Most agencies meet first ‘strategic sourcing’ deadline

All but a handful of agencies met an Oct. 1 deadline for submitting plans on how they'll analyze purchases of three major commodities to negotiate better deals, an Office of Management and Budget official said Wednesday.

Only three or four agencies missed the cutoff date for sending the lists of commodities that they will review as part of their "strategic sourcing" efforts, said Robert Burton, acting administrator of OMB's Office of Federal Procurement Policy. He could not say which agencies were late, but said he expected to receive their information soon.

When all the plans are in, OFPP will look for patterns across agencies, Burton said. If certain commodities crop up on multiple agencies' strategic sourcing lists, then OMB might initiate a governmentwide effort to cut better deals on those items, he said. Burton spoke at a conference hosted by the Contract Services Association, an Arlington, Va.-based industry group.

In May, administration officials asked agencies to conduct formal reviews of their spending patterns. By January 2006, chief acquisition officers must report on the savings generated after the analyses are used to change spending habits and leverage agencies' buying power.

The strategic sourcing initiative has a greater potential payoff than some of OMB's other acquisition-related efforts, Burton said. By engaging in the effort, federal procurement professionals will develop stronger skills in negotiation, he added.

Burton said officials tend to think of the GSA schedule-a catalog of pre-negotiated agreements available for use across government-as displaying the "rock-bottom lowest price" available, when in fact those deals can sometimes be topped.

Strategic sourcing is one of OFPP's top priorities, Burton said. The office also has been busy ensuring that procurement rules are flexible enough to accommodate emergency purchases, such as those required in the aftermath of Hurricane Katrina, and that agencies are equipped to oversee the billions of dollars that will be dedicated to Gulf Coast reconstruction.

OMB asked Congress to raise the threshold for emergency micro-purchases, which are typically made using government-issued credit cards, to $250,000 from $15,000 at the request of the Defense Department, Burton said. But, as in the aftermath of the Sept. 11 terrorist attacks, OFPP officials have decided that the emergency contracting authorities already granted in federal regulations, including the $15,000 limit, are adequate to meet reconstruction needs.

In retrospect, the temporary hike in the micro-purchase limit--enacted by Congress as part of the second supplemental hurricane aid package--might have been unnecessary after the first couple weeks of relief work, Burton said. OMB last week announced a return to the $15,000 threshold and lawmakers are pushing legislation to enact the change.

OFPP also is concerned that the Federal Emergency Management Agency's procurement office is not adequately staffed to handle the Katrina-related surge in contracting activity, Burton said. OMB has asked agencies to help by detailing contracting officials to FEMA.

Other priorities listed by Burton, who stepped in as acting procurement chief following the recent arrest of David Safavian, included: greater oversight of interagency contracts, which made the Government Accountability Office's list of high-risk management practices, improvements in contract data, enhanced training for the acquisition workforce and the dismantling of legislative barriers to the administration's effort to open thousands of federal jobs to competition from contractors.