. To help agencies evaluate their progress in aligning common spending activities with category management principles, OMB and the Category Management Leadership Council (CMLC) have developed a SUM tiered maturity model that assigns tiers to agency spending activity based on attributes demonstrating the agency’s progress and sophistication in adopting SUM practices.  OMB uses the following tiered rating scale to evaluate agency spend:

  • Tier 3, Best-in-Class (BIC) Solutions – Spending managed at the Government-wide level through use of BIC solutions that have been identified through a collaborative interagency process by acquisition category experts within the Government as offering the best pricing and terms and conditions within the Federal marketplace and reflecting the strongest contract management practices.
  • Tier 2, Multi-Agency Solutions – Dollars obligated on multi-agency contracts that satisfy rigorous standards set for leadership, strategy, data, tools, and metrics.  Although not BIC solutions, they reflect strong contract management practices, including data and information sharing across agencies, and use of cross-agency metrics.
  • Tier 1, Mandatory-Use Agency-Wide Solutions – Dollars obligated on agency-wide contracts with mandatory-use or mandatory-consideration policies, along with standards set for data-sharing, including data analysis, information sharing across the agency, and use of metrics that are defined, tracked and publicized.
  • Tier 0, Spend NOT Aligned to Category Management Principals.  Tier 0 involves purchasing in a decentralized manner and not conforming to category management principles, including strategic oversight and disciplined consideration of performance data to understand prices paid by other Federal customers or metrics to improve results. Dollars obligated on contracts that do not fit into one of the three tiers above. Agencies should analyze Tier 0 spend to find opportunities for shifting to higher-tier solutions.

The SUM Tiered Maturity Model may be viewed by on GSA’s Acquisition Gateway.


What is a Best in Class Solution or Acquisition?  The Best-in-Class acquisition designation identifies government-wide contracts that satisfy key criteria defined by OMB. Best-in-Class solutions are vetted, well-managed, and recommended—and in some cases required for use. Interagency government-wide category teams have worked to designate over 30 Best-in-Class contracts to reduce the amount of effort individual buyers spend finding and researching acquisition solutions. Widespread adoption of Best-in-Class solutions will: 

  • Maximize the government’s shared purchasing power, allowing agencies to leverage volume discounts (buying power lever);
  • Help agencies operate more efficiently by reducing administrative costs and contract duplication; and
  • Expand collection and sharing of government-wide buying data, leading to better-informed business decisions.

See the Best in Class Resource Page on GSA's Hallways which includes detailed BIC criteria.  Major BIC criteria are 1) Rigorous Requirements Definitions and Planning and Management Processes, 2) Appropriate Pricing Strategies, and 3) Data upon which to develop Category Management strategies and measure performance.

On March 20, 2019, OMB published M-19-13, Category Management: Making Smarter Use of Common Contract Solutions and Practices.  In this document, OMB requires agencies to carry out a set of tailored management actions and provide updates on these management actions to evaluate their progress in bringing common spending under management.  The expected result is more effectively managed contract spending through a balance of Government-wide, agency-wide, and local contracts; reduced unnecessary contract duplication and cost avoidance; and continued achievement of small business goals and other socioeconomic requirements.

Agencies shall undertake the following five key category management actions to better position themselves to bring spending under management and leverage common contract solutions and practices:
1.  Annually establish plans to reduce unaligned spend and increase the use of BIC solutions for common goods and services, consistent with small business and other statutory socioeconomic responsibilities;
2.  Develop effective vendor management strategies to improve communications with contractors, especially those that support mission-critical functions;
3.  Implement demand management strategies to eliminate inefficient purchasing and consumption behaviors;
4.  Share data across the Federal Government to differentiate quality and value of products and services in making buying decisions; and
5.  Train and develop the workforce in category management principles and practices.

To determine spend for a category, category managers use the Federal Procurement Data System (FPDS), which is the system the federal government uses to track its spending for purchases over $3,000.  FPDS uses a product service code (PSC) entered by the contracting officer.  There are 10 common spend categories and nine additional defense-centric categories; PSCs are matched to these 19 categories to determine spend for each category.  The Government Wide Category Management Program Management Office provides a dashboard, Data to Decisions (D2D), to generate category reports that is available on GSA's Acquisition Gateway.