OMB requires strategic sourcing

OMB memo on strategic sourcing

Expect more bulk buying for federal acquisitions following a new Office of Management and Budget memo requiring agencies to use strategic sourcing for at least three commodities.

Under this new guidance, agency chief acquisition officers have until October 1 to identify three commodities ripe for acquisition on an agency-wide basis. The idea is to use an agency’s buying power to lower costs and increase performance, among other goals, according to the OMB memo. The three commodities cannot include software that could be purchased under SmartBuy, an existing program to buy enterprise-wide licenses. Already undertaken strategic sourcing initiatives do count, however.

The memo directs chief acquisition officers to work with chief information officers and chief financial officers to develop a strategic sourcing plan and establish an agency-wide strategic sourcing council.

In addition, starting in January of next year, acquisition officers will report to OMB’s Office of Federal Procurement Policy the cost reductions and agency improvements achieved thanks to strategic sourcing. Agencies will be required to develop a methodology for formulating baseline data.

The federal government spends about $300 billion each year on goods and services but could save money through a more collaborative and structured buying process, according to the memo.