FEDERAL 

PROCUREMENT

Smarter Buying 

Initiatives Can 

Achieve Additional 

Savings, but Improved 

Oversight and 

Accountability Needed

Report to Congressional Requesters

October 2016

GAO-17-164

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-164, a report to 

congressional requesters

October 2016

FEDERAL PROCUREMENT

Smarter Buying Initiatives Can Achieve 

Additional Savings, but Improved Oversight 

and Accountability Needed

What GAO Found

From fiscal year 2011 through 2015, federal agencies reported spending almost 

$2 billion through the Federal Strategic Sourcing Initiatives (FSSI) GAO reviewed

and reported an estimated total of $470 million in savings. Federal agencies’ low 

use of the FSSIs, however, diminished the potential savings that could have 

been achieved. For example, in fiscal year 2015, federal agencies spent an 

estimated $6.9 billion on the types of goods and services available through these

FSSIs. Of this amount, $4.5 billion was considered “addressable” and could have 

been spent through the FSSIs, but just $462 million was. While total savings 

reported for fiscal year 2015 came in at $129 million—a savings rate of 28 

percent—had all of the agencies directed their addressable spending through 

FSSIs, up to $1.3 billion in savings could have been achieved, assuming the 

same savings rate. See figure. 

Actual and Potential Spending and Savings through Federal Strategic Sourcing Initiatives

Fiscal Year 2015

GAO found that FSSI use has been low, in part, because Leadership Council 

agencies, a cohort of large federal agencies responsible for FSSI governance, 

directed only 10 percent of their collective spending to the FSSIs. FSSI guidance 

requires agencies to develop plans to transition from existing agency vehicles to 

FSSIs, but Office of Federal Procurement Policy (OFFP) staff and General 

Services Administration (GSA) officials stated such plans were not collected or 

used to monitor FSSI use. Ensuring agencies submit these plans and monitoring 

them is consistent with internal control standards to evaluate and hold agencies 

accountable for performance.

OFPP’s category management initiative largely incorporates key lessons learned 

from the FSSIs into guidance, such as addressing small business concerns and 

obtaining data on prices paid. OFPP, however, has not yet ensured that agencyspecific targets and performance measures for adoption of FSSI and category 

management solutions are set. Until OFPP takes action to do so, it is at risk of 

agencies underutilizing existing FSSI and category management solutions and, 

in turn, of diminished cost savings.

View GAO-17-164. For more information, 

contact Timothy J. DiNapoli at (202) 512-4841 

or DiNapoliT@gao.gov.

Why GAO Did This Study

Each year, federal agencies obligate

over $400 billion on goods and 

services, but they miss out on savings 

when they do not leverage their 

collective buying power. In 2005, the 

Office of Management and Budget 

(OMB) directed agencies to leverage 

spending through strategic sourcing. In 

2014, OFPP, an office in OMB,

announced its category management 

initiative, which is intended to further 

streamline and manage entire 

categories of spending across the 

government more like a single 

enterprise.

GAO was asked to examine the 

current status of the FSSI program and 

the extent to which OFPP has 

incorporated lessons learned from the 

program into its category management 

initiative. This report addresses (1) 

savings and other benefits the FSSI 

program has achieved, and (2) lessons 

identified and incorporated into OFPP’s 

category management initiative. GAO 

analyzed FSSI spending, savings, and 

adoption data for all seven active 

FSSIs for fiscal years 2011 through 

2015; reviewed OMB, OFPP, 

Leadership Council, and GSA strategic 

sourcing and category management 

guidance; and interviewed GSA and 

FSSI program officials and OFPP staff.

What GAO Recommends

To increase potential savings, GAO is 

making 6 recommendations, including

that OFPP ensure agencies submit 

transition plans, monitor their use, and 

ensure agency specific targets and 

performance metrics to measure

adoption of FSSI and category 

management solutions are set.OMB and 

GSA concurred with the 

recommendations.
Page i GAO-17-164 Federal Strategic Sourcing Initiatives

Letter 1

Background 5

FSSIs Achieved Savings and Other Benefits, but Low Federal 

Agency Use of FSSIs Diminished Opportunities for Significant 

Savings 17

OFPP’s Category Management Initiative Incorporates FSSI 

Lessons Learned but Faces Implementation Challenges 28

Conclusions 38

Recommendations for Executive Action 39

Agency Comments and Our Evaluation 40

Appendix I Summary of Federal Strategic Sourcing Initiatives Included in 

Our Review 43

Appendix II Objectives, Scope, and Methodology 44

Appendix III Leading Companies’ Foundational Approaches for Strategic 

Sourcing 48

Appendix IV Key Provisions from the Office of Management and Budget 2012 

Strategic Sourcing Memorandum 49

Appendix V Comments from the General Services Administration 50

Appendix VI Comments from the Library of Congress 51

Appendix VII GAO Contact and Staff Acknowledgments 52

Contents
Page ii GAO-17-164 Federal Strategic Sourcing Initiatives

Tables

Table 1: Category Management Governance and Key 

Responsibilities 13

Table 2: Federal Strategic Sourcing Initiative (FSSI) Reported 

Spending and Savings for Fiscal Years 2011- 2015 (in 

millions) 19

Table 3: Federal Strategic Sourcing Initiative (FSSI) Spending and 

Adoption for Fiscal Year 2015 (in millions) 20

Table 4: Example of FSSI Tiered Pricing Model 27

Table 5: Key provisions of OMB’s Category Management Policy 

for Workstations 30

Table 6: Summary of Federal Strategic Sourcing Initiatives (FSSI) 

Included in Our Review 43

Table 7: Leading Companies’ Foundational Approaches for 

Strategic Sourcing 48

Table 8: Key Provisions from the Office of Management and 

Budget 2012 Strategic Sourcing Memorandum 49

Figures

Figure 1: Key Decision Point Process for Development and 

Approval of Federal Strategic Sourcing Initiatives 8

Figure 2: Common Categories Identified under Category 

Management, Fiscal Year 2014 Spending (dollars in 

billions) 12

Figure 3: Fiscal Year 2015 Actual and Potential Spending and 

Savings through the Federal Strategic Sourcing Initiatives 21
Page iii GAO-17-164 Federal Strategic Sourcing Initiatives

Abbreviations

CAP Cross-Agency Priority 

DOD Department of Defense 

FSSI Federal Strategic Sourcing Initiative 

GSA General Services Administration 

IT information technology 

NASA National Aeronautics and Space Administration 

OFPP Office of Federal Procurement Policy 

OMB Office of Management and Budget 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-17-164 Federal Strategic Sourcing Initiatives

441 G St. N.W.

Washington, DC 20548

October 26, 2016

The Honorable Thomas R. Carper

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Claire McCaskill

Ranking Member

Permanent Subcommittee on Investigations

Committee on Homeland Security and Governmental Affairs

United States Senate

Federal agencies obligate over $400 billion annually on goods and 

services. For over a decade we have issued reports on how the private 

sector has used strategic sourcing—which moves away from numerous 

individual procurements of goods and services to a broader aggregate 

approach—to reduce costs and improve quality.1 In 2005, the Office of 

Management and Budget (OMB) tasked the Office of Federal 

Procurement Policy (OFPP) to identify commodities (goods and services) 

to be purchased more effectively and efficiently through strategic 

sourcing.2 In response, the General Services Administration (GSA) and 

Department of the Treasury established the Federal Strategic Sourcing 

Initiative (FSSI) program to address government-wide opportunities to 

strategically source commonly purchased goods and services and 

eliminate duplication of efforts across agencies. OFPP is ultimately 

responsible for providing oversight and guidance as well as ensuring the 

overall effectiveness of the program.

 1GAO, Best Practices: Taking a Strategic Approach Could Improve DOD’s Acquisition of 

Services, GAO-02-230 (Washington, D.C.: Jan. 18, 2002); Best Practices: Improved 

Knowledge of DOD Service Contracts Could Reveal Significant Savings, GAO-03-661 

(Washington, D.C.: June 6, 2003); Best Practices: Using Spend Analysis to Help Agencies 

Take a More Strategic Approach to Procurement, GAO-04-870 (Washington, D.C.: Sept. 

16, 2004); and Strategic Sourcing: Leading Commercial Practices Can Help Federal 

Agencies Increase Savings When Acquiring Services, GAO-13-417 (Washington, D.C.: 

Apr. 15, 2013). 

2OMB, Memorandum for Chief Acquisition Officers, Chief Financial Officers, and Chief 

Information Officers, Subject: Implementing Strategic Sourcing (Washington, D.C.: May 

20, 2005).

Letter
Page 2 GAO-17-164 Federal Strategic Sourcing Initiatives

In 2012, we found that the FSSI program managed little spending through 

its initiatives, but reported considerable savings.3 Specifically, we found 

that through the end of fiscal year 2011, the FSSI program managed 

$339 million through four government-wide initiatives and reported 

achieving $60 million in savings. We reported, however, that the program 

faced key challenges in obtaining agency commitments to use new FSSIs 

and in increasing the level of agency spending directed through FSSI 

vehicles.

In December 2014, OFPP issued a memorandum that directed agencies 

to take specific actions to implement category management—an 

approach based on industry leading practices—to further streamline and 

manage entire categories of spending across government more like a 

single enterprise.4 This approach includes strategic sourcing, but also 

includes a broader set of strategies, such as developing common 

standards in practices and contracts, and improving data analysis and 

information sharing to better leverage the government’s buying power and 

reduce unnecessary contract duplication and yield other benefits. Under 

the category management initiative, federal procurement spending is 

organized into 10 common categories such as information technology 

(IT), travel, and construction, which, according to OFPP, altogether 

accounted for $275 billion in fiscal year 2014 federal spending. Each 

category is led by a team of senior government executives who is to 

develop a government-wide strategic plan for smarter buying with clear 

metrics and outcomes. Category management is also a Cross-Agency 

Priority (CAP) goal.5

 3GAO, Strategic Sourcing: Improved and Expanded Use Could Save Billions in Annual 

Procurement Costs, GAO-12-919 (Washington, D.C.: Sept. 20, 2012).

4OMB, OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives: Transforming the Marketplace: Simplifying Federal Procurement to Improve 

Performance, Drive Innovation, and Increase Savings (Washington D.C.: Dec. 4, 2014).

