US federal CIO urges vendors to offer government ‘best-and-final-first pricing’
Gregory Barbaccia, chief information officer of the US federal government, has warned companies not to submit “balloon quotes” when bidding for government contracts, and said procurement incentives should be changed to save taxpayer dollars.
In a LinkedIn Post last week, Barbaccia gave the example of a “household-name vendor” that had provided a quote to an agency for a “simple system”, only to drop the price by 40% the following day after the price was questioned.
“That isn’t a discount. That’s an admission that the first price was made up,” he said.
“This is the game too many vendors play in government contracting: start high, see if anyone blinks, then ‘magically’ discover they can cut the price almost in half when challenged. In the private sector, that’s called a negotiation tactic. In government, it’s unacceptable. Why? Because every inflated dollar means fewer taxpayer resources for mission outcomes.”
He said that if a vendor is able to slice 40% off a quote overnight, it means either that the original number was “padded beyond recognition” or that the “so-called ‘discount’ is designed to make the buyer feel like they’ve won, when in reality, the vendor always planned to land there… Either way, taxpayers lose”.
If a vendor offers a large discount after pushback, “that should raise flags about credibility”, he added.
To prevent such occurrences, he said government needed to “change the incentives”, including setting an expectation that companies put forward “best-and-final-first pricing”, and ensuring price transparency across agencies.
If one agency is paying US$10m and another is paying US$15m for the same system, “we should know that”, he said. “Those numbers used to be siloed, but unfortunately [for vendors], we CIOs now talk – a lot.”
“The days of balloon quotes followed by miraculous discounts should be over. Government can’t afford to play poker with taxpayer dollars.”
He concluded: “The message is simple: If the first number isn’t real, neither are you.”
Gregory Barbaccia will be speaking at Government Service Delivery which will bring together global digital government leaders to explore how governments can use tech-driven innovation to deliver high-quality public services. The event will be held at Walter E Washington Convention Center, Washington DC on November 13 – 14, 2025. Find out more and register here
Trump’s move to centralise procurement
In March, president Donald Trump signed an executive order titled Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement, which empowered the General Services Administration (GSA) to take on federal procurement responsibilities.
The GSA, which oversees government property, shared central contracts and leased vehicles, was given additional duties under the order in a bid to ensure federal government procurement is “carried out in the most efficient and effective manner possible for the American taxpayer”.
Trump said it was time to return the GSA to its original purpose of improving procurement, “rather than continuing to have multiple agencies and agency subcomponents separately carry out these same functions in an uncoordinated and less economical fashion”.
Consolidating domestic federal procurement in the GSA would “eliminate waste and duplication”, the order stated.
The US federal government spends approximately US$490bn on federal contracts for common goods and services each year.
Read more: US federal government departments reopen deferred resignation programmes
Notable deals with Google and xAI
Under an agreement with the GSA announced in April, Google offered its Workspace software suite – which includes applications such as Gmail, Google Drive and Google Docs, as well as AI tools like Gemini and NotebookLM – to all federal agencies at a temporary discount of 71% of its usual price until September 30.
The GSA called it a “landmark agreement” and said: “The Workspace agreement marks a step forward in GSA’s work with Google and other companies to create cost savings for the federal government.”
The discount was available through the GSA’s Multiple Award Schedule (MAS) contract programme, which allows agencies to purchase products and services from approved vendors at pre-negotiated rates.
The Google agreement was based on the volume of the entire government rather than the lower discounts previously available through separate agreements on an agency-by-agency or transactional basis.
“This common-sense pricing model reflects GSA’s growing role as a central hub for government procurement, leveraging the full purchasing power to negotiate cost savings, reduce redundancy and streamline IT acquisition,” the GSA said.
It was also announced earlier this month that the GSA had agreed a deal with xAI to make its Grok AI models accessible to federal agencies for US$0.42 per organisation until March 2027.
Elon Musk – who headed up the Department of Government Efficiency (DOGE) at the request of president Donald Trump before stepping down in May – is the co-founder and CEO of xAI.
The agreement includes access to Grok 4 and Grok 4 Fast models, which have advanced capabilities in various AI applications, including natural language processing and reasoning tasks.
The deal is part of the GSA’s OneGov initiative, which aims to simplify IT procurement.
Read more: US secures large government-wide software discount with Google
Empowering federal CIOs
In July, Eric Ueland, deputy director for management in the Office of Management and Budget (OMB), called for CIOs in federal government departments to be empowered to better coordinate on best practices and technology solutions, and said the OMB was committed to procurement reform.
Global Government Forum’s From Lagging to Leading: The Opportunity for a Breakthrough in U.S. Government Digital Service Delivery report – published ahead of last November’s presidential election to help inform the next government’s agenda – called for an increase in CIO discretion and to expand the scope of shared initiatives to better share what works across the federal government.
Read more: Trump and DOGE demand centralised tech systems to track spending
About Mia Hunt
Mia has been editor of globalgovernmentforum.com since 2019. She has 15 years’ experience as a journalist and editor and specialises in writing for civil and public servants worldwide, including covering sustainability policy and related issues. She has led the Global Government Women’s Network since it launched in 2023. Previously, she covered commercial property having been market reports and supplements editor at Property Week and deputy editor at Retail Destination. She graduated from Kingston University London with a first-class honours degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.
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