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Agencies lack incentives to save money through strategic sourcing, GAO says

Congress could promote strategic sourcing by setting goals in legislation  that would hold agencies accountable for their use of it, Cristina Chaplain of  the Government Accountability Office (GAO) said July 15, 2013.

Chaplain, director for acquisition and sourcing management at GAO, said at a hearing of the Senate Homeland Security and Governmental Affairs Committee that even  though strategic sourcing presents a clear chance to save money, procurement officials lack incentives to pursue it.

Those who achieve savings might see their budgets cut the next year, Chaplain  said.

“Failure actually pays off in government, doesn’t it?” Sen. Ron Johnson  (R-Wisc.) asked. “Exactly,” Chaplain replied, adding that some officials resist the loss of control over spending that results when the government leverages its  collective size.  Federal procurement is largely decentralized, and strategic sourcing aims to aggregate the government’s buying power.

Keep reading this article at: http://www.fiercegovernment.com/story/agencies-lack-incentives-save-money-through-strategic-sourcing-gao-says/2013-07-16

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Some senators skeptical about strategic sourcing

Can buying in bulk really save the money its advocates say? Some of those advocates spent a few hours on The Hill on July 15, 2013 trying to convince skeptical senators that it can.

Dan Tangherlini, administrator of the General Services Administration, and Joseph Jordan, administrator of the Office of Management and Budget’s Office of Federal Procurement Policy, testified that such strategic sourcing does indeed offer substantial savings for agencies, and needs to be expanded. Cristina Chaplain, the Government Accountability Office’s director of acquisition and sourcing management, also testified that expanding the practice could reap big federal savings.

Some senators however, questioned how effectively government could adapt long-term to the ideals of bulk buying and leveraging the best price from vendors. They said the ideals wouldn’t take hold without more focused implementation at federal agencies, including such simple things as gathering uniform savings data. “How can we measure savings?” Sen. Tom Coburn (R-Okla.) asked.

Keep reading this article at: http://fcw.com/Articles/2013/07/16/strategic-sourcing-skepticism.aspx?p=1 

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GAO: Government could save $50 billion through strategic sourcing

The Government Accountability Office released a report today detailing how the government is leaving at least $50 billion on the table annually by not taking advantage of strategic sourcing — “a process that moves an organization away from numerous individual procurements to a broader aggregate approach,” according to the report.

The federal government spends roughly $537 billion on federal procurement spending each year, yet just a small fraction of that is managed with strategic sourcing efforts. Four agencies — Defense, Homeland Security, Energy and Veterans Affairs — manage 80 percent of the overall procurement budget, but only 5 percent of their spending is managed with strategic sourcing, the report found.

“While strategic sourcing makes good sense and holds the potential to achieve significant savings, federal agencies have been slow to embrace it, even in a time of great fiscal pressure,” the report reads.

The basic idea behind the Federal Strategic Sourcing Initiative — launched in 2005 — is collaboration among the agencies: collaboration to bargain for the best price on contracts and collaboration to share best purchasing practices. But the initiative was only applied to a small amount of federal procurement spending in 2011, according to the report.

Keep reading this article at: http://fedscoop.com/gao-government-could-save-50-billion-through-strategic-sourcing/ 

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GSA claims $200 million in office supply savings

The General Services Administration says it saved $200 million on purchases  of common office supplies through its Office Supplies Second Generation program,  a June 21 GSA statement  says.

Through the Federal Strategic Sourcing Initiative, GSA has awarded fifteen  blanket purchase agreements for OS2, the statement says.

Thirteen of those BPAs were awarded to small businesses. Those small  businesses received $461 million in sales and took 76 percent of the OS2  business.

As part of the OS2 program GSA developed a dynamic market pricing model to  help the small businesses negotiate better pricing with their own suppliers in  order to pass those savings back to the government, GSA says.

The pricing model will result in more than $12 million in incremental direct  savings, the statement says.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-claims-200-million-office-supply-savings/2013-06-24

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DoD waging ‘continuing war’ on unproductive acquisition bureaucracy

DoD acquisition leaders are making the rounds in and outside Washington, explaining the latest iteration of their blueprint for improvement: Better Buying Power. As they do, they’re telling members of industry that they’re sensitive to their concerns about a growing oversight bureaucracy.

One of the tenets of Better Buying Power 2.0, the version leaders are rolling out right now, is a carryover from the original version: reducing nonproductive processes and bureaucracy in the acquisition process. Officials said many of those non-value-added processes are in the area of contract oversight.

“I share industry’s concerns about an excessive oversight culture,” said Ashton Carter, the deputy secretary of Defense. “I’ve long been concerned that the number of watchers in the department is approaching the number of doers. We may in fact be reaching that threshold, especially with respect to things like audits. We’re trying to work internally and work with industry to address these issues.”

Keep reading this article at:http://www.federalnewsradio.com/394/3338189/DoD-waging-continuing-war-on-unproductive-acquisition-bureaucracy

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