5The GPRA Modernization Act of 2010, Pub. L. No. 111-352 (2011) requires OMB to 

coordinate with agencies to develop federal government priority goals—known as crossagency priority or CAP goals—which are 4-year outcome-oriented goals covering a 

number of crosscutting mission areas, as well as goals to improve management across 

the federal government. OMB established goal periods for fiscal years 2012-2014, and 

fiscal years 2014-2018. OMB identified an interim CAP goal for strategic sourcing in 

February 2012. In the fourth quarter of fiscal year 2015, OMB changed the CAP goal from 

strategic sourcing to category management.
Page 3 GAO-17-164 Federal Strategic Sourcing Initiatives

Given the potential savings that could be achieved with category 

management, you asked us to examine the FSSI program and lessons 

learned. This report addresses (1) the extent to which savings and other 

benefits have been achieved by the FSSI program, and (2) lessons, if 

any, from OFPP and GSA implementation of the FSSI program and the 

extent to which those lessons have been incorporated into OFPP’s 

category management initiative.

We focused our review on seven FSSIs that were active between fiscal 

years 2011 and 2015: (1) Office Supplies; (2) Domestic Delivery Services; 

(3) Print Management; (4) Wireless; (5) Maintenance, Repair, and 

Operations Supplies; (6) Janitorial and Sanitation Supplies; and (7) 

Information Retrieval. This timeframe covers the period since we last 

assessed FSSI implementation through the last full year for which data 

was available. GSA is the executive agent for all the FSSIs except 

Information Retrieval which is administered by the Library of Congress. 

We excluded the Telecommunications Expense Management FSSI which 

ceased operations at the end of fiscal year 2014 because limited data on 

the program were available. FSSIs establish multiple award blanket 

purchase agreements, basic ordering agreements, and/or indefinite 

delivery, indefinite quantity contracts, through which federal agencies may 

obtain the specific goods and services they need. Most FSSIs, such as 

Office Supplies, are established with GSA federal supply schedule 

vendors. Appendix I further describes the FSSIs we reviewed.

To determine the extent to which savings and other benefits have been 

achieved through the seven FSSIs, we collected, reviewed, and assessed 

the reliability of agency reported data on spending, saving, and adoption. 

For the GSA FSSIs which report spending based on vendor reported 

transactional data, we obtained documentary and testimonial evidence on 

the internal controls used by vendors, the FSSI teams, and the FSSI 

Program Management Office to ensure the accuracy of the spending 

data. For three of the six GSA FSSIs, we also collected and reviewed a 

non-generalizable sample of transactional data reports. For Information 

Retrieval, we reviewed quarterly spending reports and interviewed 

relevant officials about the process used to collect and review data. We 

determined that the spending data for the GSA FSSIs were sufficiently 

reliable for our purposes but that the spending data for Information 

Retrieval lacked internal controls, were inconsistent, and contained 

errors. As a result, the Information Retrieval data were not sufficiently 

reliable and we excluded the information from our analyses.
Page 4 GAO-17-164 Federal Strategic Sourcing Initiatives

For savings data, we reviewed the methodologies used by each FSSI to 

calculate savings and compared them with savings principles approved in 

2014. Each of the current GSA FSSIs uses transactional data to calculate 

the difference between a baseline unit price and the FSSI price. 

Information Retrieval does not calculate savings based on changes in 

price, but rather, reports administrative savings as discussed later in the 

report. Due in part to the inconsistent spending data, we were also not 

able to independently verify the savings data reported for Information 

Retrieval and did not include these figures in our report. We also collected 

and reviewed data on FSSI adoption, as well as OMB and GSA efforts to 

obtain agency commitments to use the FSSIs and increase FSSI 

adoption. We interviewed OMB and GSA officials to identify factors that 

explain agency adoption of the FSSIs. We also interviewed GSA 

procurement officials about the factors affecting their use of the FSSIs 

and obtained documents from the FSSIs explaining why certain agencies 

did not use specific FSSIs, but we did not interview officials from the 

largest and highest spending procurement agencies responsible for FSSI

approval and oversight regarding the factors affecting their respective 

agencies’ use of the seven FSSIs we reviewed. We also assessed the 

extent to which the seven FSSIs incorporated key characteristics 

identified by OMB to include the collection and use of transactional data, 

the calculation of savings based on price, and the use of tiered pricing to 

reduce prices as cumulative sales volume increases.

To determine what lessons, if any, OFPP and GSA have identified from 

the FSSI program we reviewed the seven current FSSIs and conducted 

interviews with GSA and Library of Congress officials responsible FSSI 

implementation, as well as GSA officials and OFPP staff responsible for 

oversight. Based on this review, we identified lessons learned and 

corroborated our findings with GSA officials and OFPP staff responsible 

for the implementation and oversight of the FSSI program to determine 

which lessons were key. To determine the extent to which these key 

lessons learned are addressed by OFPP under its category management 

initiative, we reviewed and analyzed category management policies and 

guidance. We also interviewed officials from GSA’s Category 

Management Program Management Office and OFPP staff. We also 

reviewed the CAP goal quarterly progress updates for fiscal years 2012 

through 2016 as posted on Performance.Gov for both strategic sourcing 

and category management. See appendix II for a more in-depth 

description of our scope and methodology.

We conducted this performance audit from November 2015 to October 

2016 in accordance with generally accepted government auditing 
Page 5 GAO-17-164 Federal Strategic Sourcing Initiatives

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

Our prior work has shown how leading companies use strategic 

sourcing—a process that moves an organization away from making 

numerous individual procurements to purchasing through a broader 

aggregate approach—to manage up to 90 percent of their procurements 

and achieve savings of 10 to 20 percent on the goods and services they 

buy.6 A strategic sourcing effort begins after an opportunity is identified, 

usually through a spend analysis. Spend analyses provide knowledge 

about how much is being spent for given products and services, who the 

buyers and suppliers are, and where opportunities exist for leveraged 

buying and other tactics to save money and improve performance. Based 

on such analysis, organizations evaluate and prioritize commodities for 

strategic sourcing.

In 2013, we identified five foundational principles critical to carrying out an 

effective strategic sourcing approach: maintaining spend visibility, 

centralizing procurement, developing category strategies, focusing on 

total cost of ownership, and regularly reviewing strategies and tactics.7

Within those principles, leading companies highlighted the importance of 

identifying the most cost effective sourcing vehicles, clearly defining and 

communicating policies in order to eliminate unapproved purchases, or 

“rogue buying,” and ensuring that spending goes through approved 

contracts. Taken together, these principles enable companies to identify 

market trends, share knowledge about suppliers, make more informed 

contracting decisions, and take advantage of opportunities to save money 

and buy more efficiently. See appendix III for a full list of leading 

companies’ foundational principles for strategic sourcing.

 6GAO-12-919.

7GAO-13-417.

Background
Page 6 GAO-17-164 Federal Strategic Sourcing Initiatives

Since 2005, OMB has issued several memorandums to establish a 

framework, standards, and governance for government-wide strategic 

sourcing efforts. In its May 2005 memorandum, OMB defined strategic 

sourcing as the “collaborative and structured process of critically 

analyzing an organization’s spending and using this information to make 

business decisions about acquiring commodities and services more 

effectively and efficiently,” and directed agencies to take action to 

leverage and control government spending through strategic sourcing. In 

response to OMB direction, the Department of the Treasury and GSA, 

with support from OFPP, partnered to launch the FSSI program in 

November 2005 to strategically source commonly purchased products 

and services. The FSSI program was chartered under the purview of the 

Chief Acquisition Officer’s Council and the Strategic Sourcing Working 

Group with OFPP ultimately responsible for providing oversight and 

guidance as well as ensuring the overall effectiveness of the program. 

The Working Group, comprised of representatives of various agencies, 

was responsible for vetting and approving initiatives and sourcing 

strategies, and establishing standards, processes, and policies. The FSSI 

Program Management Office within GSA was established to support the 

Working Group and coordinate the efforts of the agencies designated as 

executive agents to implement individual FSSI initiatives; provide 

guidance and oversight; review information and recommendations; and 

makes strategic program decisions.

In December 2012, OMB issued guidance that formalized a governance 

structure, provided additional requirements, and identified key 

characteristics of federal strategic sourcing efforts.8 For example, key 

characteristics included the use of tiered pricing or other appropriate 

strategies to reduce prices as cumulative sales volume increases, and 

contractual requirements with vendors to provide sufficient pricing, usage, 

and performance data to enable the government to improve commodity 

management practices on an ongoing basis. Noting that the majority of 

federal spending is driven by a small number of large agencies, OMB 

established the Strategic Sourcing Leadership Council (Leadership 

Council) and called on the seven largest and highest spending agencies 

and the Small Business Administration to take a leadership role on 

 8OMB, Memorandum for the Heads of Executive Departments and Agencies, Subject: 

Improving Acquisition Through Strategic Sourcing, M-13-02 (Washington D.C.: Dec. 5, 

2012).

Federal Strategic Sourcing 

Initiative
Page 7 GAO-17-164 Federal Strategic Sourcing Initiatives

strategic sourcing.9 The Leadership Council is chaired by the 

Administrator of OFPP and comprised of representatives from the 

Departments of Defense (DOD), Energy, Health and Human Services, 

Homeland Security, and Veterans Affairs; GSA; the National Aeronautics 

and Space Administration (NASA); and the Small Business 

Administration. See appendix IV for key provisions from the 2012 OMB 

strategic sourcing memorandum.

The Leadership Council is expected to propose plans and management 

strategies to maximize the use of strategic sourcing efforts. For example, 

in 2013, the Leadership Council established a three step key decision 

point process for developing, approving, and overseeing the FSSIs which 

is described in GSA’s FSSI guidance. The Leadership Council must 

provide approval at each step in order for a prospective FSSI to progress 

through the strategic sourcing process and obtain the requisite 

designation. Figure 1 summarizes the key decision point process.

 9The Strategic Sourcing Leadership Council replaced the Strategic Sourcing Working 

Group in December 2012. In December 2014, the Strategic Sourcing Leadership Council 

was renamed the Category Management Leadership Council. We will refer to this body as 

the Leadership Council throughout the report.
Page 8 GAO-17-164 Federal Strategic Sourcing Initiatives

Figure 1: Key Decision Point Process for Development and Approval of Federal 

Strategic Sourcing Initiatives

For the first key decision point, any interested agency can present a high 

level opportunity analysis for a commodity which they believe may be a 

FSSI candidate. If the Leadership Council approves the candidate at the 

first key decision point, a commodity team is formed to develop and refine 

the commodity strategy and develop a solution strategy. If the Leadership 

Council approves the second key decision point, the commodity team is 

allowed to execute the strategy. After execution, the commodity team is to 

summarize the solution and assess success. If the new solution proves 

valuable, then it is approved at the third decision point and given “FSSI”

designation and, it is to become mandatory to the maximum extent 

practicable. Because the key decision point process is relatively new, it 

has not been fully applied to all of the current FSSIs in our review. For 

example, Janitorial and Sanitation Supplies and Maintenance, Repair, 

and Operations Supplies are listed on GSA’s FSSI website although they 

have not been formally approved as FSSIs at the third key decision point.

