Is Strategic Sourcing Money in the Bank for Agencies?

Did you know that one of the biggest procurement programs underway is happening at the National Oceanic and Atmospheric Administration (NOAA)?

“The Professional and Technical Support Services Contract Vehicle (also known as Pro-Tech) will be awarded next year for a five-year, $5 billion program. It will deliver a wide array of specialty services in the categories of ocean and coastal services, satellite/observing systems services, fisheries, meteorological services and enterprise operations,” reports Federal Times.

Overseeing the program is Mitchell Ross, the director of NOAA’s Acquisition and Grants Office. Ross told Chris Dorobek on the DorobekINSIDER program that Pro-Tech is optimizing strategic sourcing to make the contract more fiscally appealing.

Strategic sourcing is an institutional procurement process that continuously improves and re-evaluates the purchasing activities of a company. In a production environment, it is often considered one component of supply chain management.

Ross says NOAA is using strategic sourcing “in order to improve service delivery. We are trying to save money, and really do more with less. Strategic sourcing is all about taking advantage of commodities and services. It is about getting volume discounts and moving faster to aid our programs and make effective service delivery.”

Pro-Tech is the second big strategic sourcing initiative that NOAA has created. The first program — called NOAALink — was NOAA’s original attempt to standardize and rationalize information technology infrastructure. The program has been a huge success.

“We are going to apply the lessons learned from that first one to Pro-Tech, which is aimed at the professional and technical services that we buy and have been buying for years on behalf of NOAA, across the entire enterprise,” said Ross.

As a strategic sourcing initiative, Pro-Tech is aimed at making NOAA more effective and more efficient in the delivery of services.

“We’re a relatively small science agency,” said Ross. “We have a $5 billion budget a year, and three of that $5 billion goes out the door in contracts, grants, and transfers to other agencies. A big chunk of that is professional and technical services people that come every day to work in our 800+ facilities, so we think there’s an opportunity to become more efficient and more effective in procuring and delivering those services, and that’s what Pro-Tech is all about.”

Another benefit to the strategic sourcing initiative is the streamlined approach to contracting. “We have over 10,000 suppliers in our little agency — far too many,” said Ross. “We also have an average dollar value per transaction that’s less than $100,000 — far too low. So we’re doing a very large number of transactions on a piecemeal basis, and that is just not serving our needs. It’s not cost effective for us — it’s duplicative.”

Legislation in the 2010 Jobs Act allows NOAA to run a full and open competition, meaning that firms of any size will be able to submit a proposal. “Under this legislation we will be able to reserve awards for small business,” said Ross. “That is something that we have not had before. In the past, it’s been an either/or situation.”

Despite the success of NOAA’s first strategic sourcing initiative, Pro-Tech has suffered from some serious delays. “It’s always hard when you do change management,” said Ross. “We’ve done a lot of analysis, we’ve worked with our internal and external stakeholders, and we think we’re about through the acquisition planning stage now, and we are hopeful that we’ll be able to release the draft solicitation in the summertime, and then have a final solicitation towards the fall.”

Procurement in the federal government is broken right now, which is why Ross says we need to take chances on programs like strategic sourcing. “It’s all about people. If you think back in the federal procurement going back a decade or more, we had about 37,000 series 1101 contracting officers,” said Ross. “We had 37,000 of them a decade ago when we were buying roughly $200 billion a year in product and service. We were up to about 450 to 500 billion last fiscal year. We still have about 37,000 1102’s. We just don’t have the people in the numbers and the experience level that we used to.”

Ross has seen a lot of changes over his career as a federal employee – he started out in the first class of presidential management fellows in 1978. “I’ve enjoyed my time in and out of government, working on acquisition and federal procurement,” he said. “I think it’s a great field. I encourage people that are coming out of school to get into it. The public service ethic is actually quite strong in the young people coming out today. I just hope they’re not afraid to come into government, given some of the rhetoric that exists between the branches of government.”

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Deborah Sorgel

I understand the need to make the procurement processes faster and more efficient. However, I’ve had an up close and personal experience as a CDC contractor in Atlanta with the strategic source for Meetings and Conferences. I can tell you that no matter what the numbers say from the organizers end, CDC paid a substantial premium, which can be verified by looking at annual meeting costs before and after the BPA. The best way to get good prices is to foster task order competition AND without it you will pay a premium for the convenience!

subroto mukerji

This actually makes me very afraid. I am a small business owner and selling to the federal government is supposedly easy to do. I sell professional services and this says that I am going to get thrown out of the process altogether.

I provide DAS (distributed antenna systems) for amplifying cellular communications inside large buildings. As a small business NOAA simply would not be interested in me at all. I would have to beg for subcontracts with the larger companies in order to survive. Absolutely wonderful for the government but death to small companies with new technologies.