Strategic Sourcing Threatens Small Contractors Strategic sourcing initiatives by the Air Force and Army could eliminate thousands of contracts now being handled by small businesses. The Air Force plans to consolidate procurement for all its domestic bases in five regional centers, replacing 70 existing contracting shops. The Army is moving to create large, nationwide IDIQ contracts for environmental services, taking over work now being performed by hundreds of small firms. (See story.) The Air Force’s regional centers will assume responsibility for operational contracting, which covers all commodities and services used by the bases, from pencils and paper to IT, according to Patrick Rhode, chief of the Air Force’s Procurement Transformation Division at the Pentagon. He said the procurements amount to $15 billion a year. The centers will employ strategic sourcing to leverage buying power and get lower prices, Rhode said in an interview. The Air Force projects annual savings of up to $1 billion when the reorganization is completed in 2012. Asked about the impact on small local contractors near the bases, Rhode said the regional centers will be better able to analyze spending patterns and find new opportunities for small firms: “Even though [the contract] goes to the regional center, that doesn’t mean the services or commodities won’t be [purchased] with those local people.” In Frequently Asked Questions about the initiative, the Air Force said, “Our experience with strategic sourcing to date reveals that we are often able to target segments of our spending to small business that were previously being awarded to large businesses simply because we did not have the strategic planning in place.” The first regional center, attached to Lackland Air Force Base in San Antonio, is scheduled to open in January. Later next year four others will stand up at or near Langley Air Force Base in Virginia, Robins in Georgia, Scott in Illinois and Peterson in Colorado. Several hundred acquisition personnel will be transferred to the new offices. The centers will report to the Air Force Materiel Command at Wright-Patterson Air Force Base, OH. Rhode says the Air Force has not decided whether to issue blanket purchase agreements or create other IDIQ contracts. He said that will be determined on a case-by-case basis after acquisition planning.