Should GSA Exist?
Should GSA Exist?
Why Washington’s obsession with buying everything through one office keeps failing—and why GSA is just the latest version.
Executive Order 14240, issued in March 2025, directs federal agencies to consolidate procurement of common goods and services through the General Services Administration. The order declares it is “time to return [GSA] to its original purpose” as the government’s central procurement authority, promising to eliminate waste and save taxpayer dollars.
What it doesn’t discuss: 230 years of federal procurement history show centralization attempts consistently fail, get rolled back, or get circumvented by agencies that find centralized systems unresponsive to their mission needs.
What it doesn’t acknowledge: Agencies voluntarily use GSA for less than 20% of common spending when they have alternatives—revealed preference suggesting agencies don’t find GSA’s value proportional to its costs and constraints.
What the order doesn’t mention: GSA costs taxpayers billions annually to operate—a figure GSA obscures by claiming to be “self-funded.”note-we break down GSA’s actual taxes and fees later in the article.
Meanwhile, GSA Commissioner Josh Gruenbaum attacks federal IT resellers as “a 5% to 7% tax on the American people for very little benefit,” while GSA itself charges 0.75% to 5% in fees —and costs billion annually to maintain.
The question isn’t just what GSA costs. It’s whether that cost delivers value proportional to what taxpayers pay—and whether repeating centralization experiments that failed for two centuries will produce different results this time.
230 Years of Failed Centralization: What History Teaches
The 2025 push to consolidate procurement under GSA isn’t new—it’s the latest iteration of an experiment the federal government has tried repeatedly for 230 years. Every attempt has followed the same pattern: initial promise of efficiency, growing agency resistance, eventual rollback or circumvention.
Understanding this history matters because it reveals why centralized procurement consistently struggles—not due to bad intentions, but because of practical problems that emerge when one organization tries to serve dozens of agencies with vastly different missions and requirements.
1792-1798: Hamilton’s Experiment (Reversed in 3 Years)
According to Defense Contract Management Agency historical records, Congress’s first centralization attempt transferred Army procurement from the War Department to Treasury Secretary Alexander Hamilton in 1792. The Office of the Purveyor of Public Supplies was created in 1795 to centrally procure “all articles of supply for the Army and Navy.”
By 1798—just three years later—Congress reversed course, restoring procurement authority to the War and Navy Departments. The rapid rollback reflected what would become a recurring theme: centralized purchasing proved too unresponsive to mission-specific needs. Agencies needed control over acquisitions vital to their operations.
1812-1818: War of 1812 Collapse
Facing wartime logistics demands, Congress again centralized military procurement in 1812 under the Office of the Commissary General of Purchases, as documented in DCMA procurement history. The experiment failed spectacularly. Contractors delivered tainted provisions at inflated prices, and accountability was “almost totally lacking.”
By 1818, Congress abandoned centralized contracting and established separate bureaus (Quartermaster, Subsistence, Ordnance) to manage their own procurement. DCMA records note this decentralization improved supply delivery and reduced costs—demonstrating that distributed responsibility with clear accountability often works better than centralized control.
1933-1949: FDR’s Procurement Division Becomes GSA
According to National Archives records, President Franklin D. Roosevelt’s 1933 Executive Order 6166 created a centralized Procurement Division in Treasury, consolidating all civilian agency purchasing. This survived the Depression and World War II, largely because wartime urgency required coordination.
Post-war, the 1949 Federal Property and Administrative Services Act transformed this into the General Services Administration. As documented in the White House Office of the Federal Register, GSA’s founding legislation explicitly mandated GSA as the central procurement authority for routine supplies and services across government, promising “an economical and efficient system” for common procurement.
1949-1990s: GSA’s “Monopoly” Fails
GSA’s centralized model immediately faced resistance. By the 1970s, agencies—particularly DoD—complained that GSA’s “one-size-fits-all” contracts were slow, inflexible, and not always the cheapest. A 1979 GAO audit found “fundamental management deficiencies” in GSA’s Multiple Award Schedules, noting GSA often failed to secure the lowest prices for the government.
According to analysis by the Association of Procurement Technical Assistance Centers, the 1990s Clinton Administration reforms explicitly attacked what procurement chief Steven Kelman called GSA’s “procurement monopoly”—characterized by “slow and indifferent service” and poor pricing. The 1994 Federal Acquisition Streamlining Act (FASA) removed mandates requiring agencies to use GSA, and by 1997, GSA officially acknowledged it operated in a competitive market rather than as a mandatory source.
