Expert: Strategic Sourcing May Shut Out Small Contractors Strategic sourcing programs will inevitably hurt some small businesses, according to former federal procurement policy chief Steven Kelman. Although “the official line inside the government” is that strategic sourcing plans will include protections for small vendors, Kelman said, “We’re deluding ourselves.” He said one of the basic goals of strategic sourcing is reducing the number of suppliers. Kelman, now a professor of government at Harvard, headed the Office of Federal Procurement Policy during the Clinton administration. He spoke Nov. 9 at the National Contract Management Association conference in Bethesda, MD. The Bush administration is pushing strategic sourcing of commodity products and services, such as mobile phone and package delivery. Officials have said the effort will soon be expanded to other services, possibly including IT services. The current procurement policy administrator, Paul Denett, pointed out that small businesses won 11 of 13 blanket purchase agreements for office supplies under a recent GSA strategic sourcing initiative. (SAA, 8/31) He said, “We’re going to work hard to make sure that [small firms] get equal or greater amounts than they had before we launched strategic sourcing.” But Kelman warned, “You still have a lot of mom-and-pop small businesses who have been selling to the government. They are going to be unhappy.” Kelman also questioned policies that limit contract bundling: “Even a 10-year-old knows he can get a better deal buying the giant economy size in the supermarket.” He said bundling restrictions are “not in the taxpayer’s interest.” But Raj Sharma, CEO of Censeo Consulting Group, said contracts that bundle several different types of services are not in the taxpayer’s interest, either, because they require a single contractor to be competent in dissimilar areas. “We’re losing quality” in such contracts,” he warned.