3.2: Strategic Sourcing
Promoting Strategic Sourcing Other Information:
Government purchases of commodities are typically fragmented across multiple departments, programs, and functions within agencies.
Agencies across the government often rely on hundreds of separate contracts for many common-use items, with prices that vary
widely. We are working with agencies to change this dynamic by pooling the Federal government’s buying power. Agencies are
reviewing their buying practices to better coordinate purchasing within their organizations and are negotiating more aggressively
for discounts and other benefits. For example, the Department of Homeland Security (DHS) expects to save more than $87 million
during the next six years by standardizing desktop operating systems, e-mail, and office automation, as well as negotiating
a department-wide agreement for the full suite of products. In addition, we are working across agencies to coordinate purchasing
and get better pricing by creating government-wide blanket purchase agreements (BPAs). GSA awarded the first set of these
earlier this month for office supplies. Each year the Federal government buys more than a billion dollars of office supplies.
GSA analyzed this spending and the dynamics in the office supply market to inform an aggressive strategic sourcing effort
that entailed securing up-front commitments from agencies, utilizing reverse auctions to drive prices lower, and extending
the BPAs to cover all Federal agencies. As a result of this effort, we will save approximately 20 percent on office supply
purchases – or about $200 million over the next four years.
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