June 30th, 2010
06:35 PM ET
13 years ago

Federal gov't makes buy-in-bulk push

Washington (CNN) - The Federal government is the world's largest purchaser but taxpayers don't get the most value for their buck as Uncle Sam isn't saving the way Aunt Thelma does with her regular trips to Costco-by buying in bulk.

The government's top purchaser is trying to change exactly that.

Federal agencies usually rely on hundreds of separate contracts for commonly used office supplies that vary in price, White House Budget Director Peter R. Orszag's said in a blog post Wednesday. Purchasing supplies through separate contracts does not leverage the government's buying power across all agencies, providing the cheapest prices, said Orszag.

While the federal government is the world's largest purchaser, its spending is traditionally fragmented across many agencies, Orszag added.

The government spends billions of dollars on office supplies each year, according to Dan Gordon, the Administrator for Federal Procurement Policy in testimony Wednesday before the Senate Subcommittee on Contracting Oversight.

Gordon said the government intends to save money by making purchases through blanket purchase agreements (BPA's). The U.S. General Services Administration (GSA) awarded the first set of BPA's for office supplies earlier this month.

GSA has written commitments that BPA's will lead to lower prices. The Office of Management and Budget and GSA worked with buying agencies to secure commitments that hundreds of millions of dollars would be used more efficiently.

"Of course, the office supplies BPA's provide only a small glimpse into the vast benefits that strategic sourcing offers and we need to share these experiences so that we can replicate success," said Gordon.

Rounds of "reverse auctions" were conducted by GSA in order to drive down prices. Vendors participating in these auctions, were presented the lowest overall price received and had a short amount of time to come up with a lower price, said Gordon.

Gordon said BPA's will cut procurement costs on office supplies by about $200 million over the next four years. Every federal employee who purchases supplies from the winning contractors is guaranteed to buy supplies at the price negotiated by GSA.

"We are working with agencies to change these inefficient practices. Effective strategic sourcing begins with good acquisition planning," said Gordon.

Orszag echoed Gordon's sentiment. "After all, we owe it to the American people to spend their taxpayer dollars wisely and carefully," the OMB director said in his blog post.

soundoff (6 Responses)
  1. Keith in Austin

    Good move trying to save 200 million over 4 years in government paperclips. The problem is that Comrade Barry has spent 756 billion on a stimulous bill alone that cost a net loss of 3 million jobs!

    This lame move to imitate fiscal conservatism is like a small pimple on an elephant's rear end!

    June 30, 2010 09:27 pm at 9:27 pm |
  2. vwrtb

    no! We want 600 dollar toilet seats and 200 dollar screws like Reagan was able to buy...

    June 30, 2010 09:48 pm at 9:48 pm |
  3. Dawn

    I sure hope our federal govt is at least purchasing goods made in the USA even though republicans would rather buy from overseas and support their lobbyists and the corporations sending jobs overseas.

    June 30, 2010 09:49 pm at 9:49 pm |
  4. thor

    Maybe they also could cut coupons out of their local liberal newspapers.I'm sure that would help.However,that might cut into their time of surfing the web just a bit.

    June 30, 2010 10:37 pm at 10:37 pm |
  5. LouAz

    BPAs have been around for years. This inefficiency started with the Civil War ! Congress and the executive, particularily the DOD, have been part and parcel of it since then. I'm shocked . . . shocked ! . . . that someone would try to screw up all the sweetheart deals that the US Govt has "awarded" all these years.

    June 30, 2010 11:08 pm at 11:08 pm |
  6. Pkm

    Did they ever try shoping at staples da

    July 1, 2010 07:02 am at 7:02 am |