While continued ramblings over the Fiscal Cliff "deal" continue to dominate the talks in Washington, it appears that strategic sourcing is finally getting its due. We commend the Obama administration and specifically Deputy Director for Management Jeffrey Zients for outlining a new sourcing charter in a recent memorandum to departments and agencies. These recommendations include the establishment of a "new Strategic Sourcing Leadership Council" (SSLC) with sitting members from a range of different areas of government including the Departments of Defense (DOD), Energy, Health and Human Services, Homeland Security, Veterans Affairs, the General Services Administration, the National Aeronautics and Space Administration, and other agencies as designated by the Administrator.
The SSLC's initial charter is somewhat targeted, but includes items that will likely result in savings not only based on supplier leverage and unit cost reduction, but also overall supplier value delivered. These charter includes include (and we quote verbatim from the more telling ones):
- Identifying at least five products and/or services for which new government-wide acquisition vehicles or management approaches should be developed and made mandatory, to the maximum extent practicable ... for these identified commodities and solutions, provide a supporting spend analysis, estimate savings opportunities, and define metrics for tracking progress
- Identifying existing contract vehicles and relevant contract renewal dates that could be used to develop transition strategies to the new solutions
- Proposing vendor management or other strategies that could be used to reduce the variability in the prices paid for similar goods and services, where the development of new government-wide vehicles may not be immediately feasible
Of course unless the SSLC charter and recommendations have teeth, we have no doubt that federal procurement will revert to its wasteful habits of the past. But we have hope, especially considering some of the contributing elements to the SSLC strategy that Zients outlines in his memorandum. To be continued...