Trump Agencies Move to Centralize Contracts in Bid to Cut Costs

President Donald Trump’s administration is planning to consolidate government-wide purchasing efforts into a single agency, dismissing contract officers as it seeks to make sweeping cuts to federal spending, according to an official familiar with the effort.

The plan to make the General Services Administration a central hub for federal orders of products ranging from construction equipment to paper towels would leverage the government’s purchasing power — now scattered across more than 100 different agencies. The result will likely result in larger contractors gobbling up fewer, but higher-value contracts from the government.

The Trump administration is slated to issue guidelines to streamline federal purchasing efforts in the coming weeks, the official said, speaking on condition of anonymity to discuss plans not yet public. The GSA declined to provide details of its involvement but said it would follow whatever direction came from the White House.

A pedestrian near a General Services Administration building in Washington, DC.

Photographer: Al Drago/Bloomberg

“GSA is ready to serve the administration as we’re asked to serve and turn our expertise in procurement into a differentiated asset for the American taxpayer,” Josh Gruenbaum, the former KKR & Co. director tapped by Trump as commissioner of the Federal Acquisition Service, said in a statement.

The contract consolidation efforts demonstrate the power the executive branch has over how taxpayer dollars are directed, as Elon Musk’s Department of Government Efficiency efforts have touched off debates in Washington over control of federal finances.

Some consolidation is already underway. The Office of Personnel Management, another agency handling federal back-office issues that is often considered a sister entity to GSA, dismissed employees in its contracting office on Monday.

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OPM’s acting director, Charles Ezell, told workers in the Office of Procurement Operations that their jobs were being eliminated “as part of a broader strategy to improve efficiency and reduce the size of the agency’s workforce,” according to a dismissal notice viewed by Bloomberg News.

OPM had about 50 contracting officers as of last year, according to agency data. It was unclear how many were dismissed. An OPM spokesperson declined to comment.

Conversely, GSA terminated about as many as 40 employees in its own reduction-in-force measure on Tuesday.

More than 19,000 federal employees work in contract administration across the federal government, according to OPM data, with only 11% of them at the GSA. The consolidation would likely affect most civilian agencies, though the Defense Department and the National Aeronautics and Space Administration work under different buying regulations.

The GSA often serves as a test subject for efforts to reform government. Even when it doesn’t purchase on behalf of agencies, it enforces the federal regulations that govern almost everything the government buys.

This month, the GSA used that power to grant blanket exemptions to those regulations, allowing agencies to strip out existing contract language, freeing them from non-discrimination rules, mandates to buy paper drinking straws and more.

A federal judge in Maryland put that move on pause last week, saying Trump’s executive order to require contractors to renounce diversity, equity and inclusion measures as a requirement in getting a federal contract was likely unconstitutional.

To contact the reporter on this story:
Gregory Korte in New York at gkorte@bloomberg.net

To contact the editors responsible for this story:
Justin Sink at jsink1@bloomberg.net

Laura Davison, Meghashyam Mali

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