The reforms worked. Breaking GSA’s monopoly allowed agencies to choose vehicles based on performance and value rather than mandates. Alternative government-wide contracts emerged—NASA SEWP for IT, NIH CIO-SP for services—often delivering better results than GSA’s offerings.
1965-1996: Brooks Act IT Centralization (Repealed as Ineffective)
Perhaps the clearest centralization failure was the Brooks Act of 1965, which gave GSA exclusive authority over all federal computer purchases. According to Congressional Research Service analysis, for 31 years agencies needed GSA approval for IT contracts.
By the 1990s, this centralized IT procurement had become demonstrably ineffective. As CRS documented, technology evolved rapidly but GSA’s approval process couldn’t keep pace. The “one-size-fits-all” approach failed to serve agencies’ diverse and evolving IT needs.
Congress repealed the Brooks Act entirely in 1996 via the Clinger-Cohen Act, explicitly decentralizing IT authority back to agencies. As Federal News Network reported, this repeal represented Congressional recognition that centralized procurement in a dynamic field “eventually diminished in effectiveness.”
2014-Present: Category Management’s Limited Adoption
According to Brookings Institution analysis, the Obama Administration’s Category Management initiative attempted lighter centralization—encouraging (not mandating) agencies to use “Best in Class” contracts for common categories like IT, travel, and medical supplies.
Results were mixed at best. GAO’s 2025 report on category management noted that by 2019, agencies still conducted most purchases outside preferred government-wide solutions. Brookings analysis found the initiative achieved some savings but also shrank the federal supplier base dramatically (over 90,000 fewer vendors), squeezing out small businesses and reducing competition.
The Pattern Is Clear
Every centralization attempt follows the same arc:
Promise of efficiencythrough consolidated buying power
Agency resistanceas centralized system proves unresponsive to mission needs
Circumvention or rollbackas agencies seek flexibility and control
Decentralization prevailsuntil the next efficiency push begins the cycle again
The reasons are consistent across historical sources: Agencies resist losing control over acquisitions vital to their missions. A single centralized system cannot adapt to the varied, rapidly changing needs of dozens of federal agencies. Centralized procurement can work for commodity purchases with standardized requirements. It consistently struggles when applied broadly to specialized, mission-specific, or rapidly-evolving needs.
2025: History Repeating Itself
Executive Order 14240 directs it’s “time to return [GSA] to its original purpose”—recreating the centralized procurement model that agencies spent decades circumventing. According to GSA announcements, the agency stood up a new Office of Centralized Acquisition Services (OCAS) to execute acquisitions on behalf of all agencies, consolidating contract vehicles that currently operate independently.
As George Mason University’s Mercatus Center analysis noted, this is “sending GSA ‘back to the future’”—reviving practices that agencies found inadequate and worked around for decades. The question Executive Order 14240 doesn’t answer: If 230 years of centralization attempts have consistently been scaled back or circumvented, why will this time be different?
Understanding GSA’s Actual Role
It’s worth clarifying what GSA actually does in federal procurement—because many people, including some inside government, misunderstand its position.
GSA is not the buyer. The actual buyers are program offices and acquisition organizations at individual federal agencies—the Air Force procuring cybersecurity tools, the IRS acquiring IT systems, the VA purchasing medical supplies. GSA provides optional contract vehicles that agencies may use, primarily the Multiple Award Schedule (MAS) and several Government-Wide Acquisition Contracts (GWACs).
Until recently, other agencies also managed their own government-wide vehicles, including NASA’s SEWP program and NIH’s CIO-SP—though Executive Order 14240 has directed consolidation of these alternatives under GSA management.
In most federal procurements, GSA is not involved at all. According to OMB, less than 20% of federal “common spend” flows through GSA contracts, and that category excludes large portions of mission-specific procurement. For many agencies, GSA’s share of total procurement is far lower—sometimes under 1%. Most federal buying occurs through agency-owned contracts, open-market procurements, or other vehicles.
When agencies do choose to use GSA vehicles, the mechanics matter. In most cases, an agency identifies a requirement, funding and then determines the best way to make a procurement. GSA is one of several methods or “vehicles” available. The agency’s own contracting officers (not GSA) typically remain responsible for execution.
GSA also offers Assisted Acquisition Services—at anadditional fee of 2% to 5%—under which GSA contracting officers run the procurement on behalf of the requesting agency.
In either model, GSA controls the underlying contract architecture: base terms, pricing frameworks, vendor eligibility, and compliance rules. Every transaction through GSA vehicles is subject to GSA’s 0.75% Industrial Funding Fee (authorized under 40 U.S.C. §321), with additional fees when agencies request GSA acquisition support.
This structure introduces a layer between buyer and seller. Even when agency contracting officers retain responsibility for task orders, GSA functions as an intermediary—separating program offices from vendors at the point where pricing, terms, and access are defined.
This dynamic is not theoretical. When I ran procurement operations in DoD, we rarely used GSA contracts despite consistent GSA outreach. Instead, we relied on other available vehicles that offered faster ordering, contracting officers with relevant domain knowledge, and more direct lines between program offices and vendors. GSA frequently added procedural distance without commensurate improvement in outcomes.
This experience mirrors broader procurement behavior across government. Agencies gravitate toward vehicles that minimize distance between mission needs and execution. Where GSA adds layers, agencies often seek alternatives that preserve speed, clarity, and accountability. That reality helps explain why GSA’s share of federal procurement has remained limited for decades.
What GSA Actually Costs Taxpayers: The Full Picture
GSA claims to be “self-funded” through transaction fees rather than Congressional appropriations. This characterization appears in GSA communications and policy documents describing the agency’s fee-for-service model. But this accounting obscures fundamental truths: GSA’s operating costs run into the billions of dollars annually, funded entirely by taxpayers, and GSA charges far more than the 0.75% Industrial Funding Fee most people associate with the agency.
AccordingtoUSAspending.gov, GSA obligated $41.9 billion in FY2025 (data current through September 29, 2025). However, the vast majority represents pass-through costs—money flowing from agencies to vendors, landlords, and contractors. GSA’s own budget classifications identify these as “FLOW-THRU” expenses, providing unusual transparency into what GSA actually spends versus what passes through its accounts.
The True Cost of GSA’s Fees
GSA’s fees extend far beyond the 0.75% Industrial Funding Fee:
For Schedule Purchases (0.75% IFF):Every transaction through GSA Multiple Award Schedules is subject to the Industrial Funding Fee, authorized under 40 U.S.C. §321. On $51.5 billion in FY2024 MAS sales, this generated $386 million—collected from agencies’ appropriated budgets.
For Assisted Acquisition Services (2-5% additional):When agencies request GSA contracting officers to run procurements on their behalf, GSA charges an additional 2% to 5% of contract value according to GSA’s Congressional Budget Justification and GAO reports on interagency contracting. This is on top of the 0.75% IFF and the agency’s own acquisition workforce costs.
For Government-Wide Acquisition Contracts (variable fees):Different GWACs charge different access fees beyond the standard IFF, depending on complexity and services provided.
For Building Space (built into rent):Agencies pay GSA approximately $10.5 billion annually for building space according to GSA’s Agency Financial Report. While $5.7 billion of this passes through to private landlords as lease payments, the remainder funds GSA’s building operations and management overhead.
What GSA Actually Costs to Operate
Breaking down GSA’s $41.9 billion in total obligations:
Pass-Through Costs: At least $35 billion
GSA’s budget explicitly labels the following as “FLOW-THRU”—money going to vendors, landlords, and contractors rather than funding GSA operations:
Assisted Acquisition Services flow-through: $19.6 billion
Travel, transportation, and logistics flow-through: $4.3 billion
General supplies and services flow-through: $1.8 billion
IT category flow-through: $378 million
Other acquisition categories: $322 million
Rental payments to private landlords: $5.7 billion
Contractor payments for construction and repairs: approximately $3 billion (verified through object class analysis showing over 90% goes to contractors)
Total documented pass-through: $35.2 billion
These are legitimate costs agencies would incur regardless—they need products, services, and building space. The question is whether they need GSA in the middle charging fees to facilitate these transactions.
