Spend Under Management (SUM)

Spend Under Management is a category management metric that measures what proportion of an agency's total procurement spending is directed through high-quality, well-managed contract vehicles rather than one-off purchases or poorly tracked contracts.

What is Spend Under Management (SUM)?

Spend Under Management (SUM) is a key performance metric in federal category management that tracks the percentage of total addressable procurement spending that is channeled through managed contracts - defined as contracts that meet standards for competitive pricing, data transparency, supplier management, and compliance visibility.

The federal government uses a three-tier model to classify spending:

• Tier 1: Agency-unique contracts or purchase orders with limited management oversight and no cross-agency coordination. Lowest value tier.
• Tier 2: Multi-agency contracts (MACs) or agency-wide contracts with moderate management. Better than Tier 1 but not achieving the highest standards.
• Tier 3 (Best-in-Class): OMB-designated contracts (BIC) meeting the highest standards for data sharing, vendor management, and price transparency. The target destination for managed spending.

SUM is calculated as: (Tier 2 + Tier 3 spending) / Total category spending, with BIC/Tier 3 spending being the most valued component. OMB's President's Management Agenda has set government-wide SUM improvement targets, and agency category managers report progress quarterly.

Beyond the federal government, "spend under management" is used by private sector procurement professionals as a core supply chain metric - the higher the percentage of spending flowing through managed contracts, the better the organization understands and controls its costs.

Why Spend Under Management matters for government contractors

The government's drive to increase SUM means contracting officers face institutional pressure to use pre-existing, well-managed contract vehicles rather than creating new standalone contracts. Contractors not on the "right" vehicles are increasingly passed over in favor of those already on BIC vehicles, MACs, or government-wide acquisition contracts (GWACs). Being on the vehicles where managed spending flows is as important as winning any individual contract.

Example

An agency's IT procurement office reviews its annual spending data and discovers that only 34 percent of its $120 million IT spend flows through Tier 3 (BIC) vehicles, with the remainder spread across 287 individual contracts and purchase orders. OMB's category management target for the IT category is 70 percent BIC utilization. The category manager develops a three-year plan to migrate IT spending: consolidating desktop support services onto an OASIS+ BIC task order, shifting IT hardware purchases to SEWP V, and migrating cloud services to approved FedRAMP BIC vehicles. By year three, the agency's SUM reaches 68 percent, approaching the target.

Frequently Asked Questions

How is "addressable spend" defined for SUM purposes?

Addressable spend excludes unique, mission-critical, or classified procurement that cannot practically be performed through shared vehicles. What remains - common commercial goods and services - is the addressable universe for SUM measurement. Agencies work with OMB to define their addressable spend baseline to avoid inflating the denominator with truly non-addressable requirements.

Does higher SUM always mean better procurement outcomes?

SUM is a structural metric, not a direct quality measure. High SUM indicates spending is flowing through managed channels, which creates the conditions for good oversight and competitive pricing. But a BIC vehicle with poor supplier performance or stale pricing would have high SUM without good value. SUM should be considered alongside cost savings, contract performance ratings, and competition metrics.

How does SUM relate to the number of active contracts an agency has?

One driver of low SUM is contract proliferation - agencies establishing too many new standalone contracts for needs that BIC vehicles could address. Reducing the number of new contract actions (by redirecting to BIC vehicles) simultaneously increases SUM and reduces the administrative burden of managing hundreds of small individual contracts.

Can small businesses benefit from SUM initiatives?

Yes, if they are on the BIC and Tier 2 vehicles that agencies direct their managed spending to. OMB and GSA require that BIC vehicles include meaningful small business access, either through separate small business pools (OASIS+ SB domain) or through small business ordering set-asides within the vehicle. Small businesses that get positioned on high-SUM vehicles before agencies redirect their spending gain outsized access to the consolidated volume.