Can GSA's bulk-buying strategy really save the big dollars its supporters promise?
Can buying in bulk really save the money its advocates say? Some of those advocates spent a few hours on The Hill on July 15 trying to convince skeptical senators that it can.
Dan Tangherlini, administrator of the General Services Administration, and Joseph Jordan, administrator of the Office of Management and Budget's Office of Federal Procurement Policy, testified that such strategic sourcing does indeed offer substantial savings for agencies, and needs to be expanded. Cristina Chaplain, the Government Accountability Office's director of acquisition and sourcing management, also testified that expanding the practice could reap big federal savings.
Some senators however, questioned how effectively government could adapt long-term to the ideals of bulk buying and leveraging the best price from vendors. They said the ideals wouldn't take hold without more focused implementation at federal agencies, including such simple things as gathering uniform savings data. "How can we measure savings?" Sen. Tom Coburn (R-Okla.) asked.
Jordan responded that there is not a standard method for federal agencies to measure savings gleaned from strategic sourcing among agencies, but said a savings methodology in the government was taking hold. "I do think strategic saving will have a long-term effect and will transcend administrative change."
Chaplain said the full potential of the federal government's buying power may be tied in its ability to quickly adapt to the strategic sourcing mind set. "While strategic sourcing makes good sense and holds the potential to achieve significant savings, federal agencies have been slow to embrace it, even in a time of great fiscal pressure," she testified.
Coburn agreed that a standard method for agencies to actually gauge how much they're saving would go a long ways towards insuring the practices become a federal habit as agencies have solid data to work with.
Sen. Ron Johnson (R-Wis.), however, remained skeptical that strategic sourcing would change old ways. He said recent initiatives look like past spending-control initiatives that have come and gone without much effect on actual federal spending habits. Johnson said sequestration budget cuts may be the ultimate way to change federal spending.
The panel followed an announcement of a White House initiative on July 8 to build a better, smarter, faster government headed by OMB Director Sylvia Burwell. Committee Chairman Tom Carper (D-Del.) called strategic sourcing "central to that initiative."
Tangherlini has been an evangelist for strategic sourcing since taking the helm at GSA. He testified he has met personally with all federal agency heads to discuss analyses of each agency's buying schedules and how they can be improved or bolstered through GSA's strategic sourcing capabilities. He contended that new bulk-buying initiatives like the wireless buying program are helping his agency build a track record that proves it saves money for other agencies. That reputation, he said, can help build into agencies' other procurement areas.
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