Sometimes “choice” in procurement is precisely what not to give to practitioners. This is especially the case as we consider the latest scandal to envelop NASA, who failed to implement a strategic sourcing and spend analysis program (see here and here) that provided even a modicum of leverage and visibility into spend within the agency. One “excuse” the agency provided was the numerous options for procurement that were available. The Inspector General’s Report into the matter offers the full story:
“We discussed this practice with Headquarters Procurement representatives and were told that because NASA’s Centers operate autonomously, procurements are handled differently across the organization. NASA Centers have multiple options to procure office supplies in addition to the Federal Strategic Sourcing Initiative solution, including local Center-utilized vendors and Center-wide support service contracts under which a contractor purchases office supplies and warehouses them for centralized distribution. Finally, Centers co-located with U.S. military facilities have the option to purchase office supplies through their facility’s military supply center.”
Too much choice in sourcing is not a good thing. But perhaps it’s at least a viable excuse for failing to achieve value for taxpayer dollars. However, avoiding the implementation of a spend analysis and savings tracking program is not. And this latter piece formed the center of the Inspector General’s findings into the matter:
“Poor development of an Agency-wide plan, coupled with the insufficient implementation of key aspects of that plan, has significantly impaired NASA’s Strategic Sourcing Program. While NASA developed a Program plan to satisfy OMB’s strategic sourcing requirements, the Agency failed to follow critical elements of its Program plan – specifically, completing spend analyses and measuring performance. Further, without regularly performing a comprehensive spend analysis, NASA is unable to review Agency spending patterns for commodities and identify potential candidates for strategic sourcing efforts.”
Furthermore, the report suggests the root cause issues:
“One of the first steps in NASA’s Strategic Sourcing Program required a spend analysis to identify potential candidates for strategic sourcing. However, we found that while NASA performed targeted or commodity specific spend analyses for a small number of commodities, it did not conduct analyses for the majority of commodities acquired by the Agency, including some that were ultimately sourced strategically. We also found that NASA’s Program plan does not identify a standard methodology for performing the required spend analysis. Specifically, the existing plan does not identify or quantify what acquisition data is to be used in completing the spend analysis, what systems are approved for use in obtaining the necessary data, who is responsible for performing the analysis, or how often the analysis should be performed.”
Of course we can think of well over a dozen solution partners that do spend analysis as a service who could have easily taken this on for NASA (BravoSolution, Iasta, Spend Radar/SciQuest, Emptoris/IBM, GEP, Insight Sourcing/Spend HQ, Ariba, A.T. Kearney, PRGX – the list goes on). And perhaps this will be the path NASA goes down in the future.
Next in this series, we’ll consider a case example where the agency failed to build visibility into spending activity.