The Obama administration decided to dust off the idea that the government is one big shopper and not 130 medium-sized buyers as part of its Campaign to Cut Waste.
Past administrations have tried and failed to get agencies to take advantage of volume discounts. But the Office of Federal Procurement Policy’s push during the past three years finally has resonated with agencies.
Former OFPP Administrator Dan Gordon issued a memo in December 2009 detailing strategic sourcing as a priority.
Why the strategic sourcing was rated effective
Reason #1: OFPP issues memo on achieving value for acquisitions
(More primary source material available on The Obama Impact Resource Page)
The General Services Administration created a blanket purchase agreement with 15 companies for office supplies. It also is moving print management, mobile devices and service plans and IT hardware to strategic sourcing vehicles to take advantage of similar bulk-purchasing prices.
On Performance.gov, OMB reports the government is saving $40 million a year on office supplies, expects to save 30 percent off printing and copying costs, and expects to save at least $100 million on wireless devices by the end of fiscal 2013.
For those reasons, Federal News Radio believes the push for greater strategic sourcing has been effective. The rating is part of Federal News Radio’s special report, The Obama Impact: Evaluating the Last Four Years. Throughout the series, Federal News Radio examines 23 different ideas and initiatives instituted by the Obama Administration and ranks them as effective, ineffective and more progress needed.
Congress also is seeing the benefits of strategic sourcing. Sens. Scott Brown (R-Mass.), Susan Collins (R-Maine) and Joe Lieberman (I-Conn.) co-authored the Acquisition Reform Bill in 2011 to require more robust use of federal strategic sourcing vehicles, which allow the government to consolidate its shopping lists and buy in bulk rather than have each agency pursue its own smaller procurement contracts.
Strategic sourcing isn’t without its detractors, though. Small businesses, especially those that sell office supplies to the government, are feeling the brunt of the impact and are being cut out of the process. Others say the government isn’t saving money because they are reducing competition.
Gordon is now associate dean for government procurement law at George Washington University. He said when the Obama team took office they were committed to investing in the procurement staff and to curb out-of-control spending.
“We needed to strengthen the federal acquisition workforce. We needed to rein in spending. And we needed to be sure that when we did spend money, we were spending it wisely. Strategic sourcing was at the center of those efforts,” Gordon said.
Agencies were and continue to be reluctant to rely on the GSA to purchases goods, even simple items like printer paper and sticky notes, because the GSA has a reputation for not offering the best prices and not meeting agencies’ needs, Gordon said.
“We worked closely with GSA. And GSA demonstrated to the agencies concretely that they really were getting them good prices for office supplies,” he said.
The administration did not mandate that agencies buy office supplies through the GSA’s blanket purchase agreement. Instead they encouraged agencies to compare the GSA prices against how much it would cost to buy the same items on their own and agency after agency determined the GSA offered the better deal, Gordon said.
Relying on the GSA also frees up acquisition staff members to focus on buying other services and goods, he said. “We need to reduce that duplication to save the agencies time. So it’s not just better prices, it’s also saving them effort.”
Gordon believes the use of strategic sourcing will spread through other agencies and into other buying categories, like IT.
“You just can’t spend that much money on hardware, software and services without thinking and saying, ‘Folks we’ve got to find a way to buy smarter’.”