Monday, May 28th, 2012 - 17:10
The federal government purchases more than $500 billion
of goods and services each year, buying everything from
pens and paper to engineering services and fighter jets.
Most experts agree that the government purchasing process is cumbersome and inefficient; hundreds of purchasing offices work independently with little or no coordination. The term “purchasing” is used throughout to refer to what is more commonly referred to as “acquisition” within the federal government.
Without greater transparency into all transactions or supplier relationships, purchasing staff by necessity focus on tactics to reduce price and manage individual transactions, as opposed to strategically managing cost and supply chains. The result of the present system is redundancy of a high order and billions of taxpayer dollars wasted every year.
The good news is that within the Washington beltway, some have recognized this opportunity and have been pushing reforms into agency purchasing practices for years. However, these initiatives have only incrementally moved the needle toward a more efficient and effective system. Why? The primary reasons previous reform efforts have delivered marginal results are:
- Besides the goal of reducing waste, there is no clear vision for what is required or expected of the purchasing system (or acquisition system as it is more commonly referred to). The lack of an end-state vision has resulted in a patchwork of reforms with no clear end goal or outcomes, sowing confusion and frustration on the part of those who can help drive the change.
- There is a narrow focus on basic commodities and an even narrower focus on negotiating better deals, as opposed to managing and reducing total costs across supply chains. It should be noted that some of this has started to change, especially with the broader information technology (IT) reform agenda laid out recently by the Office of Management and Budget.
- Necessary changes to organizations, processes, and policies are not made, thereby allowing inefficiencies to creep back into the system.
Read the entire article.