After determining the scope and the total government-wide spending on 

the commodities covered by the proposed solution, the commodity team 

is to refine the scope by establishing a baseline for the amount of 

spending that can potentially be addressed by the solution. This baseline, 

referred to as addressable spend, is to be used to measure FSSI 

adoption by calculating the amount of actual spending through the FSSI 

compared to the total addressable spend and is required for approval at 
Page 9 GAO-17-164 Federal Strategic Sourcing Initiatives

the second key decision point. Addressable spend may identify some 

spending as non-addressable to accommodate agency needs or unique 

circumstances such as existing agency contractual arrangements where 

termination costs would be prohibitive and legislative or other authorities 

unique to an agency. If an agency seeks to exclude a portion of spending 

from the addressable spend total, the agency must provide the basis for 

the exclusion to the commodity team. If resolution is not reached at the 

commodity team level, the request for exclusions will be presented to the 

Leadership Council for discussion and resolution.

Using the approved addressable spend as a baseline, Leadership Council 

agencies are required to provide the lead agency with non-binding 

commitment letters stating an agency’s intended volume of purchases 

through the proposed solution, for purposes of negotiation and pricing, 

prior to award. These letters do not obligate the agency to use a solution 

if, for example, the pricing, terms, and conditions, are not aligned with 

expectations. Nonetheless, the lead agency is to describe how each 

Leadership Council agency will transition from existing vehicles to the 

new solution. The lead agency is also responsible for ongoing 

management of the FSSI including keeping prices competitive, monitoring 

vendor performance, tracking agency adoption, and managing to 

performance metrics including savings and small business achievement 

against benchmarks, among other things. According to OMB’s 

addressable spend guidance, identifying addressable spend, determining 

conditional commitment levels, and measuring adoption rates are critical 

to the success of strategic sourcing.

Further, the Leadership Council is to continuously monitor information on 

performance and promote agency adoption, among other things. To 

assist their effort, GSA established the FSSI Program Management Office 

to monitor overall FSSI program usage for all commodities, to collect and 

analyze performance data, and to provide an assessment to the 

Leadership Council. The office is also tasked with disseminating best 

practices, providing guidance on performance measures and data 

collection, and recommending improvements to the FSSIs.

In addition to formalizing the governance structure for government-wide 

strategic sourcing efforts, OMB also identified an interim CAP goal for 
Page 10 GAO-17-164 Federal Strategic Sourcing Initiatives

strategic sourcing in February 2012.10 CAP goals were introduced in the 

fiscal year 2013 federal budget and focused on 14 major issues including 

strategic sourcing. The strategic sourcing CAP goal statement for fiscal 

years 2013 and 2014 directed agencies to increase their use of FSSI 

vehicles by at least 10 percent in both fiscal years 2013 and 2014. For 

fiscal years 2014-2015, OMB established new measures for the strategic 

sourcing CAP goal to measure Leadership Council agency savings, 

adoption, small business use, and reduction in duplication.

Further, federal agencies have also initiated strategic sourcing efforts that 

do not fall within the purview of the FSSI program. For example, the 

Department of Veterans Affairs reported that its strategic sourcing efforts 

generated $1.4 billion in cost avoidances in fiscal year 2015, including 

savings from pharmaceutical purchases and medical supplies. The 

Department of Homeland Security reports that it saved $466 million in 

fiscal year 2015 through a range of agency- and government-wide 

strategic sourcing vehicles including FSSIs.

In December 2014, OFPP issued a memorandum that directs agencies to 

take specific actions to implement category management, an approach 

which is intended to manage entire categories of spending across 

government for commonly purchased goods and services.11

The memorandum notes that despite some progress in implementing 

strategic sourcing efforts, agencies continue to duplicate procurement 

 10In 2014, we reported that the first four updates for the strategic sourcing CAP goal 

included planned “next steps,” which described actions that were to contribute to the 

achievement of the goal but lacked clear time frames for completion. See GAO, Managing 

for Results: OMB Should Strengthen Reviews of Cross-Agency Goals, GAO-14-526 

(Washington, D.C.: June 10, 2014). In 2016, we found that of the selected goals we 

reviewed (not including the category management goal) most goals did not have quarterly 

targets required under GPRAMA and many were still developing performance measures. 

We recommended that CAP goal teams should be more transparent about the steps they 

are taking to develop targets and measures on Performance.gov. See GAO, Managing for 

Results: OMB Improved Implementation of Cross-Agency Priority Goals, But Could be 

More Transparent About Measuring Progress, GAO-16-509 (Washington, D.C.: May 20, 

2016).

11OMB, OFPP, Memorandum for Chief Acquisition Officers and Senior Procurement 

Executives: Transforming the Marketplace: Simplifying Federal Procurement to Improve 

Performance, Drive Innovation, and Increase Savings (Washington D.C.: Dec. 4, 2014).

Category Management
Page 11 GAO-17-164 Federal Strategic Sourcing Initiatives

efforts and award contracts for similar services to the same vendors, 

which imposes significant costs on contractors and agencies. In May 

2015, the Leadership Council approved government-wide category 

management guidance which describes category management as a 

fundamental shift from the practice of handling purchasing, pricing 

analysis, and vendor relationship management in thousands of 

procurement units across government. According to the guidance, the 

federal government will “buy as one” under category management by 

creating common categories of products and services across agencies 

and manage each category as a mini-business with its own set of 

strategies, led by a category manager and supporting senior team with 

expertise in their assigned category. This approach includes not only 

strategic sourcing, but also a broader set of strategies, such as 

developing common standards in practices and contracts, improved data 

analysis and information sharing to better leverage the government’s 

buying power and reduce unnecessary contract duplication.

In December 2014, the Leadership Council approved organizing federal 

procurement spending into 10 common categories such as IT, travel, and 

construction. According to OFPP, these 10 categories collectively 

accounted for $275 billion in fiscal year 2014 federal spending. Figure 2 

identifies the 10 common categories.
Page 12 GAO-17-164 Federal Strategic Sourcing Initiatives

Figure 2: Common Categories Identified under Category Management, Fiscal Year 

2014 Spending (dollars in billions)

In December 2014, the Leadership Council was given responsibility for 

approving government-wide categories of spend, prioritizing categories 

for management, and establishing guiding principles, among other duties. 

Category managers—government-wide leaders who are to develop and 

oversee category-specific strategies and encourage and drive category 

management principles and practices—are approved by OFPP and the 

Leadership Council. The effort is supported by GSA’s Category 

Management Program Management Office, and the Acquisition Gateway, 

an IT portal that supports category management by sharing contract 

information such as terms and conditions, transactional pricing data, and 

contracting best practices. Table 1 identifies the key roles and 

responsibilities for category management governance.
Page 13 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 1: Category Management Governance and Key Responsibilities

Key responsibilities

Office of Federal Procurement Policy 

(OFPP)

The executive-level office responsible 

for providing oversight and guidance, 

and ensuring overall effectiveness of 

the category management initiative

• Set strategic policy direction

• Issue category management policy guidance and directives to federal agencies

• Develop reporting requirements for agencies related to progress and performance

• Monitor category progress and performance, including development of government-wide 

metrics and goals

• Determine Leadership Council Charter and membership

• Participate in the selection of category managers, and approve their selection

Leadership Council

Comprised of agency acquisition, 

information technology, financial, and 

other senior agency leadership, and 

serves as the primary governing body 

for category management.

Approve government-wide category strategic plans

• Prioritize categories and approve timelines for key milestones

• Establish guiding principles for defining best in class criteria and approve criteria 

proposed by category managersa

• Participate in the selection of category managers

• Make recommendations to OMB on policies, guidance, or other tools that will support 

improved management

• Establish a process for category managers to review and approve new business cases 

submitted to OMB

Support the Execution of Category Strategic Plans

• Contribute staff, resources, and information to the category teams

• Provide data and contract information, when not readily available, to determine best in 

class solutions

• In agency contracts, require sharing of prices offered, prices paid data, and contract 

terms and conditions

• Promote the use of centralized tools for market research, reducing contract duplication, 

comparing prices, terms and conditions

• Support vendor management efforts to better coordinate supplier relationships

• Review and monitor category performance

• Support development of and validate performance metrics

• Evaluate the performance of the category

• Provide and validate agency data in support of Cross Agency Priority goals and metrics

• Capture baseline agency-level pricing data and a baseline to measure success for 

category solutions

• Provide agency-level information to capture agency best practices
Page 14 GAO-17-164 Federal Strategic Sourcing Initiatives

Key responsibilities

Category Managers

Government-wide leaders who 

encourage and drive category 

management principles and practices.

They operate at the Level 1 category 

(e.g., IT) level, which may encompass 

multiple Level 2 categories (e.g., IT 

software).

• Lead data analytics and spend analysis, as well as standardization and collection efforts 

for assigned category

• Develop category strategic plan

• Define and track category performance metrics, including government-wide category 

management metrics

• Hire or Select Level 2 category leads(s) and other supporting personnel for category 

team. Assist Level 2 category (i.e. IT software) teams in strategic and operational 

development

• Serve as a key liaison and engage with appropriate stakeholders

• Formulate the category strategic initiatives for increasing spend under management

• Review agency business cases and make recommendations for approval to Leadership 

Council

General Services Administration 

Category Management Program 

Management Office

• Create and maintain category management guidance

• Develop standard procedures and share best practices across categories

• Facilitate data analysis and performance measurement / benchmarking

• Share tools and templates for category teams to utilize to enhance their management 

and execution of category management initiatives

• Share training and educational materials

• Develop and maintain the category structure

• Facilitate execution of approved category strategies

Source: GAO summary of Government-wide Category Management Guidance Version 1.0, May 2015. I GAO-17-164

a

The specific criteria for best in class acquisition vehicles will vary by category and commodity but w ill 

generally reflect a rigorous requirements definition and planning process; the requirement for vendors 

to provide prices paid, business intelligence, and performance data to enable agencies to improve 

their commodity management practices.

In February 2016, OFPP announced the Category Managers who will be 

overseeing the 10 categories of federal procurement spending. Category 

Managers’ first responsibility has been to prepare category strategic plans 

for Leadership Council approval. The category strategic plan is to identify 

category strategies, the reasons for selecting those strategies, how the 

category team plans to execute the strategies, and anticipated results 

(benefits, costs, and risks) associated with the strategies. The category 

strategic plan is then to be reviewed and approved by the Leadership 

Council before the category team assembles resources and teams as 

required to execute the strategies. The Leadership Council approved 

strategic plans for all 10 categories in June 2016.

