Feds look to exploit buying power

A federal interagency working group is working to identify ways that agencies can leverage their collective buying power to get better prices from vendors, an Office of Management and Budget official said today at the IRMCO conference in Cambridge, Md.

Robert Burton, associate administrator of OMB's Office of Federal Procurement Policy, said a small group of agency executives will identify best practices in what he called strategic sourcing.

The group will then recommend policy and regulatory changes that will institutionalize those best practices, Burton said.

The interagency working group is led by officials at OFPP and the Homeland Security Department, Burton said.

"I'd like to see regulatory and policy changes that will leverage buying power within agencies and then governmentwide, which is not being done well," he said.

Burton said the working group might recommend other projects like SmartBuy, a governmentwide software licensing project begun earlier this year by OMB.

"There's no question a lot of folks are paying list price," Burton said. "We can get a lot more bang for our buck."

For example, Burton said one office supply vendor has reconfigured its computer systems so government employees buying supplies with government credit cards automatically get a discount at checkout.

"They want to keep the government's business," Burton said. "It's a start. All I had to do was ask."

Tom Kirellis, program manager of the SmartBuy initiative, said federal officials hope to meet with Oracle Corp. officials this month to iron out details of a SmartBuy agreement.

The two sides' major point of contention is software maintenance fees. Federal chief information officers want the fees included in the SmartBuy deal, Kirellis said, but officials of Redwood Shores, Calif., Oracle have balked at negotiating the fees as part of a governmentwide purchase of Oracle software.

"They fear they'll have to restate their earnings, and they've convinced their customers that this is how they do business," Kirellis said. "We're bringing agencies together to say we demand this. By leveraging their buying power, we can push back on Oracle."