Insourcing: It's still more with less

Existing tools could make acquisition more efficient

The federal workforce will have to do more with less in the next several years, notwithstanding the Obama administration's emphasis on insourcing and hiring more acquisition professionals. Insourcing will shift the focus of current resources to moving work in-house, and it will take several years for the new acquisition workforce to become productive.

Procedures and tools already available to acquisition officers could speed the acquisition process and make it more cost efficient. I'm referring to multiagency contract vehicles, price-comparison Web portals and purchasing cards.

A recent Federal Computer Week article [“A handbook on acquisition reforms,” Sept. 21] mentioned that roughly 80 percent of the work involved in contracting is avoided when using multiagency vehicles. However, such contracts need to be effectively managed to avoid duplicative efforts by competing agencies.

In a perfect world, there would be a single contract vehicle from which everyone in the government would order needed supplies and services. However, we are living in a far from perfect world, and getting disparate people and organizations to agree on a single solution is daunting. Agencies will resist giving up their contracts as they justify resources and, in some cases, revenue.

But rather than agencies fighting over who gets what, why not let the buyers decide? Why can’t the Office of Management and Budget require the development of a purchasing portal that would search all agency contracts and present options for making the best value decision? The technology is not new. In fact, most of us already use price comparison sites such as BizRate, PriceGrabber, Orbitz and mySimon in our personal lives.

So we are halfway there. After agencies have the capability to select from the best sources, they should achieve greater efficiencies and lower prices. But then again, why don’t we rethink how the ordering on those multiagency contracts is accomplished?

Back in the mid-1990s, the government eliminated roughly half of the contract actions going into purchasing offices by issuing purchase cards for acquisitions worth less than $2,500. Administrative savings were $54 to $92 for each card purchase. The same data showed that another 48 percent of the government's contract actions were valued less than $25,000, and many of those were orders issued against existing contracts.

Why not increase spending authority for those purchases to some point between $2,500 and $25,000? Federal regulations encourage the use of the purchase cards to place orders and pay for purchases against contracts. The use of a price-comparison portal by numerous, decentralized cardholders to place orders would allow the overworked acquisition workforce to turn its attention to more complex and critical functions that are not being accomplished, thus achieving key missions at multiple agencies by improving effectiveness and efficiency.

The administration's plans come as OMB is asking agencies to submit alternative budget targets that would freeze spending at the fiscal 2010 request level and reduce spending by 5 percent in fiscal 2011. Therefore, the only way the government can continue to provide quality services is to become more productive. And the only way for agencies to become more productive is by redefining what they do and how they do it and by giving agencies the tools they will need to get there.

It’s time to use available commercial technologies and business practices and bring federal acquisition into the 21st century.

Editor's note: The views expressed herein are the author's alone.

About the Author

Bruce E. Sullivan is vice president and head of government services at Visa, and a former director of the Defense Department’s Purchase Card Joint Program Management Office. The views expressed by Bruce Sullivan are his own and not necessarily those of Visa.

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Reader comments

Mon, Nov 2, 2009 Peter G. Tuttle, CPCM

Generally speaking, the idea of increasing the threshold for P-Card purchasing has merit, considering that the vast majority of procurement transactions occur below the simplified acquisition threshold. Empower non-warranted personnel outside of agency contracting offices to conduct such transactions, thus freeing warranted contracting officials to conduct acquisitions that are of more strategic value to their agencies and to the Nation. Perhaps we would see less contracting horror stories in GAO Reports or on the front page of the Washington Post if contracting officials could focus on "real" business value activities instead of on processing thousands of small dollar transactions. Naturally, however, there would have to be an increase of training, audit and oversight to correspond to the increase of P-Card spending activity by non-contracting personnel. Interesting concept. Maybe it's time to look at it seriously.

Fri, Oct 30, 2009 Matthew Potter HSV, AL

Sir, your recommendation to increase the amount that can be purchased via IMPACT card or locally approved sounds very sensible and practical. Unfortunately there will be enough abuse or mismanagement of this that after a certain amount of time more controls and oversight will be put back in place. There is enough evidence of this not just with Government credit card use but in the private sector as well to see that onoce againa slower, more deliberate process will be established.

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