According to Leadership Council category management guidance, 

performance reviews are to be conducted for each category at the 

beginning of each year. This review is to assess performance over the 

previous year and establish goals and targets for the upcoming year. 

Category reviews are to be briefed to the Leadership Council to share 

strategies, successes, and progress towards established goals and 
Page 15 GAO-17-164 Federal Strategic Sourcing Initiatives

targets. OMB also established a CAP goal for category management with 

goal elements focused on savings, small business goals, reduction in 

contract duplication and “spend under management.” Spend under 

management is a model designed to assess agency- and governmentwide category management maturity, and to highlight successes as well 

as development areas across all categories and federal agencies. For 

example, agency-level maturity can be characterized by the use of 

agency-level solutions and the implementation of policies to drive 

behavior change, among other characteristics. Government-wide maturity 

is characterized by the adherence to Leadership Council approved 

strategies, the collection of prices paid data, and analysis of outstanding 

opportunity spend relative to actual spend.

In September 2012, we reported that in fiscal year 2011 the FSSI 

program managed $339 million out of roughly $537 billion of total federal 

spending—or less than 1 percent—but reported achieving $60 million in 

savings.12 We also reported that the program faced key challenges in 

obtaining agency commitments to use new FSSIs and in increasing the 

level of agency spending directed through FSSI vehicles. Further, we 

found that the FSSI program had not yet targeted any of the 

government’s 50 highest-spend products and services for strategic 

sourcing. As such, we concluded that the focus only on low-risk, lowreturn efforts diminished the government’s ability to fully leverage its 

enormous buying power and achieve other efficiencies. To help ensure 

that government-wide strategic sourcing efforts further reflect leading 

practices, we recommended that OMB and OFPP issue an updated 

memorandum or other directive to federal agencies on calculating savings 

and establish metrics to measure progress toward goals; and direct the 

FSSI program to assess whether each top spend product and service 

government-wide is suitable for an FSSI, with a plan to address those 

products or services that were suitable for strategic sourcing. OMB and 

OFPP implemented our recommendation in part by establishing the 

Leadership Council to lead efforts to increase the government-wide 

management and sourcing of goods and services. The Leadership 

Council subsequently approved general principles for calculating savings 

 12GAO-12-919.

Related GAO Work
Page 16 GAO-17-164 Federal Strategic Sourcing Initiatives

for federal strategic sourcing initiatives in February 2014, and has begun 

to implement category management.

In January 2014, we reported on the extent to which data and 

performance measures are available on the inclusion of small businesses 

in government-wide strategic sourcing initiatives.13 We found that GSA 

generally considered small businesses and small disadvantaged 

businesses, but lacked data and performance measures. For example, 

although GSA collected baseline data on proposed FSSIs, it had not 

developed a performance measure to determine changes in small 

business participation going forward. Consistent with OMB guidance and 

to track the effect of strategic sourcing on small businesses, we 

recommended that the Administrator of GSA establish performance 

measures on the inclusion of small businesses in strategic sourcing 

initiatives. In response to this recommendation, GSA issued guidance in 

April 2015 that provided information on how to determine baseline data 

for small business participation in strategic sourcing initiatives and annual 

requirements for assessing small business participation relative to that 

baseline. Moreover, the guidance requires a corrective action plan if a 

strategic sourcing initiative falls below the baseline for two consecutive 

quarters. GSA also created a strategic sourcing template to track baseline 

small business participation and monitor the change in small business 

spending for each individual strategic sourcing initiative, as required by 

OMB. To help ensure that agencies are tracking the effect of strategic 

sourcing on small businesses, we recommended that OFPP monitor 

agencies’ compliance with the requirement to maintain baseline data and 

performance measures on small business participation in strategic 

sourcing initiatives. As of July 2016, OFPP staff stated that they are in the 

process of addressing this recommendation.

In September 2015, we found that the efforts of DOD, the Department of 

Homeland Security, and NASA to strategically manage spending for IT 

services, such as software design and development, have improved in 

recent years but still missed opportunities to leverage their buying 

 13GAO, Strategic Sourcing: Selected Agencies Should Develop Performance Measures 

on Inclusion of Small Businesses and OMB Should Improve Monitoring, GAO-14-126 

(Washington, D.C.: Jan. 23, 2014).
Page 17 GAO-17-164 Federal Strategic Sourcing Initiatives

power.14 Each of the agencies we reviewed designated officials 

responsible for strategic sourcing and created offices to identify and 

implement strategic sourcing opportunities, including those specific to IT 

services. Most of these agencies’ IT services spending, however, 

continued to be obligated through hundreds of potentially duplicative 

contracts that diminish the government’s buying power. These agencies 

managed between 10 and 44 percent of their IT services spending—

which collectively accounted for about $11.1 billion in fiscal year 2013—

through preferred strategic sourcing contracts in fiscal year 2013. Further, 

most of these agencies’ efforts to strategically source IT services had not 

followed leading commercial practices, such as clearly defining the roles 

and responsibilities of the offices responsible for strategic sourcing; 

conducting an enterprise-wide spend analysis; monitoring the spending 

going through the agencies’ strategic sourcing contract vehicles; or 

establishing savings goals and metrics. As a result, the agencies were 

missing opportunities to leverage their buying power and more effectively 

acquire IT services. We made a series of recommendations to each 

agency to improve their efforts to strategically source IT services. Each 

agency concurred with the recommendations addressed to their agency 

and have actions underway to implement them.

Over the last 5 years, GSA officials responsible for the FSSI program 

reported that federal agencies spent almost $2 billion through seven 

FSSIs and achieved an estimated $470 million in savings, an overall 

savings rate of about 25 percent, comparable to savings reported by 

leading commercial companies. Overall agency adoption of the FSSIs, 

however, has remained low, resulting in reduced potential savings. For 

example, in fiscal year 2015, the first year for which all seven FSSIs had 

performance data, only $462 million of the $4.5 billion—or about 10 

percent—in addressable spending targeted by the seven FSSIs we 

reviewed went through the FSSIs. In contrast, leading commercial 

companies historically manage 90 percent of their procurement spending 

through strategic sourcing approaches. Low adoption of the FSSIs by the 

large agencies that make up the Leadership Council—as well as 

government-wide adoption more generally—was due to a variety of 

 14GAO, Strategic Sourcing: Opportunities Exist to Better Manage Information Technology 

Services Spending, GAO-15-549 (Washington, D.C.: Sept. 22, 2015).

FSSIs Achieved 

Savings and Other 

Benefits, but Low 

Federal Agency Use 

of FSSIs Diminished 

Opportunities for 

Significant Savings
Page 18 GAO-17-164 Federal Strategic Sourcing Initiatives

reasons, including weaknesses in FSSI oversight and execution. The 

FSSIs generally incorporated the minimum characteristics of strategic 

sourcing vehicles identified by OMB guidance, such as collecting vendor 

transactional data, but not all FSSIs fully complied with OMB direction 

and maximized potential savings.

From fiscal year 2011 to fiscal year 2015, GSA reported that agencies 

spent almost $2 billion through the FSSIs and achieved an estimated total

of $470 million in savings, an overall savings rate of about 25 percent. In 

our prior work, we found that leading commercial companies achieved 

sustained savings rates of 10 to 20 percent using strategic sourcing 

approaches.15 As shown in table 2, reported annual spending through the 

FSSI program increased from $308 million in fiscal year 2011, when two 

FSSIs were in place, to $462 million in fiscal year 2015, when seven were 

in place. Four FSSIs experienced significant growth between fiscal year 

2014 and 2015, though the Office Supplies FSSI experienced a decline of 

nearly 30 percent. For example, the Wireless FSSI grew from about $4 

million in 2014 to over $26 million in fiscal year 2015. Average estimated 

savings rates for individual FSSIs over the period ranged from 11 to 55 

percent which met or exceeded savings achieved by leading commercial 

companies.

 15GAO-12-919.

FSSIs Achieved Savings 

and Other Benefits, but 

Low Federal Agency 

Spending through the 

FSSIs Continues to Limit 

Potential Savings
Page 19 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 2: Federal Strategic Sourcing Initiative (FSSI) Reported Spending and Savings for Fiscal Years 2011- 2015 (in millions)

FSSI spending by fiscal year

FSSI 2011 2012 2013 2014 2015

Total FSSI 

spending

Total FSSI 

savings 

Average 

savings %

General Services Administration

Office Supplies $199 $270 $246 $134 $95 $944 $182 19

Domestic Delivery Services 109 118 131 134 216 707 239 34

Print Management — 2 5 13 22 43 23 55

Wireless — — — 4 26 30 10 33

Maintenance, Repair and Operations 

Supplies — — — 28 91 120 13 11

Janitorial and Sanitation Supplies — — — — $11 11 3 27

Library of Congress

Information Retrieval — — — — — — —

Total spending through FSSIs $308 $390 $382 $314 $462 $1,856 $470

Source: GAO analysis of GSA and Library of Congress data. | GAO-17-164

Note: Calculations may be affected by rounding. We excluded spending and savings figures reported 

by the Library of Congress for the Information Retrieval FSSI in fiscal years 2014 and 2015 because 

w e were not able to independently verify the data reported.

Moreover, FSSIs such as Domestic Delivery Services and Print 

Management achieved savings through demand management which 

involves working with federal buyers and policy makers to identify and 

standardize requirements and specifications and eliminate unnecessary 

purchases and inefficient purchasing behaviors. For example, through 

use of the Print Management FSSI, GSA procurement officials explained 

that GSA significantly reduced its spending on print-related products and 

services by reducing its staff to printer ratio from 2 to1 to 14 to 1 and 

successfully reduced overall printing costs from an estimated $1.8 million 

in fiscal year 2011 to $0.6 million in fiscal year 2015. Domestic Delivery 

Services program officials reported that use of data from the FSSI helped 

agencies identify and reduce the number of express shipments and 

increased the use of more affordable ground services resulting in cost 

savings.

While the FSSIs generated savings and other benefits, federal agency 

adoption rates for the FSSIs remained far lower than the 90 percent 

achieved by leading commercial companies and reduced potential 

savings. For example, in fiscal year 2015, government-wide spending on 

the commodities covered by the FSSIs in our review was estimated by 

GSA officials to be $6.9 billion, with the amount identified as addressable 
Page 20 GAO-17-164 Federal Strategic Sourcing Initiatives

to be about $4.5 billion, a fraction of the $439 billion in fiscal year 2015 

federal procurement spending. Furthermore, only about $462 million of 

the $4.5 billion in addressable spend—or slightly more than 10 percent, 

went through the FSSIs (see table 3).

