IT Services Targeted for Strategic Sourcing The Bush administration is moving to expand its strategic sourcing initiative to cover IT services, according to Paul Denett, administrator of federal procurement policy. In a memo to agency procurement officials, Denett said a working group in the Chief Acquisition Officers Council is exploring whether to establish standard labor category definitions for IT services. “This effort could improve how requirements are defined and improve the proposal evaluation process,” he wrote. Several agencies have created their own task order contracts for IT services, such as the Homeland Security Department’s Eagle. GSA’s schedule 70 and dozens of governmentwide acquisition contracts also offer those services. However, Denett said, “The Office of Management and Budget (OMB) continues to focus on strategic sourcing as a sound business principle that should be applied wherever possible.” He cited large cost savings in the first governmentwide strategic sourcing contracts. He said more than 50 agencies placed orders totaling nearly $50 million on governmentwide contracts for express and ground domestic delivery services last year, saving about 25% over GSA schedule prices. He forecast savings of 25% to 40% on the governmentwide contract for telecom expense management services. Small business advocates fear that the strategic sourcing initiative will hurt small firms, because it emphasizes reducing the number of suppliers. But Denett said agencies have been told not to pursue strategic sourcing if it hurts small vendors. He said small firms won 11 of 13 blanket purchase agreements for office supplies last year, and are offering discounts up to 30% off GSA schedule prices. In testimony before the House Small Business Committee last month, he said the Air Force awarded of all of its $40.7 million in medical services to small businesses, while the Defense Department awarded 41% of its strategic sourcing dollars to small vendors. In his March 11 memo, Denett directed agencies’ chief acquisition officers to report on their strategic sourcing activities in 2007 and to set goals for 2008. He urged them to submit suggestions for other commonly purchased products and services that could be included in future initiatives. GSA has established a program management office for strategic sourcing. Its website is www.gsa.gov/fssi.