Applying Best Practices to Strategic Sourcing
Federal agencies awarded more than $436 billion in contracts for goods and services during fiscal year 2007. In a series of reports since 2002 intended to improve the Department of Defense's (DOD) acquisition of services, GAO's work has shown that DOD and civilian agencies would benefit by making use of commercial best practices to take a more strategic approach to procurement, known as strategic sourcing. Because agency procurement processes are decentralized and uncoordinated, it is not apparent that the federal government is fully leveraging its enormous buying power to obtain the most advantageous terms and conditions. Strategic sourcing includes such practices as using spend analysis to obtain improved knowledge of contract spending and using dedicated cross-functional teams or commodity managers to take a strategic, enterprisewide approach to acquire key services and products. The Office of Management and Budget (OMB) reported in May 2007 that the Department of Defense had 42 active strategic sourcing activities totaling $4.3 billion and achieved $538 million in cost avoidance in fiscal year 2006 from these strategic sourcing initiatives. OMB also stated that the Department of Homeland Security (DHS) reported more than $99 million in price reductions and cost avoidances in fiscal year 2006 and awarded contracts totaling $75 million for strategically sourced goods and services to small businesses. However, OMB has also encouraged agencies to do more in this area of cost-saving opportunities.
^ Back to topKey Reports
- Contract Management: High-Level Attention Needed to Transform DOD Services Acquisition
- GAO-03-935, September 10, 2003
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 29 pages) Accessible Text Recommendations (HTML)
- Best Practices: Improved Knowledge of DOD Service Contracts Could Reveal Significant Savings
- GAO-03-661, June 9, 2003
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 49 pages) Accessible Text Recommendations (HTML)
- Best Practices: Taking a Strategic Approach Could Improve DOD's Acquisition of Services
- GAO-02-230, January 18, 2002
- Summary (HTML) Full Report (PDF, 32 pages) Recommendations (HTML)