Table 3: Federal Strategic Sourcing Initiative (FSSI) Spending and Adoption for Fiscal Year 2015 (in millions)

FSSIs 

Estimated governmentwide spending on FSSI 

goods and services

Estimated spending 

addressable by the 

FSSI

Reported actual 

spending through the 

FSSI 

Adoption 

rate

General Services Administration

Office Supplies $1,254 $699 $95 14%

Domestic Delivery Services 545 424 216 51

Print Management 967 950 22 2

Wireless 1,300 976 26 2

Maintenance, Repair, and Operations 

Supplies 1,600 974 91 9

Janitorial and Sanitation Supplies 1,185 484 11 2

Library of Congress

Information Retrieval — — — —

Total $6,851 $4,507 $462 10% 

Source: GAO analysis of GSA and Library of Congress data. I GAO-17-164

Note: We excluded spending and adoption reported by the Library of Congress for the Information 

Retrieval FSSI because w e were not able to independently verify the data reported.

In fiscal year 2015, GSA reported that agencies spent $462 million 

through the FSSIs and saved $129 million, a savings rate of 28 percent. 

Had agencies spent the entire $4.5 billion of addressable spending 

through the FSSIs and achieved a similar savings rate of 28 percent, we 

estimate that up to $1.3 billion in fiscal year 2015 savings could have 

been achieved (see figure 3).
Page 21 GAO-17-164 Federal Strategic Sourcing Initiatives

Figure 3: Fiscal Year 2015 Actual and Potential Spending and Savings through the Federal Strategic Sourcing Initiatives

Note: We excluded spending and savings figures reported by the Library of Congress for the 

Information Retrieval FSSI because w ere not able to independently verify the data reported.

We identified several factors that contributed to low utilization including 

weaknesses in OFPP and Leadership Council oversight and various 

factors unique to the individual FSSIs. For example, in fiscal year 2015, 

the seven large procurement agencies within the Leadership Council 

reported spending $268 million through the FSSIs, less than 10 percent of 

the $2.8 billion that GSA estimated was the combined addressable 

spending for those agencies during the same period. In 2012, OMB 

directed Leadership Council agencies to promote, to the maximum extent 

practicable, strategic sourcing practices within their agencies including 
Page 22 GAO-17-164 Federal Strategic Sourcing Initiatives

issuing and enforcing mandatory use policies for government-wide 

solutions, such as the FSSIs.16 FSSI guidance on the key decision point 

process requires information from each Leadership Council agency 

concerning how each Leadership Council agency will transition from 

existing vehicles to the FSSIs. While some Leadership Council agencies 

provided commitment letters and issued mandatory use policies for 

FSSIs, most that did used the FSSIs far less than their letters suggested 

and none of the FSSIs included individual agency transition plans from 

Leadership Council agencies to increase FSSI adoption as required. In 

addition, according to OFPP staff and GSA officials, neither OFPP nor the 

Leadership Council revisited those commitments or held agencies 

accountable for meeting them or provided monitoring to ensure that 

transition plans from existing agency vehicles to the FSSIs were provided. 

Standards for internal control in the government highlight the need to 

enforce accountability by evaluating performance and holding 

organizations accountable.17

Similarly, for fiscal years 2014 and 2015, OMB established new measures 

for the strategic sourcing CAP goal to include Leadership Council agency 

adoption of the FSSIs, but did not establish targets and performance 

measures either at the aggregate or agency level, as discussed later in 

the report. OFPP staff reported that the Leadership Council agencies 

provided input into spending projections for fiscal years 2015 and 2016 

which are being used for internal management purposes although the 

Leadership Council agencies did not, at an aggregate level, meet their 

spend targets in fiscal year 2015. As of the first quarter of fiscal year 

2016, FSSI CAP goal measures are no longer tracked although existing 

FSSIs will not expire for years to come. In addition to accountability, 

 16In response to direction in the National Defense Authorization Act for Fiscal Year 2015, 

DOD, GSA, and NASA proposed in June 2016 to amend the Federal Acquisition 

Regulation (FAR) to implement a business rule that would require agencies, when 

purchasing supplies or services offered under an FSSI but not using the FSSI, to 

document the contract file to include a brief analysis of the comparative value, including 

price and other factors, between the supplies and services offered under the FSSI and 

those offered under the source to be used for the purchase. Such a rule, if properly 

implemented, could help increase the use of FSSIs or identify the challenges or 

disadvantages agencies may face in using the FSSIs. Pub. L. No. 113-291, § 836; 81 Fed. 

Reg. 39883.

17GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: September 2014).
Page 23 GAO-17-164 Federal Strategic Sourcing Initiatives

federal internal control standards call for agencies to monitor and 

evaluate results.18 OFPP in coordination with the Leadership Council, 

however, had not set targets and measures for individual Leadership 

Council agencies to gauge progress over time and hold individual 

Leadership Council agencies accountable for results. Until the Leadership 

Council and OFPP create a means to incentivize Leadership Council 

agencies to use FSSIs that they help create and approve, and measure 

results against individual agency targets, the FSSIs are at risk of 

continuing to experience low use and by extension missed opportunities 

for savings.

Additionally, several of the individual FSSIs experienced challenges that 

affected, to varying degrees, their efforts. For example:

• The Office Supplies FSSI estimated Leadership Council agencies’

addressable spend to be $410 million, but these agencies only spent 

$55 million through the FSSI in fiscal year 2015. Office Supplies 

officials attributed the low spending in fiscal year 2015 to delays 

during the acquisition process which compressed the amount of 

overlap between the second and third generation of the FSSI. As a 

result, when the FSSI contracts were awarded and unsuccessful 

offerors filed bid protests, the FSSI experienced a 6-month lapse in 

service. For example, the Air Force, with an estimated $36 million in 

addressable spending in fiscal year 2015, suspended its mandatory 

use policy due to the protests and did not reinstate it until March 2015. 

Office Supplies officials also attributed low spending through the FSSI 

to an overall decline in the government-wide market for office supplies 

which according to officials has shrunk from $1.5 billion in fiscal year 

2012 to $1.3 billion in fiscal year 2015 due to factors such as 

increased telework and reductions in agency procurement budgets.

• The Wireless FSSI estimated that the combined addressable spend of 

Leadership Council agencies to be nearly $700 million, but they only 

spent $12 million through the vehicle in fiscal year 2015. The Wireless 

program reported that although six Leadership Council agencies were 

buying off the vehicle, there had been few large enterprise buys due 

to the limited ability of agency acquisition teams to centralize the 

 18GAO-14-704G.
Page 24 GAO-17-164 Federal Strategic Sourcing Initiatives

funding which pays for these service plans and devices.19 Wireless 

program officials also noted that they did not fully take into account 

when existing agency contracts would expire. For example, the 

program noted that several agencies needed up to 3 years to migrate 

from existing agency contracts to the FSSI.

In 2012, OMB identified the minimum characteristics of strategic sourcing 

vehicles to increase savings and enable the government to improve its 

commodity management practices. These characteristics include the 

collection and use of transactional data to support continuous government 

analysis of pricing, usage and performance data and the use of tiered 

pricing to reduce prices as cumulative sales volume increases. 

Transactional data refers to the information generated when the 

government purchases goods or services from a vendor including specific 

details such as descriptions, part numbers, quantities, and prices paid for 

the items purchased. The collection and use of transactional data is 

foundational to strategic sourcing as it allows the government to perform 

active commodity management, monitor pricing changes to ensure that 

the benefits of strategic sourcing are maintained, and to calculate savings 

based on changes in price. The six GSA FSSIs generally incorporated 

these minimum characteristics, whereas the Library of Congress’s

Information Retrieval FSSI did so to a limited extent.

Each of the GSA FSSIs currently collects vendor-reported transactional 

data to report total spending and to report total spending and to help 

calculate adoption rates and savings based on changes between a 

baseline unit price and the FSSI price. Prior to the creation of the 

Leadership Council in 2012, legacy FSSIs including the first and second 

generations of Office Supplies and Domestic Delivery Services, as well as 

Print Management, calculated savings based on methods approved by 

their respective commodity teams in accordance with guidelines approved 

 19In related work, GAO found that most agencies that it reviewed lacked adequate 

inventories of their mobile devices and associated service information, which limits their 

ability to track usage and make decisions to optimize cost savings at both the individual 

device level and across the enterprise. Further, without a current, valid, and complete 

inventory of mobile service contracts, agencies are less likely to be able to identify 

opportunities for consolidation and strategic sourcing, and thus are less likely to achieve 

cost savings. GAO, Telecommunications: Agencies Need Better Controls to Achieve 

Significant Savings on Mobile Devices and Services, GAO-15-431 (Washington, D.C.: 

May 21, 2015).

FSSIs Generally 

Incorporated OMB 

Characteristics to Help 

Foster Savings

Transactional Data and 

Savings
Page 25 GAO-17-164 Federal Strategic Sourcing Initiatives

by the Strategic Sourcing Working Group, the governance body which 

preceded the Leadership Council. These approaches generally consisted 

of comparing prices offered under the FSSI program to the prices offered 

under GSA’s Federal Supply Schedule program.20 Office Supplies 

officials acknowledged that this approach may have overstated savings 

by four to five percent because the schedule price represents a ceiling 

price that GSA negotiates with vendors and not the prices paid which can 

include additional discounts. Further, as we have recently reported, 

published schedule rates may not represent the actual prices paid under 

the schedule which can include additional discounts and better pricing 

due to competition at the task order level.21

In 2012, we recommended that OFPP issue direction to federal agencies 

that includes guidance on calculating savings.22 In 2014, the Leadership 

Council approved savings principles to include savings based on price, 

cost avoidance, and administrative savings. According to the guidance, 

the baseline unit price used to calculate price savings should be either the 

current schedule lowest quartile price, the lowest price on any contract for 

similar quantity, or a lower price available from an existing vehicle or data 

source identified by a commodity team member and agreed to by the 

Leadership Council. Further, savings methods are to be proposed and 

approved as part of second key decision point and approved by the 

Leadership Council.

Office Supplies, now in its third generation, has used the transactional 

data it has collected over time to refine its savings methodology and 

reduce price variation. Office Supplies program officials told us that 

starting in fiscal year 2014, the Office Supplies FSSI began to use the 

lowest quartile price from the schedule as a baseline when four or more 

price points are established. Office Supplies also uses transactional data 

to reduce price variance for identical goods. Referred to as the dynamic 

pricing model, the program requires vendors to offer prices that fall within 

 20The Federal Supply Schedule program is directed and managed by GSA and provides 

federal agencies with a simplified process for obtaining commercial supplies and services 

at prices associated with volume buying. FAR § 8.402.

21GAO, Federal Supply Schedules: More Attention Needed to Competition and Prices, 

GAO-15-590 (Washington, D.C.: July 9, 2015). 

