In the first installment of this series, we framed the backdrop of a scathing audit report of NASA’s failure to implement a strategic sourcing program. As we continue to explore what happened at NASA procurement, it is important to step back in time to 2005, when the Office of Management and Budget (OMB) issued a memorandum requiring the establishment of a strategic sourcing program spanning NASA and other agencies and departments. As part of this strategic sourcing requirement, NASA and other agencies and departments would have to conduct regular spend analyses to gain an understanding of their overall spend, trending, and leverage/aggregation opportunities.
Yet in the audit report, NASA’s Office of Inspector General found that “the Agency never conducted a comprehensive, Agency-wide spend analysis to identify additional commodities that could benefit from a more strategic procurement approach. Further, though NASA performed limited spend analyses on individual commodities, the Agency did not establish requirements regarding how such analyses should be developed, analyzed, and used.”
Even more scary, not only is NASA flying blind when it comes to understanding historic spend and aggregating volume, it also has no structured means of reporting and tracking implemented savings. Specifically, “while NASA officials informed us that they have realized savings with regard to specific strategic sourcing initiatives, the Agency does not track Agency-wide strategic sourcing efforts to maximize potential cost savings. As a result, NASA was unable to determine the extent of any efficiency or cost savings achieved through its Strategic Sourcing Program.”
Of course strategic sourcing is not rocket science. But we can do a postmortem on what happened. And learn from it. Later in this series on the Inspector General’s Report, we’ll consider what went wrong.