GSA Operating Costs: Multiple billions annually
What remains after subtracting clear pass-through costs represents GSA’s actual operating overhead:
Acquisition Services Operations (approximately $1.8 billion):
Acquisition Services Fund operating expenses and reserves
Personnel, management, and support functions for procurement vehicles
Building Operations (multiple billions):
Operations and maintenance of GSA-managed facilities
Personnel managing building projects and services
Project management overhead on infrastructure spending
Other Operating Functions (over $1 billion):
Working Capital Fund providing shared services
Citizen-facing portals and technology services
Government-Wide Policy operations
Inspector General oversight
Central administrative functions
Technology modernization initiatives
Conservative estimate: GSA’s operating costs exceed $6 billion annually. More comprehensive accounting approaches $8 billion. What’s certain: GSA costs taxpayers multiple billions of dollars each year to operate.
The “Self-Funded” Fiction
When GSA claims to be “self-funded,” here’s what that actually means:
❌Not:“Taxpayers don’t pay for GSA’s operations” ✅Actually:“We collect money from other agencies’ appropriated budgets instead of receiving direct Congressional appropriations”
Where GSA’s Operating Costs Come From:
According to GSA financial reports andUSAspending.govdata, GSA funds its operations through:
Transaction fees (approximately $1 billion annually):
0.75% Industrial Funding Fee on Schedule purchases
2-5% Assisted Acquisition Services fees
GWAC and vehicle access fees
All paid by agencies using their Congressional appropriations—taxpayer dollars
Direct Congressional appropriations (over $400 million annually):
Visible inUSAspending.govas individual appropriated accounts
Direct taxpayer funding for GSA operations, Inspector General, technology modernization, and administrative functions
Agency rent payments (billions annually, net of landlord pass-through):
Agencies pay over $10 billion for building space
After paying landlords $5.7 billion, substantial funds remain for GSA building operations
Paid from agencies’ facility budgets—taxpayer dollars
Internal transfers (additional billions):
Working Capital Fund and other intragovernmental payments
Originate from taxpayer-funded agency budgets
Every dollar—whether collected through fees, rent, or appropriations—originates as taxpayer money appropriated to federal agencies.GSA’s operations cost taxpayers multiple billions annually; the money is simply collected indirectly through agency budgets rather than appearing as a direct line-item appropriation to GSA.
Why This Matters
According to GAO reports on interagency contracting, agencies maintain their own acquisition workforces whether they use GSA vehicles or not. When an agency pays GSA fees on a procurement, that agency still employs the contracting officers, program managers, and specialists who evaluated requirements, competed task orders, and awarded contracts.
GSA’s fees don’t replace acquisition costs—they add to them.
This is why agencies voluntarily used GSA for less than 20% of common spending when alternatives existed, according to OMB data. Many agencies concluded that paying billions in GSA fees and overhead on top of their own acquisition costs didn’t deliver proportional value, particularly when alternatives like NASA SEWP charged 0.34% (less than half GSA’s 0.75% rate) and provided faster, more specialized service.
The Cost Nobody Discusses
When Executive Order 14240 mandates increased GSA usage, it doesn’t mention:
GSA costs multiple billions annually to operate—not just the 0.75% fee most people know
GSA charges up to 5% additional for assisted acquisition services
Agencies pay for both their own acquisition workforces and GSA’s overhead
The total cost includes fees, appropriations, and rent—all taxpayer dollars
Historical centralization attempts have consistently cost more than alternatives while serving agencies less effectively
The question isn’t whether GSA provides any value—for certain purchases with standardized requirements, centralized buying can work. The question is whether GSA’s multi-billion dollar operating cost delivers value proportional to what taxpayers pay, especially when agencies voluntarily chose alternatives 80% of the time when they had choices.
Where GSA Provides Limited Value
To be fair, GSA’s centralized approach provides value for certain types of purchases. GSA’s Multiple Award Schedules can deliver genuine benefits for commodity purchases—office supplies, furniture, standard IT equipment—where standardized requirements and volume buying make sense.
For a small agency needing laptops or office chairs, using a pre-competed GSA Schedule with established pricing is faster and often cheaper than running an independent competition. This is legitimate value. Pre-qualified vendor lists with negotiated pricing save time on routine procurements. Volume discounts on standardized products benefit agencies that lack scale to negotiate effectively on their own.
The challenge is that this value applies to a narrow category of purchases: common, standardized, commodity items with stable requirements. But Executive Order 14240 goes far beyond this use case, consolidating specialized IT vehicles, complex service contracts, and mission-specific procurement into GSA’s centralized model—precisely where history shows centralization struggles.
