At a time when every agency in the federal government is coping with reduced budgets, the mission of GSA is more important than ever before. We have a responsibility to provide our partner agencies with the savings and resources they need to fulfill their missions. However, as the needs and resources available to these agencies change, we must adjust to the realities of this new federal marketplace.
In this new environment, GSA must find new ways to provide better, faster and more efficient services to our military and civilian customers and ultimately, the American people. To that end, we are preparing to make important changes to our business model which will transform the way we provide supplies and services to the government.
GSA is already moving forward with the implementation of a new vision for the Federal Acquisition Service (FAS), which includes a new business model for our supply business. We are shifting to a model that uses the capabilities of our vendors to directly support GSA’s customers, simplify federal acquisition, and over the next five years save taxpayers a half billion dollars.
In recent years, we have operated a wholesale supply business that relied on warehouse distribution centers serving US customers as well as customers in Europe, Africa, the Middle East and around the Pacific Rim. Along with the distribution centers, GSA also manages several retail stores around the world that stocked inventory from those warehouses. This model is costly, cumbersome and no longer the most efficient or effective approach to supporting our federal partners.
Changing this system will mean an overhaul of our wholesale and retail supply chain business models. As we adjust to this new system, GSA will continue to accept customer orders, but instead of routing them to our own distribution centers for fulfillment, we’ll have our commercial partners ship directly to customers and retail stores. We will transition out of the warehouse business and GSA will no longer buy, store and ship those retail items. Instead we will partner with vendors that have expertise in office supplies, tools and other common-use items to provide direct delivery of inventory to our customers.
As we transform our supply system, we will rely heavily on the Federal Strategic Sourcing Initiative, otherwise known as FSSI, a government wide effort to leverage federal spending and maximize savings. That concept of focused federal spending to leverage volume discounts will be duplicated for a variety of different products. As those programs roll out, they will become part of the long-term solution for how GSA delivers the most efficient and effective services to the federal government.
This is the right time to implement these changes to GSA’s supply program and they are one part of a new vision we are outlining for FAS over the next year. By working closely with our vendors, we have an opportunity to support our federal partners with the value and services they need, through a system that is suited to today’s marketplace.