In 2006, the Office of the Secretary of Defense added Strategic Sourcing to the Defense Procurement and Acquisition Policy‘s (DPAP) list of standing initiatives. According to DPAP, strategic sourcing is defined as:
. . . a proven best practice [representing] how the DoD will acquire goods and services moving forward. It is the collaborative and structured process of analyzing an organization’s spend and using the information to make business decisions about acquiring commodities and services more effectively and efficiently.”
Though the government continues to struggle with strategic sourcing as a practical matter, there are success stories that can help inform guidelines for a future, government-wide strategic sourcing policy.
Take Government eCommerce, for instance.
In 2004, the US Army established 20 blanket purchase agreements for office supplies on DOD EMALL, and subsequently issued a Service-wide policy that all office supplies were to be purchased online through these established contracts. By negotiating their own strategic contracts, the Army saved 15% on office supplies, while ensuring that all online purchases were compliant with Ability One, the Buy American Act, and other procurement regulations. In addition, the DOD EMALL provided Level 3 processing data on all of its office supply purchases.
Over the next two years, the Navy, Air Force, and Department of Homeland Security implemented similar strategic sourcing contracts for online office supply purchases.
The potential for strategic sourcing through online applications, like the DOD EMALL, is virtually limitless. If the DOD was able to save 15% on the cost of buying office supplies, consider the savings of implementing similar measures for all commodities throughout the Federal government . . .