Friday October 31, 2008
What is it?
The strategic sourcing process analyzes what an organization buys, how it buys, and from whom it buys. Strategic sourcing analyzes an organization's spending and uses this information to make business decisions about acquiring products and services more effectively and efficiently.
Private industry has long understood the importance of buying power and using best practices to achieve lasting improvements. In 2005, the President's Office of Management and Budget required all federal agencies to identify at least three commodities to which they could apply strategic sourcing processes.
What has the Army done?
The Installation Management Command (IMCOM) spends more than $4 billion per year to acquire all the goods and services required to operate more than 100 Army installations around the world. These dollars and the Army's tremendous scope of effort represent a significant "throw weight" IMCOM can use to leverage its own buying power within the industry. There have always been many localized successes at individual posts; however there is now a process to improve procurement across many installations with similar services and needs.
Under the realignments of BRAC 2005, installations receiving major troop influxes became subject to a number of environmental requirements with very short deadlines. A strategic sourcing pilot project centralized the procurement of 15 similar projects at five installations as a means of saving money and time. The U.S. Army Environmental Command (USAEC) was able to procure for less than $2 million what was estimated by the individual installations to be more than $3 million in projects, thereby realizing a 42 percent savings. The pilot successfully delivered quality products with speed crucial for BRAC 2005 milestones.
What continued efforts does the Army have planned for the future?
USAEC is using strategic sourcing to acquire four environmental services commonly procured by installations: environmental compliance, cultural resources management, natural resources management, and overall environmental management services. These contracts, valued at about $400 million, will be awarded through a full and open competition in fiscal 2009. USAEC anticipates 15-20 percent savings though the use of these competitive mechanisms.
Why is it important to the Army?
Strategic sourcing increases the value of each dollar spent so the Army can accomplish more work on its installations with equal or better quality. By implementing strategic sourcing, IMCOM will complement grass-roots efforts at its installations with Army-wide solutions that transform business processes in the best interests of Soldiers, their families and the long-term mission.
INFORMATION YOU CAN USE
- 2008 Strategic Communication Guide - Read the 2008 Army Strategic Communication Guide for key messages and updates
- Information Papers with " 2008 Army Posture Statement"
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