Federal Procurement: Strategic Sourcing/Leveraged Buying/Multiple Award Schedules Required (Part 2)

In the first post in this series, we considered some of the higher level reasons government purchasing authorities should work to leverage some of the same general strategic sourcing and supply base consolidation techniques as the private sector, inclusive of complex services categories such as printing. Yet the mere existence of a centralized contract or buying framework does not imply that behaviors will change at the frontlines of department and agency purchasing decisions. But a recent Executive Gov article suggests indirectly that it's important to compel those that make buying decisions to justify the reasons for not leveraging a centralized contract rather than making individual procurement and contracting decisions the default.

For US Federal procurement practice, the good news is that there "has been movement on several fronts in Washington to further encourage strategic sourcing. In September, the OFPP directed agencies to develop business cases for establishing or renewing either a government-wide, multiagency or interagency contract." Forcing this activity works. As one stakeholder notes in the story, "You see the results in the office supplies strategic sourcing effort: agencies looked at GSA's offerings, and concluded that GSA was offering what they needed at low prices."

Yet adoption across certain categories is better than others (a trend we also see in private sector GPO models, where a certain subset of contracts tend to dominate the volume across the entirety of a particular organizations leveraged contracts). Specifically in the case of the Federal sector, "90 federal entities use GSA's domestic shipping and delivery services and 60 use GSA's office supplies plan" while "24 entities use GSA's print managing tool, 20 use its wireless devices plan and six use its expense management service for telecommunications."

Drilling down on the rationale for less adoption in certain areas, another source suggests that "Over the last 10 years, agencies received more sources and had more in-house capability to do things, so they got used to it...agency pride may explain the hesitancy." Here at Spend Matters, we suggest that the best antidote to pride would be a chargeback mechanism that reduces Federal budgets based on unrealized savings from sourcing outside of a centrally leveraged agreement.

- Jason Busch

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