In May of 2005, the Office of Management and Budget’s Office of Federal Procurement Policy (OFPP) released a memorandum to all Federal Chief Acquisition, Information and Financial Officers announcing the onset of a Strategic Sourcing initiative. The memo required all agencies identify no fewer than three commodities “that could be purchased more effectively and efficiently through the application of strategic sourcing…” by October 1st, 2005, develop strategic sourcing plans, goals and objectives and performance measures, develop a governance structure and develop communications and training strategies.
In response to this memo, the Department of Treasury and the General Services Administration launched the Federal Strategic Sourcing Initiative (FSSI) in November 2005. Chartered by the Chief Acquisition Officer’s (CAO) Council, the purpose of the Initiative is to test the ability to strategically source across federal agencies, establish mechanisms to increase savings, value, and socio-economic participation, share good practices and build the strategic sourcing community of practice, learn lessons applicable to future strategic sourcing efforts at federal or agency levels, and avoid unnecessary duplication of effort in responding to the OMB Strategic Sourcing Initiative.
Since inception, more than 30 federal agencies, both military and civilian have worked together to identify requirements and develop government wide solutions for Express and Ground Domestic Delivery Services (ExGDDS), Wireless Telecommunications Expense Management Services, and office supplies. In addition to providing streamlined contracts for lower prices, these common solutions also provide services to agencies for analyzing and improving demand management and business processes, provide spend data and access to commodity subject matter experts.
As you might imagine, across these three commodities, the estimated federal spend is in the hundreds of millions of dollars. And while we’ve had many agencies participating providing requirements and estimated spend, we’ve not been able to achieve nearly the savings we could be realizing. Why? For starters, while agencies work to develop common requirements and implement contract solutions, the agencies won’t commit spend upfront. Without this commitment, we aren’t able to leverage our spend and negotiate deals that provide significant savings (ultimately benefitting the taxpayer, aka you and me). Even agencies that have participated in defining requirements for the FSSI solutions have decided not to use the solutions and have put in place internal agency solutions, often using the FSSI requirements and prices for their own contracts.
So why would an agency spend the time to work on the government-wide solution and then not only not use the solution, but spend additional resources and money to put in place a duplicative solution? Quite frankly I don’t know. But I do know we are leaving millions if not billions of dollars on the table by not leveraging our spend and by duplicating contracts for common goods and services.
You can help – create awareness and encourage your agency to participate in the solutions that are in place or on the teams that are now forming to define requirements. Eleven of the thirteen FSSI Office Supplies BPAs were awarded to small businesses and small disadvantaged businesses providing agencies a great way to help meet socioeconomic business goals, get products that are environmentally friendly and compliant with the Trade Agreements Act, and get spend data. FSSI is also starting the requirements definition for the second generation office supplies contracts and agencies are encouraged to participate. New FSSI commodity teams have just formed for Wireless Plans and Devices and Printers/Copiers/Multi-function Devices. In addition, an RFQ for Energy Management Support Services in conjunction with the Office of the Federal Environmental Executive has recently been released.
We can do better working together. There needs to be real commitment on the part of the agencies. OMB needs to review enterprise and interagency contracting actions for duplication and redundancy and hold the agencies accountable. I think we could even make a real dent in the $40 billion savings target outlined in the July 29 OMB memo “Improving Government Acquisition”.