Strategic Sourcing with Small Business in Mind

Report Number: NPS-AM-11-C8P23R01-076

Series: Acquisition Management

Category: Small Business

Report Series: Proceedings Paper

Authors: Lora Gross

Title: Strategic Sourcing with Small Business in Mind

Published: 2011-04-01

Sponsored By: Acquisition Research Program

Status: Published--Unlimited Distribution

Research Type: Other Research Faculty

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Keywords: OMB, Strategic Sourcing, Small Business Advocates, Bundled Requirements, Competition


In 2005, the Office of Management and Budget (OMB) issued a memorandum to federal agencies to identify three routinely purchased commodities that could be more effectively and efficiently acquired through the use of an acquisition approach called Strategic Sourcing. The memorandum requires agencies to implement Strategic Sourcing efforts to save the government money and improve performance on the more than $500 billion spent through contracting each year.
In an effort to save millions of dollars of agency funds, concern has been raised by small business advocates that Strategic Sourcing efforts may narrow their opportunities and create bundled requirements which they are not able to meet. Strategic Sourcing concepts generally require national coverage for product or service provisions that may fall beyond a small businesses capability. Additionally, the Obama administration has called for a reduction of contracts awarded non-competitively; however, single award requirements are still within federal acquisition guidelines. If these requirements are procured under a single award effort, Strategic Sourcing can limit competition at the task and delivery order levels without incentivizing vendors to further reduce prices.