Where GSA Adds Cost Without Proportional Value
The problems with GSA’s model become apparent in several areas documented by GAO and agency experience:
Mission-Specific Procurement Needs Flexibility
Federal agencies’ procurement needs are extraordinarily diverse. DoD’s cybersecurity requirements differ fundamentally from civilian agencies. Research organizations need different contract structures than operational bureaus. Intelligence agencies have unique security requirements. Mission-driven agencies need flexibility to adapt quickly to changing threats, technologies, and operational realities.
A centralized, one-size-fits-all approach cannot accommodate this diversity effectively. According to 2005 Congressional testimony, GSA’s then-Administrator noted that even when GSA negotiated excellent telecom rates—better than commercial pricing—only about 10% of agencies in some regions actually used the GSA contracts. The rest procured elsewhere because they prioritized control, speed, and specific requirements over marginal price savings.
Agencies Maintain Acquisition Workforces Regardless
A common justification for GSA vehicles is that they reduce agency costs by eliminating duplicative procurement functions. This misunderstands how federal acquisition works.
Agencies maintain contracting officers, program managers, and specialists whether they use GSA vehicles or not. According to GAO reports on interagency contracting, when an agency uses a GSA Schedule, its acquisition professionals still must define requirements, conduct market research, evaluate quotes, compete task orders among Schedule holders, award contracts, and manage performance. Using a GSA vehicle doesn’t eliminate this work—it narrows the vendor pool and changes some procedural steps, but agencies still perform substantial procurement work.
GSA’s fees are additional costs layered on top of agencies’ existing acquisition infrastructure, not a replacement for it. This is why GSA’s multi-billion dollar overhead matters—it’s pure additional cost, not savings from eliminated agency functions.
GSA Fees Add to, Not Replace, Costs
When an agency pays GSA the 0.75% Industrial Funding Fee on Schedule purchases, 2-5% for Assisted Acquisition Services, or its portion of rent payments for building operations overhead, the agency still pays its own contracting officers, program managers, and acquisition staff. These costs don’t disappear because GSA provided a pre-competed vendor list.
From my experience managing over $82 billion in DoD contracts, our acquisition workforce remained constant regardless of whether we used GSA Schedules, other contract vehicles, or direct procurements. The vehicle choice affected which vendors we could access and what procedures we followed—but it never reduced our staffing requirements or costs.
Historical Pattern: Agencies Work Around GSA When They Can
The 2005 Congressional testimony showing 90% of agencies avoiding GSA telecom contracts demonstrates that even when GSA negotiates favorable rates, agencies often choose alternatives because control, speed, and mission fit matter more than marginal price savings.
This pattern persisted for decades. According to APTAC analysis of 1990s reforms, when FASA allowed agencies to bypass GSA, many did—choosing alternative vehicles or direct procurement. GAO’s 2025 report on Category Management shows agencies still conduct most purchases outside preferred government-wide solutions when they have alternatives.
This isn’t agencies being wasteful. It’s agencies making informed trade-offs between centralized pricing and the flexibility, speed, and mission fit they need to operate effectively.
The Critical Questions GSA Doesn’t Answer
If GSA’s model delivers clear value, several patterns documented in official reports require explanation:
Why do agencies voluntarily use GSA for less than 20% of common spending?According to OMB data, for decades agencies had the option to use GSA vehicles but chose alternatives 80% of the time. This revealed preference suggests agencies don’t find GSA’s value proportional to its constraints and costs.
Why did 90% of agencies avoid GSA telecom contracts despite better pricing?The 2005 Congressional testimony demonstrates that even when GSA negotiates favorable rates, agencies often choose alternatives because control, speed, and mission fit matter more than marginal price savings.
Why was the Brooks Act repealed after 31 years?Congressional Research Service analysis shows Congress explicitly recognized that centralized IT procurement through GSA “eventually diminished in effectiveness” and couldn’t keep pace with technology evolution or serve agencies’ diverse needs.
Why has every major centralization push been rolled back or circumvented?From Hamilton’s 1792 experiment documented in DCMA records to the 1990s GSA monopoly broken by FASA, agencies have consistently worked around centralized procurement when it doesn’t serve their needs—not through ignorance, but through informed judgment about what works.
These aren’t rhetorical questions. They’re evidence from official government sources that centralized procurement delivers value in limited circumstances but struggles when applied broadly.
