OMB: Bulk-buying can save money

OMB memo on strategic sourcing

Agencies have named five commodities that can be bought in bulk through strategic sourcing to save taxpayers money, and now the Office of Management and Budget wants the results, an OMB official said March 28.

The strategic sourcing will focus on copiers, office products, information technology hardware, delivery services such as FedEx or UPS, and cell phones, said Robert Burton, acting administrator of OMB's Office of Federal Procurement Policy, at Input’s MarketView 2006 conference in Falls Church, Va.

“Strategic sourcing has more potential for taxpayer savings than any other initiative,” he said.

The federal government spends about $300 billion yearly on goods and services, but could save money through a more collaborative and structured buying process, according to a May 2005 memo from OMB.

Agencies will be required to develop a methodology for formulating baseline data.

Agencies identified the goods and established an interagency group that is developing a governmentwide strategic sourcing plan for purchasing the five products.

Burton said OFPP won’t forsake small businesses. Small-business owners and advocates have raised concerns about the push to buying in bulk. Burton said the policy must complement small businesses’ concerns and the need to save money.

The agencies’ annual strategic sourcing reports were due to OFPP Jan. 31. The reports for this year focus on the governance structures in place to ensure that strategic sourcing is institutionalized and routinely practiced.

OFPP is requesting a paradigm shift within agencies as they install the new governance structure, Burton said. And OFPP expects results. “Now we want to see savings,” he said.

“The government doesn’t do strategic sourcing that well,” he said, and later asked, “Why can’t we do what the commercial world does?”