The White House, eager to demonstrate it’s serious about curtailing federal spending, is adopting a tactic frequently used by penny-pinching shoppers: It’s planning to buy in bulk.
Starting this week, several federal agencies and departments will start pooling their purchases of office printers, copiers and scanners in hopes of collectively saving $600 million in the next four years, administration officials said late Friday.
The move, known as “strategic sourcing” in government contracting circles, is also forcing agencies to take a serious inventory of some popular office supplies.
“One of the things we’ve discovered is that agencies don’t have a clue what they have,” said Dan Gordon, the Obama administration's top federal contracting official. “They don’t realize how many cellphones and BlackBerrys they have.”
Worse, some agencies and military branches have hundreds of separate wireless phone contracts for different sets of employees, and in one case, a smaller agency Gordon declined to identify discovered it had almost one printer for every employee.
Under the deal struck late Friday, the departments of Commerce, Defense, Homeland Security, Justice, Treasury and the Social Security Administration are among those set to start buying printers, copiers and scanners from 11 firms, including Canon, Lexmark, Konica, Ricoh and several smaller, veteran- or minority-owned suppliers.
A similar agreement signed last year for office supplies is helping 60 agencies and military offices save about $200 million over the next four years, according to OMB Deputy Director Jeffrey Zients.
Next, the government plans to rein in spending on wireless service contracts that cost taxpayers more than $1.2 billion annually. Zients suggested that renegotiated deals, or a department’s merging of several plans, could yield at least $170 million in annual savings.
Collectively, the government’s myriad agencies, bureaus, departments and offices spend more than $500 billion on government contracting annually, according to the Office of Management and Budget. Government contracting more than doubled during George W. Bush’s presidency, in part because of the wider use of multimillion-dollar no-bid deals.
Early in his tenure, President Obama sought to reverse the trend by ordering agencies to cut at least $40 billion as part of a spending overhaul. Several agencies have since severed multibillion-dollar deals riddled with cost overruns and lax oversight. Overall, OMB said government contracting costs dropped $15 billion between fiscal 2009 and 2010, the first year-to-year reductions since 1997.
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