Strategic Sourcing – Improved and Expanded Use Could Save Billions in Annual Procurement Costs

by Sabrina I. Pacifici on October 4, 2012

GAO Report: Strategic Sourcing – Improved and Expanded Use Could Save Billions in Annual Procurement Costs, GAO-12-919, Sep 20, 2012

  • “Selected agencies leveraged only a fraction of their buying power through strategic sourcing and achieved limited savings. In fiscal year 2011, the Departments of Defense (DOD), Homeland Security (DHS), Energy, and Veterans Affairs (VA) accounted for 80 percent of the $537 billion in federal procurement spending, but reported managing about 5 percent or $25.8 billion through strategic sourcing efforts. These agencies reported savings of $1.8 billion—less than one-half of one percent of procurement spending. While strategic sourcing may not be suitable for all procurement spending, leading companies strategically manage about 90 percent of their procurements and report annual savings of 10 percent or more. Further, most agencies’ efforts do not address their highest spending areas such as services, which may provide opportunities for additional savings.”
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