The 2025 Consolidation: Absorbing What Works Into What Doesn’t
Executive Order 14240’s most revealing aspect isn’t what GSA claims to fix—it’s what GSA is eliminating.
Following the March 2025 Executive Order, GSA began negotiations to absorb NASA SEWP and NIH CIO-SP—two government-wide contract vehicles that agencies voluntarily chose when both GSA and these alternatives were available.
What Made These Alternatives Work
According to Federal News Network and Washington Technology reporting on the consolidation:
NASA SEWP:
0.34% transaction fee (less than half GSA’s 0.75%)
24-hour product onboarding (compared to GSA’s more bureaucratic processes)
Small specialized team with deep IT expertise
Voluntary agency adoption based on performance
NIH CIO-SP:
Specialized in complex IT and professional services
Mission-focused acquisition strategies
Strong customer relationships and technical expertise
These weren’t failed experiments requiring rescue—they were successful alternatives demonstrating that specialized, efficiently-run vehicles could deliver better results at lower cost than GSA’s generalist approach.
Industry Warnings About Consolidation
When GSA’s SEWP takeover was announced, industry experts immediately identified risks documented in analyses by RJM Technologies, Vertosoft, and VisibleThread:
SEWP’s 0.34% fee will rise to GSA’s 0.75% standard to cover higher overhead
24-hour product onboarding will slow under GSA’s bureaucratic structure
Specialized expertise will dilute into GSA’s centralized workforce
Small business access will decrease as processes become more complex
Innovation will decline as flexible, specialized approaches give way to standardized procedures
As RJM Technologies analysis warned, consolidation could create “a top-heavy, slow-moving procurement machine” that struggles to adapt to new technologies.
The Pattern Revealed
Rather than asking why GSA costs billions annually and can’t match SEWP’s 0.34% fee structure or performance, Executive Order 14240 eliminates the alternatives by absorbing successful vehicles into GSA’s higher-cost model.
When agencies had the choice between GSA Schedules and SEWP for IT purchases, many chose SEWP. The 2025 consolidation removes that choice—mandating agencies use GSA’s model whether it serves them better or not.
GSA’s Attack on Resellers: Missing Its Own Role
GSA’s criticism of resellers for imposing “5% to 7% taxes” deserves scrutiny—particularly given GSA’s own fee structure and costs.
The Reality of Reseller Margins
GSA characterizes reseller fees as uniformly “5% to 7%,” but industry sources consistently report that reseller margins frequently run as low as 1% to 2% on commodity software transactions—far below GSA’s stated range.
Moreover, agencies routinely conduct competitions among GSA Schedule holders that drive prices below published rates. Schedule prices are ceilings—vendors regularly bid below those rates to win specific competitions. Actual transaction prices often fall well below published Schedule rates.
What Resellers Actually Provide
Resellers exist in federal procurement because they provide services that create value:
Integration and technical services:For complex deployments, resellers provide substantial technical services beyond product delivery. Higher margins in these cases reflect actual value creation.
The Irony of GSA’s Position
GSA criticizes resellers for being unnecessary intermediaries between agencies and OEMs. But GSA itself functions as an intermediary—one that charges 0.75% on all Schedule transactions (plus 2-5% for assisted acquisition), costs billions annually to operate, and adds layers between agencies and vendors at the contract level.
The difference is that agencies can choose whether to use resellers based on value delivered. Executive Order 14240 eliminates choice by mandating increased GSA usage—forcing agencies to pay GSA’s fees and accept GSA’s constraints whether GSA adds value or not.
Let the Market Decide
If OEMs find resellers valuable for handling federal compliance, risk management, and market access, they should be free to use them. If agencies find reseller services worth the margins charged, they should be free to choose them. If resellers don’t provide sufficient value, market forces will reduce their role without government mandates.
Government’s role should be ensuring transparency and compliance—not dictating which business models are acceptable or capping margins for services agencies voluntarily purchase.
What Should Actually Happen
The path forward requires acknowledging complexity rather than treating procurement as a binary choice between centralization and status quo.
Equip Agencies to Manage Their Own Acquisitions
From two decades managing over $82 billion in DoD contracts, including as the first program manager for Advanced Battle Management System and managing foreign military sales for Saudi Arabia, the most efficient procurements shared common elements: program managers who deeply understood mission requirements, skilled acquisition professionals who ensured regulatory compliance, and direct engagement with contractors who could deliver.
