The White House, eager to demonstrate that it’s serious about cutting federal spending, is adopting a tactic frequently used by penny-pinching shoppers: buying in bulk.
Starting this week, several federal agencies and departments will pool 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 their supplies.
In some cases, “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.”
Gordon said several agencies and military branches maintain hundreds of separate wireless phone contracts for different sets of employees. In one case, a smaller agency Gordon declined to identify discovered it had almost one printer per employee.
The renegotiation of wireless plans will come later, but under a deal struck late Friday, the departments of Commerce, Defense, Homeland Security and Treasury, as well as the Social Security Administration and other agencies, will start buying printers, copiers, and scanners from 11 firms, including Canon, Lexmark, Konica, Ricoh and smaller, veteran- or minority-owned suppliers.
Similar agreements signed last year for office supplies are helping 60 agencies and military offices save about $200 million over the next four years, said Jeffrey D. Zients, deputy director of the Office of Management and Budget.
The federal government spends more than $1.2 billion annually on wireless service plans, Zients said. Officials plan to unveil similar blanket purchase agreements for wireless providers later this year, with the hope of saving at least $170 million annually by reworking some deals.
Government contracting more than doubled during George W. Bush’s presidency, due in part to the wider use of multimillion-dollar, no-bid deals. Today, the federal government spends more than $500 billion annually on government contracts, according to OMB.
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.