WHAT IS BIC?
In December 2014, The Federal Office of Management and Budget (OMB) published a memo discussing a new strategic mission for federal acquisitions – a strategy focused on best value over lowest price. The strategic framework is Category Management and the resulting contract evaluation tool is the Best-in-Class (BIC) solution.
BIC is a preferred and sometimes mandatory government-wide acquisition designation for contracts and vehicles that can be used by multiple agencies and that satisfy five key criteria established by the OMB:
- Rigorous requirements definitions and planning processes
- Appropriate pricing strategies
- Data-driven strategies to change buying and consumption behavior (i.e., demand management)
- Category and performance management strategies
- Independently validated reviews
The BIC designation was applied to more than 30 contract vehicles based upon how they are vetted, managed and recommended by Government purchasers. One of the measuring tools to determine BIC designation is Spend Under Management (SUM). OMB defines SUM as “the percentage of an organizations spend that is actively managed according to category management principles—or smart decision-making to buy similar goods and services through best-value solutions. Increasing SUM will decrease costs, contract duplication, and inefficiency leading to better buying outcomes.”
Applying SUM, OMB established four tiers for existing contract or vehicles:
- Tier 3, Best-in-Class (BIC) Solutions – Dollars obligated on Best-in-Class contracts.
- Tier 2, Multi-Agency Solutions – Dollars obligated on multi-agency contracts that satisfy rigorous standards set for leadership, strategy, data, tools, and 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 and other criteria.
- Tier 0, Spend NOT Aligned to Category Management Principals – 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-tiered solutions.
As the saying goes, what gets measured, gets done. OMB has established performance metrics to contracts, this will pressure agencies to use the BIC designated solutions.