MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
Franklin D. Raines
Multiagency contracts under the Information Technology Management
Reform Act of 1996
This memorandum authorizes agencies to enter into multiagency contracts for
information technology and sets forth good management practices to be followed
by agencies that do so.
Section 5124(a)(2) of the Clinger-Cohen Act (formerly the Information
Technology Management Reform Act of 1996)(ITMRA), 40 U.S.C. 1424(a)(2), states
that an Executive agency may "enter into a contract that provides for
multiagency acquisitions of information technology in accordance with guidance
issued by the Director." The accompanying Conference Report, H.Rep.
104-450, states that "the requirements and limitations of the Economy Act,
and other provisions of law, apply to these multiagency acquisitions."
Accordingly, to the extent practicable, and consistent with the requirements of
the Economy Act, 31 U.S.C. 1535, and other relevant provisions of law, agencies
may permit use of their contracts by other agencies, and award contracts for
This guidance is limited to multiagency contracts issued by agencies
pursuant to Section 5124(a)(2) of ITMRA, 40 U.S.C. 1424(a)(2). Under Section
5124(a)(3) of ITMRA, 40 U.S.C. 1424(a)(3), the Director may authorize an agency
to enter into a multiagency contract for procurement of commercial items of
information technology that requires each agency covered by the contract either
to procure the items under that contract or to justify an alternative source of
the items. Similarly, under Section 5112(e) of ITMRA, 40 U.S.C. 1412(e), the
Director may designate one or more heads of Executive agencies as executive
agents for government-wide acquisitions of information technology. The CIO
Council is encouraged to identify appropriate candidates. This guidance does
not apply to contracts under Sections 5124(a)(3) and 5112(e).
The ITMRA provides agencies the flexibility to acquire information
technology effectively and efficiently. Multiagency contracts permit aggregation
of agency demand to encourage vendors to offer the best possible prices, and
serve to reduce the overhead associated with multiple acquisitions, particularly
by smaller agencies. In order to realize these benefits, a management
commitment commensurate with the potential size of the contracts is essential.
This is especially important because customer demand can be difficult to
anticipate, potentially exceeding the agency's ability to manage the contracts,
disrupting business relationships among agency customers and vendors.
Agency heads should, with regard to multiagency contracts:
assure that their Chief Information Officers and Senior Procurement Executives work together to assign
responsibilities and establish clear lines of accountability;
see that the agency component conducting the acquisition has established
effective contract management systems and has an adequately trained and sized
staff available to administer the resulting contracts;
monitor the progress of the contracts and ensure that adequate management
resources continue to be devoted, particularly if the contracts prove to be
unexpectedly popular or otherwise begin to strain existing management resources;
assure agency compliance with Federal Acquisition Regulation section
16.504(a) by setting an initial dollar or quantity limit on such contracts; and,
consider placing an initial limit on the amount of interagency usage,
subject to periodic adjustment (either upward or downward) depending on the
agency component's demonstrated ability to adequately manage the contracts in
light of the volume of orders received.
If you need further information regarding this guidance please contact the
Office of Information and Regulatory Affairs, (202)395-3785. If you need
information regarding procurement-related issues please contact the Office of
Federal Procurement Policy, (202)395-3501.
OMB continues to review procurement-related matters on the use of
multiagency contracts and will issue additional guidance in the future as
appropriate. This memorandum supersedes OMB Memorandum M-96-36, issued August 6,