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$1 billion savings with strategic sourcing is 'achievable target'
Friday - 10/21/2011, 5:15pm EDT
Federal News Radio
Three senators are proposing major reforms to the federal government's acquisition process. Under their proposed bill, agencies would be required to use Federal Strategic Sourcing vehicles whenever possible.
The goal is to save $1 billion over four years — an achievable goal, said Anne Reed, CEO of ASI Government.
"Strategic sourcing is not new to the government. In fact, this is something the Obama administration and [OFPP Administrator] Dan Gordon have been pushing pretty strongly," Reed said in an interview with In Depth with Francis Rose.
Reed said the focus of the bill — sponsored by Sens. Scott Brown (R-Mass.), Susan Collins (R-Maine) and Joe Lieberman (I-Conn.) — is largely on consolidated purchasing, Reed said. But there are other areas of strategic sourcing that are "untapped" and could provide even greater savings, she said.
Strategic sourcing is essentially "leveraging the government's buying power more effectively," said Rob Burton, partner at Venable law firm.
More agencies are migrating towards multi-agency contracts after they see the savings, Burton said.
However, generally, agencies still like to "do their own thing," he said. Agencies will use agencywide contracting vehicles but "shy away from governmentwide because they have to pay a fee to other agencies and they don't like to lose control," Burton said.
Bundled contracts could hurt smaller businesses who cannot compete for contracts this large, Burton said.
The bill addresses this potential pitfall, but remedies it by directing the Office of Management and Budget to figure out how to protect small businesses.
"Easier said than done," Burton said.
Ultimately, Burton predicted the proposed legislation will pass because it has bipartisan support and does promise savings.