Group devising plan for bulk buys of IT hardware

Buying IT in bulk: How the Air Force got started

  • Get senior leadership involved. The Air Force got the chief of staff, the deputy assistant secretary for contracting, the CIO, the chief financial officer and other vice commanders involved early.

  • Form a small, full-time and permanent strategic sourcing group. The entity conducts market research, spend analyses and demand forecasting; develops acquisition strategies; builds consensus; and understands the technology, user needs and contracting rules.

  • Include vendors and other non-IT functions such as legal, financial, small business and acquisition. This helped the Air Force with consensus building and unique needs in certain areas.

  • Build on early successes. The service developed an incremental implementation plan and re-fines it when needed.

  • Communicate plans to internal customers and vendors.

  • Include small-business needs as a part of strategy.

  • Balance the need to execute and the need to document processes. The Air Force had to find a way to get large, complex procurements done, but comply with regulations.

  • Focus on total cost of ownership. The goal is not just lower prices, but configuration management, minimum security standards and consistent purchasing.

  • Incrementally implement governance, policy and procedures, and measure the performance of the program. Don't force the program down the offices' throats, but hope they see the benefits.

  • Manage each initiative as its own program. The Air Force established a commodity mission, strategic plan and schedule for each product it bought.

  • Source: Kenneth Heitkamp, Air Force

    Kenneth Heitkamp

    Agencies spend more than $43 billion annually on cell phones, copiers, office supplies, express delivery services and IT hardware. The Office of Federal Procurement Policy thinks that's too much.

    A working group led by officials from OFPP, the Treasury Department and the General Services Administration is trying to bring bulk commodity buying to civilian agencies.

    Similar to the enterprise software license program called SmartBuy, led by GSA, the OFPP-led group will look at how to buy these commodities'including servers, desktop PCs, printers and other peripherals'using the federal government's volume purchasing power.

    'We are trying to develop a community of people who are actively engaged in doing this and help GSA put the people together,' said an Office of Management and Budget official, who requested anonymity. 'We have asked the chief acquisition officer to take the lead, but we also asked them to take a multidisciplinary approach and bring in the CIO, the chief financial officer and the small business director.'

    The Air Force has already established a commodity council for buying technology, and the Army plans to set one up early next year.

    GSA has established a Strategic Sourcing Initiative Office headed up by Mary Davie, who also is the acting director of the Federal Acquisition Service's Office of Customer Accounts and Research. And GSA's John Schwartz, who worked on SmartBuy, is helping on the strategic sourcing initiative for IT hardware, said Tom Kireilis, SmartBuy's senior program manager.

    The Strategic Sourcing Initiative working group briefed the Chief Acquisition Officers Council late last month and will provide the council with a monthly report card, said Tom Sharpe, the Treasury Department's deputy chief acquisition officer and senior procurement executive.

    Sharpe, who will be the co-chairman of the working group along with Davie, said agencies with similar needs have formed subworking groups to determine the best way to proceed'whether it is coming up with a new contract or working through existing GSA contracts, or doing a better job of consolidating requirements.

    Best value

    'IT hardware is enormous,' Sharpe said. 'The team has to figure out where to focus and where they can get the best value from.'

    Sharpe said the working group will act as a governance body for the initiative and help the individual commodity groups on their strategies.

    'We hope to have some initial successes by April,' he said. 'The goal is to improve the process and increase small business participation.'

    David Drabkin, GSA's deputy chief acquisition officer, said agencies must change the way they buy to really get to the heart of strategic sourcing.

    'The government lacks the discrete-enough data to identify, by brand and product type, what we buy,' Drabkin said. 'We are leaving money on the table.'

    Drabkin said strategic sourcing should not be used for every product, just those that are bought in consistent quantities annually, such as computers or paper.

    The Air Force recognized this opportunity and set up an IT Commodity Council in January 2004. Over the last two years, ITCC has bought more than 204,000 desktop PCs, avoiding more than $53 million in costs, according to the service.

    The Air Force plans to expand the program to handheld services and devices, and digital printing and imaging.

    The key to its success has been building the confidence of so many Air Force components and vendors, and getting early wins, said Kenneth Heitkamp, associate director for the Air Force's Life-Cycle Management Office in the Office of Warfighting Integration and CIO.

    'It is not about contracting; it is about strategic sourcing with a purchasing, contracting and lifecycle management strategy,' Heitkamp said. 'It is not about price; it is about total cost of ownership.'

    The Air Force is working with OFPP and many other agencies to help them better understand how strategic sourcing works, he added.

    'We have stressed that volume purchasing to get a good purchase price is only part of the strategy,' Heitkamp said. 'There are quantities above which we should not expect lower prices. We must expect our strategic partners to make a reasonable profit. There is value in creating enterprise technical standards and business processes that go across federal agencies.'

    One of the benefits of bulk buying is that it allowed the Air Force to establish a standard PC configuration. Heitkamp said OMB is monitoring the service's progress and will 'wait until we have proven successes early next year before pushing this too hard.'

    Drabkin and others said gathering purchasing data is key to the Strategic Sourcing Initiative, so the subworking groups will go to a number of sources to figure out how many commodities agencies are buying. Kireilis said that was one of the toughest things for SmartBuy.


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