Executive Order 14240

What It Means for Federal Procurement and Grant Recipients

On March 20, 2025, Executive Order 14240, “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement,” was issued to streamline how the federal government procures common goods and services. With federal contract spending totaling nearly $500 billion annually, the stated goals are: reduce duplication, improve efficiency, and achieve better value for the American taxpayer.

This new policy directs federal agencies to shift domestic procurement of “common goods and services” to the General Services Administration (GSA), which was originally established to centralize procurement functions. The move represents a significant structural shift—and one that may affect how grant recipients approach procurement.

Why This Executive Order Matters

While EO 14240 is directed at federal agencies, its ripple effects may be felt by state and local governments, educational institutions, and nonprofit organizations that receive federal funding. Here’s why:

Stronger Emphasis on GSA Contracts: Federal agencies may increasingly require or prefer that procurement under grants utilize GSA-approved vehicles. This could influence how recipients structure contracts and vendor relationships.
Reduced Flexibility in Sourcing: The push toward consolidated procurement may lead to new grant conditions that limit the use of alternative vendors or procurement methods, particularly for commonly categorized items like IT services, office supplies, and facility maintenance.
Alignment with Federal Category Management: Grant recipients may begin seeing increased expectations around category management, strategic sourcing, and use of pre-negotiated, federally approved contracts to avoid duplication and maximize value.
Policy and Procedure Revisions: Organizations may need to proactively review their procurement policies to ensure alignment with evolving federal standards and guidance from pass-through entities.

Looking Ahead

While EO 14240 does not directly amend 2 CFR 200 or impose immediate new requirements on non-federal entities, it represents a clear shift in federal procurement strategy. As agencies adapt to this centralized model, grant recipients should monitor changes to grant terms and procurement guidance—especially where state or federal pass-through entities begin mirroring this approach.

What You Can Do Now

Review internal procurement policies for alignment with federal category management strategies.
Stay informed about how your pass-through agencies are interpreting and implementing this EO.
Assess your use of GSA schedules and contract vehicles and consider developing internal guidance for future use.

Need help aligning your procurement process? Contact BFS.

Executive Order 14240 What It Means for Federal Procurement and Grant Recipients