Whether that path included contract vehicles, resellers, or direct OEM relationships depended on the specific requirement. Sometimes GSA Schedules worked well for commodity purchases. Sometimes specialized vehicles delivered better results. Sometimes direct procurement served missions better despite requiring more agency effort.
Agencies are best positioned to make these judgments—they understand their missions, they employ trained acquisition professionals, and they bear responsibility for outcomes.
The solution isn’t giving GSA more to do, particularly when GSA costs billions annually, agencies avoided it 80% of the time when they had alternatives, and history shows centralization consistently adds layers without adapting to diverse needs. The solution is ensuring agencies have the resources, training, and authority to manage their own acquisitions effectively.
Let Markets Work Where They Can
If OEMs want to use resellers to handle federal compliance, risk management, and market access, let them. If agencies find reseller services valuable, let them choose those services. If resellers don’t provide sufficient value, agencies will choose alternatives.
Market forces work when agencies have genuine choice. The 1990s reforms that broke GSA’s monopoly improved federal procurement by allowing agencies to choose vehicles based on performance rather than mandates. Alternative government-wide contracts like SEWP emerged and often outperformed GSA’s offerings—demonstrating that competition drives better results than monopoly.
Reversing those reforms by consolidating vehicles into GSA and mandating increased use removes the market feedback that drove improvement.
The Cost-Benefit Question
For billions of dollars annually, taxpayers deserve evidence that GSA delivers proportional value—not just assertions that centralization theoretically should work, or mandates forcing agencies to use GSA despite their revealed preferences.
The evidence suggests GSA provides limited value for commodity purchases but struggles when applied broadly. History shows centralization repeatedly fails to serve diverse agency needs. Agencies voluntarily avoided GSA 80% of the time when alternatives existed. Successful alternatives like SEWP operated at half GSA’s fee structure.
Conclusion
Executive Order 14240 mandates increased GSA use, repeating a centralization experiment that has failed for 230 years. Three facts deserve consideration:
First, GSA’s operating costs run into the billions annually—funded entirely by taxpayers despite “self-funded” claims. Conservative estimates exceed $6 billion annually; more comprehensive accounting approaches $8 billion. This overhead exists on top of agencies’ own acquisition workforces, not instead of them. While GSA facilitates over $35 billion in transactions to vendors and landlords (legitimate costs agencies would incur anyway), the multi-billion dollar operating cost is what taxpayers pay for GSA’s intermediary role.
Second, federal procurement centralization has failed repeatedly across more than two centuries.From Hamilton’s 1792 Treasury consolidation (reversed in 3 years) to the Brooks Act’s IT centralization (repealed in 1996 as ineffective) to Category Management (achieving limited adoption), every attempt has followed the same pattern: initial promises, agency resistance, eventual rollback or circumvention. The reason is consistent—centralized systems cannot adapt to varied, mission-specific needs of dozens of federal agencies.
Third, agencies voluntarily avoided GSA for 80% of common spending when alternatives existed—not through ignorance or waste, but because alternatives often delivered better value. When 90% of agencies avoided GSA telecom contracts in 2005 despite favorable pricing, they signaled that control, speed, and mission fit often matter more than marginal savings. When agencies chose SEWP over GSA Schedules for IT purchases, they demonstrated that specialized, efficient vehicles could outperform GSA’s generalist approach.
Executive Order 14240 doesn’t ask why agencies avoided GSA or whether billions in overhead delivers proportional value. It mandates increased GSA use while eliminating alternatives like SEWP that worked better at half the cost. This isn’t reform—it’s repeating centralization experiments that have failed for 230 years while removing the market feedback that exposed those failures.
My conclusion from managing major defense acquisitions: GSA provides limited value for certain purchases. But that value doesn’t justify billions in annual overhead, eliminating successful alternatives, or mandating what agencies rejected voluntarily for decades.
The better path is equipping agencies to manage their own acquisitions effectively. Agencies employ trained acquisition professionals who understand their missions and bear responsibility for outcomes. They should have authority to choose procurement approaches—GSA vehicles when they provide value, other vehicles when they don’t, direct procurement when it serves missions better, resellers when their services justify margins.
