Thoughts on “Strategic Acquisition”

Strategic acquisition offers government and industry an opportunity to work together to identify unnecessary costs in the acquisition process and pass those savings along to federal agencies. However, a new term has entered the dialogue regarding the Federal Strategic Sourcing Initiative (FSSI). That term is “supplier suppression.” What does “supplier suppression” mean in the context of FSSI?

At bottom, “supplier suppression” means constricting the supply chain and, ultimately, restricting competition through a limited set of generic, government-wide contract vehicles. GSA is currently repeating its past. Over 20 years ago, GSA had a limited set of FSS contracts that were mandatory for use across the federal government. The result was static pricing, restricted competition, limited access to best in class commercial companies, and high customer dissatisfaction. Customer agencies avoided using GSA.

“Supplier suppression” will have long term negative consequences for customer agencies and the American people. Limiting competition in the supply chain will inevitably lead to higher prices and lower quality for customer agencies and the American people.

In response to FSSI and the concept of supplier suppression, the Coalition has begun work on a white paper focusing on FSSI and its impact. The Coalition will host a Forum focusing on FSSI and its impact on customer agencies, contractors and the American people. The Coalition has also developed a set of “Strategic Acquisition Principles” that, if adopted, would deliver best value solutions for customer agencies while maintaining a vigorous, robust commercial supply chain. At the heart of these principles are sound requirements development and volume commitments as driving value for customers and sound business opportunities for contractors. Effective requirements development is the key.

Strategic Sourcing initiatives, appropriately structured, could be a win for all stakeholders. The current FSSI approach, however, creates significant detachment between customer agencies and contractors. It is a top down approach rather than a bottom up one.

The Coalition’s “Strategic Acquisition Principles” are built around the fundamental procurement principle that the closer the acquisition is to the requirements holder the more likely a best value outcome will result for all. The closer a procurement is to the actual requirements holder, the better opportunity for clear, consistent requirements with corresponding volume commitments. Clear, consistent requirements and volume commitments drive competition and savings. Here are the Coalition’s principles:

Strategic Acquisition Principles

1. Strategic acquisition offers government and industry an opportunity to work together to identify unnecessary costs in the acquisition process and pass those savings along to federal agencies. Commercial item contracting is a model that reduces the cost of acquisition. By eliminating government-unique requirements in favor of commercial practices, the costs involved in doing business with the Federal government are reduced and the taxpayer saves. In essence, put “commercial” back into commercial item contracting and save.
2. Savings calculations should cover the Total Acquisition Costs to the government including the administrative costs involved in planning, conducting acquisitions, data collection, and contract management. How the government calculates its strategic sourcing savings should also be transparent to the American public.
3. GSA Schedules are a strategic source. Agency specific BPAs with well-defined requirements and volume commitments lead to innovative solutions through robust competitions, at competitive prices, with improved efficiency. Generic government-wide BPAs add costs without commensurate value.
4. Continuous open seasons enhance competition and innovation while meeting the Multiple Award Schedule program’s statutory mandate that it remains open to all sources. Continuous open seasons facilitate an active supplier base; provide access to the latest commercial services, products, and solutions for GSA and its customer agencies; and encourage task order competition.

We look forward to your feedback on these principles. More importantly, we look forward to delivering our Strategic Sourcing White Paper and hosting our Strategic Sourcing Forum in June.

Roger Waldron

President