Contract Policy - Category Management

Category Management is a well-established commercial practice used across the world to improve total cost management. It is a continuous, market facing, end-to-end process that encompasses all aspects of spending, from demand management through sourcing, to life-cycle management and transactional efficiency. Category Management seeks to manage spending to best accomplish an organization’s mission. To do this, it classifies goods and services by their industrial categories.

Federal Spending Categories

Office of Management and Budget (OMB) established a procurement classification system that divides Federal spending into nineteen Categories. The first ten categories relate to common goods and services procured Government-wide and the latter nine categories are classified as Defense-centric and which are generally unique to the DoD.

Federal Level 1 categories for Common goods and services:

  • Information Technology
  • Professional Services
  • Security and Protection
  • Facilities and Construction
  • Industrial Products and Services
  • Office Management
  • Transportation and Logistics
  • Travel
  • Human Capital
  • Medical

Defense-centric categories:

  • Aircraft, Ships, Land Vehicle
  • Weapons and Ammunition
  • Electronic and Communication Equipment
  • Sustainment Supplies & Equipment (S&E)
  • Clothing, Textiles, and Subsistence S&E
  • Miscellaneous S&E
  • Research and Development
  • Equipment Related Services
  • Electronic and Communication Services

The Charter, found at the link below, defines the roles, responsibilities and authorities mandated thereunder, and establishes a framework that will govern the Department of Defense’s (DoD’s) Category Management activities.

Encouraging small business participation is a core tenant of Category Management. The memorandum found at the link below highlights pertinent information on how to achieve small business goals through Category Management practices.