22GAO-12-919.
Page 26 GAO-17-164 Federal Strategic Sourcing Initiatives

10 percent of the lowest price offered. As an example, an FSSI official 

stated that an identical toner cartridge might be listed for anywhere from 

$100 to $300. Dynamic pricing reduces this variability by capping the 

price for goods offered to no more than 10 percent greater than the 

lowest price. GSA officials emphasized that it took 3 years for the Office 

Supplies FSSI to collect and standardize sales data to include part 

numbers, manufacture name, and quantity which has allowed them to 

implement a more precise methodology. A senior GSA official reported 

that the Janitorial and Sanitation Supplies FSSI and the Maintenance, 

Repair, and Operations Supplies FSSI will both adopt the lowest quartile 

method of calculating savings and dynamic pricing once they have the 

data to do so.

Wireless FSSI officials told us that they collect and analyze transactional 

data from vendors, and can share the average discount available through 

the FSSI, but that contractual terms prohibit the FSSI from sharing the 

actual prices paid that ordering agencies pay which are often lower, 

unless a federal agency requests such information from the FSSI. The 

officials told us that this restriction inhibits the FSSI’s ability to 

demonstrate to agencies savings that could be achieved through use of 

the FSSI. Until this issue is addressed by clarifying the contract terms, the 

program will remain limited in its ability to make a business case to 

agencies on the potential cost savings from using the Wireless FSSI.

Information Retrieval officials reported that they collect transactional data 

from a limited number of vendors, but do not use that data to report 

spending or as the basis to calculate savings based on changes in price. 

Information Retrieval officials reported that after obtaining Leadership 

Council approval for FSSI designation, the program negotiated 

transactional data reporting requirements with 5 of its 69 vendors, those 

with aggregate sales above $3 million as of fiscal year 2014. Because 

Information Retrieval does not collect transactional data from all of its 

vendors, it lacks the data needed to calculate savings based on price. 

Rather, Information Retrieval calculates and reports administrative 

savings based on a methodology it developed which estimates savings 

based on assumptions about the number of hours a typical agency would 

spend on similar procurements and agency labor rates for contracting 

staff. While the Leadership Council recognizes administrative savings in 

its 2014 savings principles, we excluded Information Retrieval’s savings 

figures from our report in part because of inconsistencies and errors in its 

spending data that impeded our ability to independently verify the savings 

data.
Page 27 GAO-17-164 Federal Strategic Sourcing Initiatives

The GSA FSSI Program Management Office is responsible for ensuring 

oversight and support of the FSSIs including monitoring compliance with 

FSSI standards. Under the 2012 OMB memorandum and the 2014 

Leadership Council guidance for calculating savings, FSSIs are expected 

to collect transactional data use that information to calculate savings 

based on cost difference. Officials from the GSA FSSI Program 

Management Office, however, indicated that they previously had not 

collected or reviewed data from the Information Retrieval FSSI to ensure 

compliance with FSSI standards, but have begun to engage with the 

Library of Congress staff during the course of our review to gather more 

information on implementation of the FSSI. Until the GSA FSSI Program 

Management Office takes steps to ensure that the Information Retrieval 

FSSI meets these requirements, GSA and OFPP will not have the data or 

insight necessary to monitor and assess whether savings and other 

benefits are being achieved through the Information Retrieval FSSI.

According to OMB and GSA guidance, a tenet of strategic sourcing is that 

higher volume generally translates to lower prices. Tiered pricing is a 

mechanism to capture volume-based savings in contracts where the 

volume is unknown and allows customers to obtain percent discounts that 

increase as aggregate purchasing tiers are reached. As a result of low 

FSSI adoption, FSSI mechanisms such as tiered price discounts 

negotiated with vendors that were intended to drive further savings were 

not reached. Table 4 illustrates an example of a tiered pricing model.

Table 4: Example of FSSI Tiered Pricing Model

Tiers Annual sales Discount (%)

Base FSSI pricing < $10 million 0

Tier 1 $10 million-30 million 3 

Tier 2 $30 million-60 million 5

Tier 3 $60 million-100 million 7

Tier 4 >$100 million 10

Source: GSA FSSI guidance. I GAO-17-164

While six of the seven FSSIs we reviewed established tiered pricing 

agreements with at least some vendors, Office Supplies is the only FSSI 

with an active contract where purchases were sufficient to meet a tiered 

pricing threshold. Office Supplies officials reported that spending with one 

of the FSSI’s 24 vendors reached the $25 million tier triggering a two 

percent discount on all subsequent purchases. Officials expect spending 

with six to eight other vendors to reach the $10 million tier during fiscal 

Tiered Pricing
Page 28 GAO-17-164 Federal Strategic Sourcing Initiatives

year 2016 triggering a one percent discount. Print Management does not 

include tiered discounts and no changes are planned to the program 

since it is scheduled to end in September 2016. Information Retrieval 

negotiated tiered discounts with 5 of its 69 vendors, those with aggregate 

sales over $3 million.

Based on our review of seven current FSSIs and interviews with OFPP 

staff and GSA officials, we identified four key lessons which can be 

generally applied to category management. These are the need for (1) 

stronger enforcement mechanisms to drive category management 

success; (2) targets and measures to hold agencies accountable for 

results; (3) the collection and use of transactional data to ensure that the 

benefits of strategic sourcing are achieved; and (4) strategies to increase 

small business participation. While the category management initiative 

incorporates many of these key lessons in its guidance and 

memorandums, it does not establish expectations or a process to set 

specific targets and measures for Leadership Council agencies to use 

approved vehicles.

Our work found that the FSSIs achieved limited adoption and savings 

because individual agencies were not held accountable for results, in part 

because OMB and the Leadership Council did not exercise mechanisms 

to monitor agency use of the FSSIs, or drive or enforce agency 

compliance with commitment letters, transition plans, or the subsequent 

establishment of mandatory use or consideration policies. OFPP staff 

agreed with our assessment that a key lesson learned from the FSSIs is 

that stronger enforcement mechanisms are needed to increase agency 

compliance with category management plans and goals. A senior OFPP 

staff noted that the early premise of strategic sourcing was that agencies 

would readily use new strategic sourcing vehicles, but that level of use 

has been inconsistent.

OFPP staff stated that individual category management memorandums

include stronger compliance requirements and mechanisms than were 

present under the FSSI program to drive compliance. For example, 

OMB’s October 2015 policy for workstations, June 2016 policy for 

software licenses, and August 2016 policy for mobile devices all direct 

OFPP’s Category 

Management Initiative 

Incorporates FSSI 

Lessons Learned but 

Faces

Implementation 

Challenges

Key Lesson Learned: 

Stronger Enforcement 

Mechanisms to Drive 

Category Management 

Success
Page 29 GAO-17-164 Federal Strategic Sourcing Initiatives

agency Chief Information Officers to take specific actions within their 

agencies using new authorities and responsibilities provided to them 

under the Federal Information Technology Acquisition Reform Act to 

improve their agencies’ IT management policies and practices.23 For 

example, OMB’s October 2015 memorandum on workstations includes 

several provisions intended to encourage agency compliance such as 

prohibiting agencies from issuing new solicitations for laptops and 

desktops and directing them to leverage three existing solutions. It also 

directs agency Chief Acquisition Officers and Chief Information Officers to 

work together to develop transition and implementation plans for both the 

technical and acquisition aspects of the policy. Specifically, Chief 

Acquisition Officers were directed to provide baseline spend data for 

purchases made through the approved vehicles and identify when the 

agency will phase out existing contracts for workstations and transition to 

the preferred vehicles. Chief Information Officers were directed to develop 

implementation instructions for the use of standard configurations, the 

prohibition on new awards, oversight, compliance, and other 

management measures. Table 5 describes some of the key provisions of 

OMB’s category management policy for workstations.

 23Office of Management and Budget, M-16-02, Memorandum for the Heads of 

Departments and Agencies, Subject: Category Management Policy 15-1: Improving the 

Acquisition Management of Common Information Technology: Laptops and Desktops 

(Washington, D.C.: Oct. 16, 2015); OMB, M-16-12, Memorandum for the Heads of 

Departments and Agencies, Subject: Category Management Policy 16-1: Improving the 

Acquisition and Management of Common Information Technology: Software Licensing 

(Washington, D.C.: June 2, 2016); and OMB M-16-20, Memorandum for the Heads of 

Departments and Agencies, Subject: Category Management Policy 16-3: Improving the 

Acquisition and Management of Common Information Technology: Mobile Devices and 

Services (Washington, D.C.: Aug. 4, 2016).National Defense Authorization Act for Fiscal 

Year 2015, Pub. L. No. 113-291, div. A, title VIII, subtitle D, §§ 831, 837 (2014).
Page 30 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 5: Key provisions of OMB’s Category Management Policy for Workstations

Condition Strategy Policy

Agencies buy several hundred different types 

of laptops and desktops and pay a wide 

variety of prices for standard offerings and 

using different terms and conditions.

Nearly 80 percent of basic laptop and desktop 

needs can be met through five standard 

configurations.

Standardize laptop and desktop 

configurations for common 

requirements.

Chief Information Officers shall ensure that at 

least 80 percent of their agency’s new basic 

laptop and desktop requirements are 

satisfied with a standard configuration, 

unless an exception applies.

The three largest government-wide acquisition 

solutions account for about one third of the 

government’s civilian spending for laptops and 

desktops, with the remainder scattered across 

more than 2,400 additional contracts which 

reduces purchasing power and transparency 

into pricing.

Reduce the number of contracts for 

laptops by consolidating purchasing 

and using a fewer number of best in 

class contracts which reduce prices as 

cumulative sales increase.

Monitor prices paid, usage, and 

performance data.

Agencies are prohibited from issuing new 

solicitations for laptops and desktops and 

civilian agencies shall leverage three existing 

solutions unless an exception applies.

The Department of Defense (DOD) will 

execute its Enterprise Service Initiative which 

mandates the use of limited and targeted 

solutions.

Agencies do not buy laptops in a strategic and 

predictable manner that allows for the effective 

budgeting, replacement, and disposition.

Develop and modify demand 

management processes to optimize 

price and performance.

Agency Chief Information Officers shall adopt 

a uniform refresh cycle in which only a 

portion of laptops and desktops are at the 

end of their useful life and need to be 

replaced, and to focus the bulk of their 

buying through publicized buying events to 

maximize the government’s collective buying 

power. 

