Government Wasting Money by not Purchasing in Bulk
Washington has a plan for buying supplies in bulk in order to save money. But it rarely follows through on this strategy that could shave billions off the federal budget.
The Government Accountability Office (GAO) recently reviewed the bulk-buying policies (or “strategic sourcing contracts”) of the General Services Administration, as well as the departments of Defense, Energy, Homeland Security and Veterans Affairs. These agencies account for 80% of the government’s billion-dollar procurement budget.
The GAO concluded that the agencies were only buying in bulk 5% of the time, which amounted to a savings of $1.8 billion. This savings represents only one-half of one percent of procurement spending. Federal procurement officers could be saving considerably more money if they utilized strategic sourcing contracts with greater frequency. Agencies “leveraged only a fraction of their buying power through strategic sourcing and achieved only limited savings,” the GAO wrote in its report.
The GAO did praise the Department of Homeland Security and the Defense Logistics Agency for making attempts to implement cost-saving bulk purchasing.
To Learn More:
Government Doesn’t Use Bulk-Purchasing Initiative Enough, Auditors Say (by Charles S. Clark, Government Executive)
Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual Procurement Costs (Government Accountability Office) (pdf)
U.S. Government Discovers Cost-Saving Strategy…Buying in Bulk (by Noel Brinkerhoff, AllGov)
Federal Government Finally Decides to Buy in Bulk (by Noel Brinkerhoff, AllGov)
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