Strategic Sourcing: Savings or Bust

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This topic contains 1 reply, has 1 voice, and was last updated by  Bob Carnie 7 years, 5 months ago.

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  • #169075

    Jaime Gracia
    Participant

    Jeff Zients, acting director of The Office of Management and Budget (OMB), gave signals of an expansion and the mandatory use of the Administration’s strategic sourcing initiative as reported by Federal News Radio.

    …”Given that we’ve got some areas that are just so obvious we should be doing this together, and we have a history of not doing it that way, I think the risk-reward is very much tilted in the direction of [mandates instead of voluntary initiatives],” he said. “I think without it, we’re just going to be chasing this opportunity rather than getting ahead of it or catching up to it.”…

    Many in industry, especially small businesses, are crying foul at the notion of watching even more sales on their Schedule 75 fall even further to the BPA, which only has a handful of companies compared to the amount of active sales on the Schedule 75. Further, many agencies have grown relationships with vendors, combined with “unique” requirements, that make mandatory usage challenging.

    Driving the push towards mandatory usage is that according to GSA, agencies spend about $1.4 billion on office supplies every year, but only $257 million in sales from strategic sourcing initiative in 2011.

    Questions:

    1) Have you used the BPA, and if so, have you seen savings?

    2) Would mandatory usage cause problems in your organization?

    3) If you are a vendor, has the BPA caused you challenges?

  • #169077

    Bob Carnie
    Participant

    Yes the BPA has caused unfair challenges and eliminates true competition

    If an organization is mandated to buy from 15 companies versus 100’s or 1,000’s the game is rigged against you.

    Economics 101

    GSA never introduced an alternative to FSSI (Federal Strategic Sourcing Initiative). This procurement theory actually denies competitive companies from selling to the federal government., hence leaving only 10 or 15 companies per schedule selling items to Uncle Sam. Via Economics 101 past experiences, a handful of companies vs 10,000s of vendors only creates in time price fixing, oligopolies & monopolies.

    I would like to present a 21st Century Competitive Solution vs FSSI

    I strongly believe GSA should modify existing software to control buyers rather than eliminating competition via the FSSI procurement program. If buyer breaks protocol hence buyer would be disciplined. This software project can be done without additional funding. GSA, DoD & NASA can prioritize this software project via existing employed Software Engineers. It takes the will and priority to make this happen.

    From what I can see there are some really big holes in the procurement process.

    1) Via this GAO report http://www.gao.gov/products/GAO-12-705T most purchases were made outside of GSA procurement web site http://www.gsaadvantage.gov. A solution to this problem would be take away the buyers PHYSICAL credit card and store the credit card information online via http://www.gsaadvantage.gov This also protects the credit card # and information from possibly being compromised. Again this software project can be done with no additional funding. Amazon.com is a perfect example. I know the government is not a company but I am certain GSA has software engineers to accomplish this task via a top priority and no additional funding software project else if not – hire competent software companies to accomplish this unfunded task. Funds can be obtained by laying off various GSA employees. For open market purchases buyer currently utilize fbo.gov and/or other existing procurement sites. The same unfunded projects can be accomplished via these sites.

    2) An independent software company should be allowed to screen scrape information from gsaadvantage.gov to prove selected FSSI Vendors “DO NOT” offer the lowest prices/ best quality.

    3) Via Vendor uploads develop back end software to monitor and reject outrageously priced items. Example a $25,000 toilet seat or $5,000 hammer. Statistical databases exist via the free market to determine low / high prices per item hence halting outrageously priced item(s) uploaded to gsaadvantage.gov. GSA software engineers would need to create software to utilize this database.

    4) I believe various government buyers have different volume purchase requirements. FSSI is not a one size fits all solution. Example many government buyers have less than a $3,000 requirement. Internet purchasing may be more advantageous for this type of purchase. Example open competition via gsaadvantage.gov

    5) GSA claims its employees are overworked and can no longer handle additional and/or existing vendors. All existing employee manual operations should be analyzed via GSA’s Software Engineers to automate current manual human labor. It may be possible to handle unlimited vendors and buyers once this project is completed. Each new additional GSA Human assignment should be analyzed by software engineers for possible automation.

    6) I strongly believe an independent software company should be allowed to give alternative 21st Century solutions versus FSSI.

    7) There will be very little motivation for these very few FSSI vendors to vigorously compete via price / best quality. All prices are available via gsaadvantage.gov and each vendor will easily identify competitors.

    8) Reduce the number of schedule solicitations. Currently GSA claims it costs $3,000 per year, per contract to maintain each contract and numerous GSA employees. There are 40 solicitations (GSA and VA). The solicitations should be consolidated down to a handful—with a goal of a single solicitation (contractors could then choose to consolidate their contracts or maintain separate contracts depending on their business models). The current structure of the schedules often forces companies to submit multiple offers for multiple contracts when a single contract would be more efficient. Consolidating solicitations allows companies to efficiently and effectively consolidate contracts rather than having multiple contracts across schedules and business lines. This approach would provide the opportunity for contractors and GSA to reduce costs associated with seeking, obtaining and managing multiple schedule contracts. It is an opportunity to leverage contractor and GSA resources through a more efficient structure. Consolidating schedules would lead to a more efficient and effective platform for market research by customer agencies. Also all human manual work should be analyzed via GSA software engineers for automation and efficiency.

    9) I am certain GSA will claim it does not have available software engineers to complete this non-funded task. Also, I have heard from the grapevine GSA’s software team and its software system is a disastrous mess. GSA can simply lay-off several employees in various departments in order to fund this task. This assignment should not take more than several million dollars. Hiring competent small business software companies would be the logical choice.

    10) It is this writer’s belief FSSI is nothing similar to Corporate volume purchasing.
    Example lets take Walmart. They currently have 66,000 vendors and counting each day. FSSI eliminates virtually all competition with possible oligopoly price fixing. Keep in mind all vendor prices are available via gsaadvantage.gov Giving very few companies exclusive selling rights via a long term contract and eliminating competition is not the answer. Why have 1,000s of existing GSA software programs go to waste monitoring a few vendors. GSA needs to enhance existing software to truly and easily maintain a vigorous open competitive market via existing web sites (gsaadvantage.gov and other existing procurement sites). Programmatically controlling the buyer via software is the 21st solution.

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