Source: GAO analysis of OMB’s December 2015 policy memorandum. I GAO-17-164

OMB’s June 2016 memorandum on enterprise software and August 2016 

memorandum on mobile devices and services follow a similar approach 

to the workstation policy in that they specify key responsibilities and 

requirements. For example, the Enterprise Software Category Team was 

established under category management and is co-managed by GSA, 

DOD, and OMB to guide the development of government-wide software 

license agreements for mandatory agency use. Under the policy, OMB is 

to encourage or direct use of existing best in class software licensing 

agreements. The memorandum further requires agencies to develop 

implementation plans, in accordance with guidance, to address how 

agencies will move from their existing agreements to those mandated 

under category management. Agencies must also justify and obtain 

approval to pursue new agreements that overlap or conflict with the 

mandated agreements. Similarly, the mobile devices and services 

memorandum directs agencies to baseline their usage for devices and 

services; reduce the number of contracts for mobile devices and services 

and transition to a government-wide solution or solutions; and modify 
Page 31 GAO-17-164 Federal Strategic Sourcing Initiatives

demand management practices to optimize plan pricing and device 

refresh schedules.

To help drive category management success, OFPP staff told us that they 

anticipate requiring the use of specific vehicles or agreements and 

requiring agencies to develop transition and implementation plans in 

subsequent category management memorandums. OFPP staff 

acknowledged that the IT category is unique in that it leverages efforts 

under the PortfolioStat initiative as well as the authorities provided to 

Chief Information Officers under the Federal Information Technology 

Acquisition Reform Act.24 However, OFPP staff indicated that OFPP can 

exercise its authority provided to the Administrator under the Office of 

Federal Procurement Policy Act to direct agencies to take certain 

actions.25 For example, under the Act, the Administrator is to provide 

overall direction of procurement policy and promote economy and 

efficiency in federal procurements.

Additionally, OFPP is also reviewing and updating its business case 

guidance for new interagency and agency-specific acquisitions to ensure 

awareness and appropriate coordination with the Leadership Council.26

This policy outlines required elements of a business case analysis as well 

as a process for developing, reviewing, and approving business cases to 

support the establishment and renewal of government-wide acquisition 

contracts and certain multi-agency contracts, multi-agency blanket 

purchase agreements under the federal supply schedules program, 

agency-specific contracts, and agency-specific blanket purchase 

 24In March 2012, OMB launched an initiative, referred to as PortfolioStat, which requires 

agencies to conduct annual reviews of their IT investments and make decisions on 

eliminating duplication, among other things. For additional information, see GAO, 

Information Technology: Additional OMB and Agency Actions Needed to Ensure Portfolio 

Savings Are Realized and Effectively Tracked, GAO-15-296 (Washington, D.C.: Apr. 16, 

2015).

2541 U.S.C. § 1101 et seq.

26OFPP guidance and FAR subsection 17.502-1(c) require agencies to prepare business 

cases prior to standing up certain inter-agency and agency-specific contracts. Office of 

Federal Procurement Policy: Memorandum for Chief Acquisition Officers and Senior 

Procurement Executives: Development, Review and Approval of Business Cases for 

Certain Interagency and Agency-Specific Acquisitions (Washington, D.C.: Sept. 29, 2011).
Page 32 GAO-17-164 Federal Strategic Sourcing Initiatives

agreements over a certain threshold.27 The purpose of the policy is to 

ensure that the expected return from investment in a contract or 

agreement is worth the effort and cost associated with planning, 

awarding, and managing a new vehicle, and to address unjustified 

duplication among contracts.28 Under the revised policy, category 

managers will be responsible for reviewing new agency business cases 

and advising the Leadership Council of potential duplication or 

opportunities for new or expanded strategic sourcing initiatives.

While OFPP’s October 2015 workstation memorandum established 

aggregate goals for adoption, it did not establish specific adoption goals 

or targets for individual agencies to achieve. Specifically, the 

memorandum calls for civilian agencies to increase their spending 

through Leadership Council-approved vehicles to 75 percent by the end 

of fiscal year 2018, but it did not provide specific targets for the 

Leadership Council agencies to achieve. Further, the overarching 

guidance to implement category management—the Leadership Council 

charter as updated in April 2016 and the Leadership Council’s May 2015 

category management guidance—do not specify the extent to which 

specific Leadership Council agencies should adopt category management 

solutions. For example, the April 2016 Leadership Council charter asks 

agencies to adopt approved strategies, but does not set an expectation to 

develop agency-specific targets for expected levels of Leadership Council 

agency use of the solutions approved. Moreover, the May 2015 guidance 

explains that Leadership Council agencies should advocate for advancing 

category management initiatives and increasing adoption of solutions, but 

does not include a process to specify a minimum level of use or other 

 27A government-wide acquisition contract is a task-order or delivery-order contract for 

information technology established by one agency for government-wide use. A multiagency contract is a task-order or delivery-order contract established by one agency for 

use by government agencies to obtain supplies and services consistent with the Economy 

Act, 31 U.S.C. § 1535. A blanket purchase agreement is a simplified method of filling 

anticipated repetitive needs for supplies or services by establishing “charge accounts” with 

qualified sources of supply. FAR §§ 2.101, 13.303-1(a). For purposes of OFPP’s 

guidance, an agency-specific contract is an indefinite-delivery, indefinite quantity contract 

intended for the sole use of the establishing department or agency. Agency-specific 

contracts may be agency-wide (sometimes referred to as “enterprise-wide”) or limited to 

one or more specific component organizations within the agency.

28For related GAO work, see GAO, Contracting Strategies: Data and Oversight Problems 

Hamper Opportunities to Leverage Value of Interagency and Enterprisewide Contracts, 

GAO-10-367 (Washington, D.C.: Apr. 29, 2010). 
Page 33 GAO-17-164 Federal Strategic Sourcing Initiatives

targets and performance measures by agency. Moreover, standards for 

internal control in the government highlight the need to evaluate 

performance and hold organizations accountable.29 Given the low use of 

FSSIs by the Leadership Council agencies, OFPP may be at risk of 

repeating that outcome unless it clarifies expectations and establishes a 

process in guidance regarding agency-specific targets and measures for 

Leadership Council agency adoption of category management initiatives 

and FSSIs and ensures that these targets and measures are set.

Our work found that the FSSI program lacked agency-specific targets and 

measures to increase agency accountability. OMB directed Leadership 

Council agencies to use and promote federal strategic sourcing efforts to 

the maximum extent possible, and established CAP goals to encourage 

agency adoption but did not establish agency-specific targets and 

measures by which to monitor and hold agencies accountable for using 

solutions that are strategically sourced or identified as best in class under 

category management.

OFPP staff identified several strategies under category management that 

resulted from lessons learned under the FSSI program which they expect 

will help increase agency accountability and results. For example, OFPP 

staff recognized the importance of establishing specific targets as a basis 

for holding agencies accountable for results. Specifically, the category 

management CAP goal aims to increase civilian agency spending on 

workstations through Leadership Council-approved vehicles from a 

baseline of 39 percent in 2015 to 75 percent by the end of calendar year 

2019 and to reduce the number of new/renewed contracts for 

workstations by 30 percent. OFPP reports CAP goal progress quarterly 

during the fiscal year. As of July 2016, OMB reported that agencies have 

spent $171 million on laptops and desktops and 58 percent of this spend 

has gone through the approved vehicles but acknowledged that most of 

the spending in this category was expected to occur in the fourth quarter 

of the fiscal year and were uncertain whether this level of adoption will 

continue. OMB’s category management CAP goal, however, does not 

report agency-specific targets and measures to monitor whether agencies 

adopted specific FSSI and category management vehicles. Given the low 

 29GAO-14-704G.

Key Lesson Learned: 

Targets and Measures to 

Increase Agency 

Accountability
Page 34 GAO-17-164 Federal Strategic Sourcing Initiatives

agency usage of the FSSIs, reporting agency specific usage of category 

management-approved vehicles is important to understand whether the 

category management effort is achieving results. Standards for internal 

control in the government highlight the need to enforce accountability by 

evaluating performance and holding organizations accountable.30 Without 

reporting on agency specific targets and measures in the CAP goal, OMB 

will continue to lack the means to monitor progress and hold agencies 

accountable for using best in class solutions or adopting category 

management principles.

On a more general level, OFPP staff also noted that the “spend under 

management” model tracks attributes such as leadership and strategy 

based on a tiered maturity model to measure agency- and governmentwide progress toward meeting category management goals. OFPP staff 

reported that they are using spend under management dashboards in 

management meetings to provide greater visibility into agency-level data 

by category. Data calls will be completed at least annually and agencies 

will be tracked and monitored on their progress toward agency- and 

government-wide maturity, according to OFPP staff.

Our work found that another key lesson learned from the FSSI program 

was collecting and using transactional data to perform active commodity 

management, monitor pricing changes to ensure that the benefits of 

strategic sourcing are maintained and to calculate savings based on 

changes in price. Under category management, OFPP, GSA, and the 

Leadership Council have taken a number of steps to institutionalize the 

collection and use of transactional data:

• Category management guidance emphasizes the importance of 

collecting transactional data to determine prices actually paid to 

support comparative analytics (i.e., normalizes for quantity or delivery 

term variances) and usage/business intelligence and performance 

data and enable agencies to improve their commodity management 

practices on an ongoing basis.

 30GAO-14-704G.

Key Lesson Learned: 

Collection and Use of 

Transactional Data
Page 35 GAO-17-164 Federal Strategic Sourcing Initiatives

• The Leadership Council charter establishes the expectation that 

member agencies share agency prices offered, transactional prices 

paid data, and contract terms and conditions, as requested.

• GSA launched an online portal called the Acquisition Gateway to 

house contract and pricing information for each of the categories in 

one central location. Content gathered from across government, and 

validated by the category manager, will provide information and 

expertise on data, acquisition vehicles, market intelligence, pricespaid information, sustainability-related information, and analysis.

• In June 2016, GSA published a rule on transactional data reporting.31

The rule creates new contract clauses requiring vendors to report 

transactional data such as part numbers, quantities, and prices paid. 

The new clauses will be initially implemented on a pilot basis for 

federal supply schedule contracts, and will apply to all new GSA

government-wide acquisition contracts and GSA government-wide 

indefinite-delivery, indefinite-quantity contracts.

OMB’s policy memorandum for workstations was informed by an 

interagency Workstation Category Team, established by the Leadership 

Council, led by NASA and comprised of subject matter experts and 

managers of large government-wide and agency-wide hardware 

contracts. The Workstation Category Team performed research into 

pricing, terms, and conditions. OMB’s 2015 workstation memorandum 

directs agencies to consolidate workstation acquisitions through three 

government-wide solutions to reduce administrative costs and drive 

greater transparency into pricing by simplifying the collection and 

comparison of this data. OMB determined that the three government-wide 

solutions were generally awarded and are managed according to 

category management principles, including the monitoring of prices paid, 

usage, and performance data. According to the policy, as well as 

category management guidance, the Leadership Council will evaluate the 

performance and value of these approved contracts on an annual basis 

and revise as necessary. In June 2016, OMB reported that ceiling 

catalogue prices for personal computers had dropped by up to 50 percent 

since the release of the workstation policy.

