Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual Procurement Costs
GOVERNMENT ACCOUNTABILITY OFFICE WASHINGTON DC
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Why GAO Did This Study GAO has reported that the government is not fully leveraging its aggregate buying power, and that strategic sourcing, a process that moves a company away from numerous individual procurements to a broader aggregate approach, allowed companies to achieve savings of 10 to 20 percent. A similar savings rate applied to the federal procurement budget would equal more than 50 billion dollars. In 2005, the Office of Management and Budget directed agencies to use strategic sourcing and established the FSSI program to manage government-wide efforts. GAO was asked to assess 1 the extent to which selected agencies managed spending and achieved savings through strategic sourcing, 2 key challenges selected agency and FSSI officials face in strategically sourcing products and services, and 3 the extent to which the FSSI program managed spending and achieved savings through strategic sourcing. To do this, GAO selected four agencies that were among the highest in fiscal year 2011 procurement obligations DOD, DHS, VA, and Energy and reviewed government-wide efforts. For each, GAO analyzed strategic sourcing data and policies, and interviewed responsible officials. What GAO Recommends GAO recommends a number of actions OMB, DOD, and VA can take to achieve more savings, such as applying strategic sourcing practices to their highest spending procurement categories, and setting targets for use of strategic sourcing contracts. All three agencies concurred with our recommendations.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies