Jeff Zients, Office of Management and Budget‘s acting director, said last Friday during the quarterly President’s Management Advisory Board meeting that the administration’s strategic sourcing strategy may become mandatory, according to Federal News Radio.
Ruben Gomez reports that the strategic sourcing initiative was implemented in order to convert the immense size of the federal government into buying power for devices, print management, and IT hardware services.
Zients added that the mandatory application of the project may increase performance.
Gail McGovern, board member and president and CEO of the Red Cross, added that the proposal would yield stronger results for the program.
The board members also suggested procedures on how to improve data gathering and utilization for the decision making process. Suggestions included drafting requests for information regarding data perquisites and solicitations.
On the other hand, critics of the initiative are arguing that the program would negatively impact vendors and the economy.
Rick Vogel, a federal government sales manager for Coast to Coast Computer Products, was interviewed earlier this year saying that the initiative limits the number of potential contractors for every contract which hampers economic competition.
This can be very detrimental to the industry especially for marginalized and small businesses.
Without enough business to go around, businesses are forced to close down and many jobs will be lost, he added.
GSA never introduced an alternative to FSSI (Federal Strategic Sourcing Initiative). This procurement theory actually denies 17,000 companies from selling to the federal government., hence leaving only 10 or 15 companies per schedule selling items to Uncle Sam. Via Economics 101 past experiences, a handful of companies vs 10,000s of vendors wiil create one of these 2 scenarios :
a) price fixing, oligopolies & monopolies.
b) The government will strong arm these companies to offer such low prices forcing these vendors to leak non-trade compliant items. GSA need to make a decision – do they want low prices or trade compliant items.
I would like to present a 21st Century Competitive Solution vs FSSI
I strongly believe GSA should modify existing software to control buyers rather than eliminating competition via the FSSI procurement program. If buyer breaks protocol hence buyer would be disciplined. This software project can be done without additional funding. GSA, DoD & NASA can prioritize this software project via existing employed Software Engineers. It takes the will and priority to make this happen.
From what I can see there are some really big holes in the procurement process.
1) Via this GAO report http://www.gao.gov/products/GAO-12-705T most purchases were made outside of GSA procurement web site http://www.gsaadvantage.gov. A solution to this problem would be take away the buyers PHYSICAL credit card and store the credit card information online via http://www.gsaadvantage.gov This also protects the credit card # and information from possibly being compromised. Again this software project can be done with no additional funding. Amazon.com is a perfect example. I know the government is not a company but I am certain GSA has great software engineers to accomplish this task via a top priority and no additional funding software project. For open market purchases buyer currently utilize fbo.gov and/or other existing procurement sites. The same projects can be accomplished via these sites.
2) An independent software company should be allowed to screen scrape information from gsaadvantage.gov to prove selected FSSI Vendors “DO NOT” offer the lowest prices/ best quality.
3) Via Vendor uploads develop back end software to monitor and reject outrageously priced items. Example a $25,000 toilet seat or $5,000 hammer. Statistical databases exist via the free market to determine low / high prices per item hence halting outrageously priced item(s) uploaded to gsaadvantage.gov. GSA software engineers would need to create software to utilize this database.
4) I believe various government buyers have different volume purchase requirements. FSSI is not a one size fits all solution. Example many government buyers have less than a $3,000 requirement. Internet purchasing may be more advantageous for this type of purchase. Example open competition via gsaadvantage.gov
5) GSA claims its employees are overworked and can no longer handle additional and/or existing vendors. All existing employee manual operations should be analyzed via GSA’s Software Engineers to automate current manual human labor. It may be possible to handle unlimited vendors and buyers once this project is completed. Each new additional GSA Human assignment should be analyzed by software engineers for possible automation.
6) I strongly believe an independent software company should be allowed to give alternative 21st Century solutions versus FSSI.
7) Reduce the number of schedule solicitations. Currently GSA claims it costs $3,000 per year, per contract to maintain each contract and numerous GSA employees. There are 40 solicitations (GSA and VA). The solicitations should be consolidated down to a handful—with a goal of a single solicitation (contractors could then choose to consolidate their contracts or maintain separate contracts depending on their business models). The current structure of the schedules often forces companies to submit multiple offers for multiple contracts when a single contract would be more efficient. Consolidating solicitations allows companies to efficiently and effectively consolidate contracts rather than having multiple contracts across schedules and business lines. This approach would provide the opportunity for contractors and GSA to reduce costs associated with seeking, obtaining and managing multiple schedule contracts. It is an opportunity to leverage contractor and GSA resources through a more efficient structure. Consolidating schedules would lead to a more efficient and effective platform for market research by customer agencies. Also all human manual work should be analyzed via GSA software engineers for automation and efficiency.
8) I am certain GSA will claim it does not have available software engineers to complete this non-funded task. GSA can simply lay-off several employees in various departments in order to fund this task. This assignment should not take more than several million dollars. Hiring competent small business software companies would be the logical choice.
9) It is this writer’s belief FSSI is nothing similar to Corporate volume purchasing.
Example lets take Walmart. They currently have 66,000 vendors and counting each day. FSSI eliminates virtually all competition with possible oligopoly price fixing. Keep in mind all vendor prices are available via gsaadvantage.gov Giving very few companies exclusive selling rights via a long term contract and eliminating competition is not the answer. Why have 1,000s of existing GSA software programs go to waste monitoring a few vendors. GSA needs to enhance existing software to truly and easily maintain a vigorous open competitive market via existing web sites (gsaadvantage.gov and other existing procurement sites). Programmatically controlling the buyer via software is the 21st solution.