Don’t get me wrong, GSA is NOT directed to take over ALL acquisitions for ALL government agencies, but certainly, there is a push to use it more. My question is, should we really be doing this?
Let markets work. If GSA delivers value, agencies will choose it without mandates. If resellers provide services worth their margins, OEMs and agencies will use them. If alternatives like SEWP work better at lower cost, preserve them rather than absorbing them into more expensive models.
History provides clear guidance: centralized procurement works in limited circumstances but fails when applied broadly. Forcing what agencies rejected voluntarily won’t change that pattern—it will simply repeat failures at higher cost while eliminating alternatives that proved centralization isn’t necessary.
The evidence suggests Executive Order 14240’s approach—mandating what agencies avoided, eliminating alternatives they preferred, and repeating experiments that failed for 230 years—won’t improve federal procurement. It will make it more expensive, less flexible, and less responsive to the diverse missions agencies must accomplish.
Methodology Note
This analysis relies on federal spending data from USA Spending for fiscal year 2025 (current through September 29, 2025). GSA’s total obligations of $41.9 billion were analyzed by federal account, program activity, and object class to distinguish between pass-through costs and GSA’s operating overhead.
GSA’s own budget classifications identify $26.5 billion as “FLOW-THRU” spending (money going to vendors, landlords, and contractors) versus $1.82 billion explicitly designated as “OPERATING” expenses in the Acquisition Services Fund. Federal Buildings Fund analysis shows $5.7 billion in rental payments to private landlords (clear pass-through), with additional billions in building operations and project management.
After excluding documented pass-through costs, GSA’s operating overhead—the actual cost of running the agency—ranges from approximately $6 billion (conservative estimate) to $8 billion (more comprehensive accounting). What’s certain: GSA costs taxpayers multiple billions of dollars annually to operate, funded through transaction fees, Congressional appropriations, and agency rent payments—all originating from taxpayer dollars.
This calculation is conservative, using GSA’s own classifications where available and excluding ambiguous categories from overhead calculations.
Sources & References
USAspending.gov data: General Services Administration obligations by federal account, program activity, and object class (FY2025, data current through September 29, 2025)
Federal procurement history: Defense Contract Management Agency: "A History of Defense Contract Management" (dcma.mil) National Archives: Records on General Supply Committee and Procurement Division establishment (archives.gov) Congressional Research Service: Reports on federal procurement history and the Brooks Act (everycrsreport.com)
Congressional and agency documents: Congressional Research Service reports on GSA funding (congress.gov) GSA FY2023 Agency Financial Report (gsa.gov) GSA FY2024-2025 Congressional Budget Justifications (gsa.gov) 40 U.S.C. §321 (statutory authorization for Industrial Funding Fee) OMB data on common spend through GSA contracts
Government Accountability Office: Reports on category management and centralization initiatives (gao.gov) GAO-11-784: "Interagency Contracting: Improvements Needed in Setting Fee Rates for Selected Programs" October 2025 report on procurement consolidation 1979 audit on GSA Multiple Award Schedules deficiencies
Inspector General reports: GSA Office of Inspector General, "Audit of the Multiple Award Schedules Program" (2007) (gsaig.gov)
Executive actions: Executive Order 14240 "Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement" (March 20, 2025) (whitehouse.gov, gsa.gov)
SEWP consolidation reporting: Federal News Network: "GSA in negotiations with NASA to take over SEWP contract" (May 21, 2025) (federalnewsnetwork.com) Washington Technology: "GSA to take over SEWP VI contract 'sooner rather than later'" (December 5, 2025) (washingtontechnology.com) Vertosoft: "SEWP VI Status Update" (July 21, 2025) (vertosoft.com) RJM Technologies: "The Hidden Risk in the New Executive Order Consolidating IT Procurement in GSA" (March 27, 2025) PilieroMazza: Legal analysis of Executive Order 14240 (pilieromazza.com) VisibleThread: "The GovCon Slowdown or Shake-Up?" (July 30, 2025) (visiblethread.com)
Congressional testimony: 2005 Senate testimony on GSA contract usage rates and agency adoption patterns (govinfo.gov)
Historical procurement analyses: Brookings Institution: Analysis of Category Management impacts (brookings.edu) George Mason University Mercatus Center: Commentary on centralization attempts (business.gmu.edu) Association of Procurement Technical Assistance Centers: Analysis of 1990s procurement reforms (theasbc.org)
