GAO: GSA reports fuzzy numbers on strategic sourcing savings

The General Services Administration may have some fuzzy dollar figures on savings for office supplies, but Government Accountability Office auditors found the main conclusion is correct: Strategic sourcing saves money.

GSA estimated that the government saved $16 million from June 2010 through August 2011 through its office supplies strategic sourcing initiative, known as Office Supplies II (OS II). Under this initiative, GSA entered into agreements with 15 vendors offering discounted prices to agencies.

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GSA issued a report to Congress in November 2010. In it, GSA reported that, on average, agencies paid 75 percent more than prices through its Multiple Award Schedules contracts and 86 percent more than OS II prices for their retail purchases.

However, GSA’s report acknowledged some limitations with the figures it was calculating and GAO called out a number of other problems. What GAO uncovered led it to question the percentage of some of GSA’s reported price premiums, according to a report released Dec. 21.

Premiums would have changed from GSA’s reported figures by less than 5 percentage points for 10 of the 14 reported categories of supplies, such as paper and toner. Looking at drawing and graphic arts supplies, GAO found price premium was 68 percent, as compared to the 278 percent GSA reported.

Officials from the Air Force, Army, Navy, and the Homeland Security Department also questioned GSA’s figures, based on their own studies. Still, the agencies agreed with GSA’s overall conclusion. They can get better prices through strategic sourcing. GAO agreed too.

“The magnitude of the price premium may be debatable, but other agencies that have conducted studies came to the same basic conclusion about the savings potential from leveraged buying,” GAO wrote in its report.

GAO also said it expects to see increased savings as more agencies choose to use OS II blanket purchase agreements.