Government doesn’t use bulk-purchasing initiative enough, auditors say

tanikewak/Shutterstock.com

The government’s seven-year-old strategic sourcing initiative designed to save money through bulk purchasing of office supplies and services is achieving nowhere near its potential, according to a Government Accountability Office report released Thursday.

Agencies “leveraged only a fraction of their buying power through strategic sourcing and achieved only limited savings,” auditors concluded after a yearlong review of procurement efforts under the General Services Administration’s Federal Strategic Sourcing Initiative and independent efforts at the Defense, Energy, Homeland Security and Veterans Affairs departments.

Those agencies’ contract spending made up about 80 percent of the government’s overall $537 billion procurement budget in fiscal 2011, and GAO analysts added reviews of strategic sourcing by the Air Force, Army, Navy and Defense Logistics Agency for greater detail.

Strategic sourcing, a popular tool the private and public sectors use to buy office supplies and services, telecommunications and print management aids and other items, was institutionalized by the Office of Management and Budget in 2005 and is overseen by GSA and the Office of Federal Procurement Policy.

But as of 2011, GAO found, the major agencies were using it for only 5 percent, or $25.8 billion, in purchasing for a savings of only $1.8 billion, less than 0.5 percent. When a strategic sourcing contract was used, annual savings was along the lines of 5 percent to 20 percent, GAO found.

“Most selected agencies and the Federal Strategic Sourcing Initiative have not fully adopted a strategic sourcing approach,” auditors said, citing a lack of clear guidance and inadequate use of metrics. At the Pentagon, GAO said, limited resources are devoted to metrics, while Energy and Veterans Affairs are only starting to focus on them. Homeland Security has opened a central office to hold senior managers accountable to meet these goals and to achieve 20 percent of procurement spending through strategic sourcing in 2011.

GSA’s FSSI reported “considerable savings” of about $60 million, or 18 percent, from using the tool to manage $339 million in spending, GAO found. Yet “total spending through the program remains low, in part, because the FSSI contracts have low rates of use and the program has not yet targeted the products and services on which the government spends the most.”

The GAO report is addressed to Sen. Joe Lieberman, I-Conn., chairman of the Senate Homeland Security and Governmental Affairs Committee, and Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, and their ranking members.

Issa is preparing an acquisition reform bill that would mandate priority consideration for strategically sourced goods and services. “The federal government must do better when purchasing commonly used goods and services --especially information technology -- where inefficiency and waste is substantial,” he said in email. “As the GAO has underscored, leading private sector companies have successfully used strategic sourcing since the 1980s and saved billions of dollars. It is time the federal government catches up.”

Lieberman noted private sector savings from aggregating procurements. “Leveraging the buying power of the federal government is much too important a tool to be bypassed by federal agencies, particularly in this era of tight budgeting,” he said. “The Department of Homeland Security is a leader in this area. Other agencies should look to DHS as a model and fall into line.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.