Strategic Sourcing a Win-Win for Small Business and Taxpayers

Since I joined GSA earlier this year, I’ve been keenly focused on getting to our core mission of delivering the best value to the American people and demonstrating our value to agencies. Strategic sourcing is one of the most effective initiatives available to fully leverage the government’s buying power and save taxpayer dollars. As Administrator Tangherlini explained in his Congressional testimony today, our Strategic Sourcing program continues to deliver big value to our customer agencies, small business partners and to the American taxpayer.

Thomas Sharpe, Commissioner, GSA Federal Acquisition Service

GSA has committed to help develop and launch 10 new strategic sourcing solutions by the end of Fiscal Year 2014. The Federal Strategic Sourcing Initiative (FSSI) is an innovative approach that cuts down on bureaucracy and helps agencies  pool their purchases to collectively achieve greater savings. This approach uses data-driven purchasing that leverages the scale of the government.

So, when it comes to FSSI — what’s the intention, and what’s the reality to date? The answer for both is promising and positive.

Although benefits to government agencies have been frequently articulated, industry is also a winner with strategic sourcing. Streamlining the acquisition process brings greater opportunities for many types of businesses.  With GSA’s strategic sourcing initiative for office supplies (OS2), for example, 76% of the vendors are small businesses. Those small businesses have seen sales of more than $460 million since 2010, when this initiative kicked-off.  Strategic Sourcing relies on principles that aim to meet socioeconomic and sustainability goals; in doing so, both the government and industry comes out ahead.

Government benefits of strategic sourcing include:

o Reduced pricing and lifecycle costs

o Improved alignment to agencies’ needs

o Faster identification and access to emerging technologies

o Increased savings and better understanding of spending patterns

FSSI now includes more than 20 agencies, both military and civilian, that have collaborated to develop government-wide common procurement vehicles that offer greater discounts, provide improved management, support small business participation, and represent best practices. Sales from Strategic Sourcing contracts and Blanket Purchase Agreements have translated into hundreds of millions of dollars for government agencies. The Department of Treasury has already built on the successful Express and Parcel Delivery Program (DDS2) and now saves $1.14 million annually simply by moving from air to ground shipping. Print Management is another solution that has helped agencies to generate large savings.  USDA has used Print Management  to save 15% on spending through this solution, as has the National Transportation Board to save 13% and the Alaska National Guard to save 36%.

Overall, strategic sourcing savings have totaled more than $300 million since 2010.  As more agencies use these solutions and as more solutions become available we will be able to generate even more savings. The success stories that we are telling now are just the beginning.

Related posts:

  1. GSA to Launch 10 Strategic Sourcing Initiatives
  2. GSA Helps Agencies Save $10 Million on Office Supplies
  3. Setting the Record Straight on Small Business Contracts