Contracting's seismic shift?

Within the bureaucratic language of a recent OMB memo lies a provision that could dramatically alter federal procurement.

Jeffrey Zients

Acting OMB Director Jeffrey Zients released a memo to step up strategic sourcing efforts.

It largely went unnoticed, but the federal contracting world might have shifted on Dec. 5.

A memo from the Office of Management and Budget has given strategic sourcing a new visibility by changing a working group into a standing council that will lead a governmentwide initiative to encourage agencies to collaborate on procurements whenever possible.

OMB’s acting director, Jeffrey Zients, released the memo to push forward strategic sourcing efforts across the government. He wrote that the memo establishes a broad initiative that “agencies join together to negotiate the best deal for the taxpayer.”

The approach has been around for years but not adhered to on a broad scale. Now, though, experts say strategic sourcing has caught the attention of senior officials in the administration who work on a broader policy scale. It is significant that Zients issued the memo, rathe OFPP Administrator Joe Jordan.

Experts also say the memo reflects the Obama administration’s emphasis on strategic sourcing as a way to address the government’s ongoing budget pressures. OMB’s move is indicative of a desire for centralized approval of procurement strategies to get lower prices and save money.

“Is this true tectonics?” asked Michael Del Colle, an independent consultant. “I think it bears watching.” In the past, officials have confined the drive mainly to agencies’ acquisition offices. But now they are expanding its scope.

In the memo, Zients raised a working group in the Chief Acquisition Officers Council to be on par with that council and the other CXO councils. For the governmentwide initiative, the new Interagency Strategic Sourcing Leadership Council will team up with a broad number of councils, including the Chief Financial Officers Council, the CIO Council and the Performance Improvement Council.

Robert Burton, former deputy administrator of the Office of Federal Procurement Policy and now a partner at the Venable law firm, said there is no significant difference between the working group and the leadership council, except that Zients has made it more visible.

In 2005, OMB made a similar push for strategic sourcing. Officials were told to find several commodities that they could buy in bulk. However, there was no governmentwide council, and OMB put the CAOs largely in charge of leading the internal initiatives.

The new council includes officials from the major departments, the General Services Administration, NASA and the Small Business Administration.

Nevertheless, several sources predicted that the administration will have a tough time taking strategic sourcing governmentwide. As in the past, agency officials will bicker over which commodities are fit for strategic sourcing. Experts say the arguing might diminish the usefulness of the effort, especially when it comes to buying IT, because agencies have their own requirements.

“Agencies definitely push back because everyone feels like they’re a little bit different,” Burton said.

He noted that it has been hard to get agency buy-in over the years. Now, however, officials might be willing to take a closer look at the money-saving initiative. The budget situation has put bulk buying in a new light, Burton said, and agencies might be more willing to use strategic sourcing.

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