 3181 Fed. Reg. 41104. 
Page 36 GAO-17-164 Federal Strategic Sourcing Initiatives

To gain better visibility into prices for software agreements, OMB’s June 

2016 software policy directs executive agents of government-wide 

software agreements to post and maintain standard pricing and terms and 

conditions for the agreements on the Acquisition Gateway. This 

information will be used by the Enterprise Software Category Team—comanaged by GSA, DOD, and OMB—to identify existing agreements for 

approval and endorsement as best in class agreements for governmentwide use until new government-wide software agreements can be 

established. According to the software policy, these efforts will provide 

increased visibility into government-wide spending on software licenses 

which will be posted on the Acquisition Gateway to further assist in the 

creation of new software agreements and the development of other tools.

As we have previously reported, because strategic sourcing can reduce 

the number of available contracting opportunities, some members of the 

small business community have expressed concern about the impact of 

federal strategic sourcing initiatives on small businesses.32 Consequently, 

ensuring that small business concerns are appropriately addressed under 

the category management initiative is the fourth key lesson learned.

Category management guidance and policy emphasizes the goal of 

maintaining or increasing small business participation and requires all 

proposed strategic sourcing vehicles and category management 

strategies to baseline small business use and set goals to meet or exceed 

that baseline. For example, the May 2015 category management 

guidance reiterates OMB’s 2012 policy to increase participation by small 

businesses to the maximum extent practicable by baselining small 

business use under current strategies and setting goals to meet or 

exceed that baseline participation under the new strategic sourcing 

vehicles. The Leadership Council also approved draft guidance pertaining 

to best in class criteria to include having a small business plan that 

baselines current participation rates and seeks to maintain or increase 

them.

In its October 2015 workstation memorandum, OMB established a small 

business baseline and goal to increase small business participation. 

 32GAO-14-126.

Key Lesson Learned: 

Small Business Concerns
Page 37 GAO-17-164 Federal Strategic Sourcing Initiatives

According to OMB’s policy on workstations, the percentage of workstation 

work (in dollars) awarded to small businesses in fiscal year 2014 under 

the three vehicles identified as best in class was 64 percent, or nearly 10 

percent greater than the small business participation rate for these 

commodities overall, and nearly 85 percent of the vendors on these 

solutions are small businesses. To maintain and increase this 

participation, the workstation category team, in consultation with the 

Small Business Administration and the Leadership Council, will review 

small business participation rates and work with the managers of the 

three vehicles to evaluate opportunities to increase participation.

OMB’s June 2016 software policy differs from the workstation policy in 

that it does not identify best in class vehicles, but rather directs the 

Enterprise Software Category Team to guide the development of 

government-wide software license agreements for mandatory agency 

use, and states that OMB will encourage or direct use of best in class 

existing software licensing agreements. OMB’s draft criteria for best in 

class vehicles states that specific criteria for determining best in class 

contracts will vary depending on the category and commodity, but such 

solutions should generally include a small business plan that baselines 

current participation rates and seeks to maintain or increase them.

GSA officials noted that each of the 10 government-wide categories will 

have a small business goal and that the category management program 

as a whole will consider the needs of small business when formulating 

procurement strategies. Further, category managers are expected to 

actively engage the small business community for their commodity area in 

order to address these businesses concerns. GSA officials also noted 

that they may consider new vendor management strategies such as small 

business on-ramping. Although not specifically addressed in category 

management guidance, officials noted that they consider small business 

on-ramping to be a best practice which will likely be featured as a strategy 

under category management. As an example, GSA’s One Acquisition 

Solution for Integrated Services contract vehicle includes on-ramping 

which GSA describes as a competitive process that can be conducted as 

necessary to address competition at the task order level, mergers and 

acquisitions that shrink the number of vendors, customer-driven request 

for a more focused sub-pool, and/or small businesses outgrowing their 

small business size. The purpose of the process is to ensure that there 

remain an adequate number of contractors eligible to compete for task 

orders to meet the government’s requirements.
Page 38 GAO-17-164 Federal Strategic Sourcing Initiatives

The FSSI program has led to procurement savings of nearly $500 million 

over the last 5 years and achieved a savings rate comparable to that 

achieved by leading commercial companies. But unlike leading 

companies that use their strategic sourcing vehicles 90 percent of the 

time, federal agencies directed less than 10 percent of their spending on 

the goods and services offered under the FSSIs, resulting in a missed 

opportunity to potentially have saved billions of dollars over the last 5

years. In fiscal year 2015 alone, GSA reported that agencies saved $129 

million out of the $462 million spent through the FSSIs, representing a 

savings rate of 28 percent. Had agencies spent the entire amount of 

addressable spending through the FSSI and achieved a similar rate of 28 

percent, we estimate that up to $1.3 billion in fiscal year 2015 savings 

could have been achieved. The low usage rates for the FSSI program are 

not unique. For example, our prior work found that agencies managed 

only 10 to 44 percent of their IT services spending through their preferred 

strategic sourcing contracts.

OFPP’s category management initiative dwarfs the size and scope of the 

FSSI program by targeting two-thirds of federal spending. Given the scale 

of category management, it is imperative that the lessons of implementing 

the FSSIs are learned and addressed. Chief among those lessons is that 

the large procurement agencies that make up the Leadership Council and 

govern the FSSI and category management initiatives must themselves 

be more accountable for achieving results. These agencies fell short in 

using the very same FSSIs that they approved, including providing 

transition plans for how agencies would migrate to use of FSSI solutions

as required under FSSI guidance. While many of the lessons learned 

during the course of the FSSI program have been reflected in the initial 

category management efforts, neither the April 2016 Leadership Council 

charter nor the Leadership Council’s May 2015 category management 

guidance establish expectations and a process for setting agency-specific 

targets and measures to assess adoption of solutions and performance. 

Moreover, since the category management CAP goal provides regular 

updates on progress, agency accountability for results would be 

enhanced by including agency specific progress against targets and 

performance measures. Given the low agency usage of the FSSIs, 

without such actions, and ensuring these targets and measures are set, 

OMB, and specifically the Office of Federal Procurement Policy, will lack 

the means to monitor progress and hold large procurement agencies 

accountable for using existing FSSIs or best in class solutions identified 

under subsequent category management efforts. Considering the 

magnitude of spending targeted by category management, taking these 

actions will increase the likelihood that category management will deliver 

Conclusions
Page 39 GAO-17-164 Federal Strategic Sourcing Initiatives

on its promise to substantially change the federal procurement landscape 

and generate substantial savings and other benefits for federal

customers.

At a tactical level, the GSA FSSI Program Management Office is 

responsible for ensuring oversight of the FSSIs, including monitoring 

compliance with FSSI standards. In two cases, more engagement by the 

office may be beneficial. For example, the Library of Congress’s

Information Retrieval FSSI collects transactional data to only a limited 

extent and does not use that data to calculate savings. GSA FSSI 

Program Management Office officials, however, indicated that they had 

not, until recently, engaged with the Information Retrieval FSSI to ensure 

compliance with FSSI standards. Similarly, the Wireless FSSI negotiated 

contractual terms that limit its ability to share actual prices paid with other 

federal agencies. Collecting and using transactional data and sharing 

prices paid information across federal agencies are key provisions of 

strategic sourcing and are identified in current strategic sourcing

guidance. The FSSI Program Management Office, in collaboration with 

the Information Retrieval and Wireless FSSIs, could enhance the 

performance of these FSSIs by making sure their practices are fully 

aligned with current guidance, to the maximum extent practicable.

To better promote federal agency accountability for implementing the 

FSSI and category management initiatives, we recommend that the 

Administrator of Federal Procurement Policy take the following four 

actions:

• Ensure that transition plans are submitted and monitored as required 

by FSSI guidance and guidance governing specific category 

management initiatives;

• Update the Leadership Council charter to establish an expectation 

that Leadership Council agencies develop agency-specific targets for 

use of the solutions approved;

• Revise the 2015 category management guidance to establish a 

process for setting targets and performance measures for each 

Leadership Council agency’s adoption of proposed FSSIs and 

category management solutions and ensure agency specific targets 

and measures are set; and

• Report on agency specific targets and metrics as part of the category 

management CAP goal.

Recommendations for 

Executive Action
Page 40 GAO-17-164 Federal Strategic Sourcing Initiatives

To improve the management of current FSSIs, we recommend that the 

GSA FSSI program management office take the following two actions:

• Provide oversight and support to the Information Retrieval FSSI to 

better align their practices with current strategic sourcing guidance 

related to collecting and using transactional data to calculate savings ; 

and

• In collaboration with the Wireless FSSI, determine whether the 

initiative should modify its contract terms to enable the FSSI to share 

prices paid data with other federal agencies.

We provided a draft of our report to OMB, GSA, and the Library of 

Congress. OMB and GSA concurred with our recommendations to 

improve oversight and accountability of FSSI and category management 

efforts. The agencies’ comments are summarized below and written 

comments from GSA and the Library of Congress are reproduced in 

appendix V and VI respectively. We also received technical comments 

from OMB and GSA which we incorporated, as appropriate.

OMB did not provide written comments on the draft report, but in oral 

comments, OMB staff generally agreed with our recommendations and 

identified several actions to address them. OMB actions include in part, 

the October 2016 issuance of a draft circular for public comment to 

implement category management practices.33

Regarding our recommendation that OFPP ensure that transition plans 

are submitted and monitored as required by guidance, OMB staff agreed 

that transition plans should comply with guidance. OMB staff indicated, 

however, that retroactively requiring agencies to submit FSSI transition 

plans is not needed because all of the FSSIs are currently being 

evaluated against category management best in class criteria as part of 

the migration to a category management approach. OMB staff stated that 

for example, the Office Supplies FSSI has been designated as a best in 

class solution, which will require agencies to submit transition plans. The 

OMB draft circular on category management also provides that OMB will 

issue policy on the agency migration process to best in class solutions. 

 3381 Fed. Reg. 69860.

Agency Comments 

and Our Evaluation
Page 41 GAO-17-164 Federal Strategic Sourcing Initiatives

We believe these actions, if implemented, meet the intent of our 

recommendation. Given that transition plans were also required under 

FSSI guidance but were not submitted, it will be important for OMB to 

assure that agencies follow through on submitting required plans going 

forward.

Regarding our second and third recommendations that OFPP establish 

an expectation that Leadership Council agencies develop agency-specific 

targets for use of solutions approved and revise guidance to establish a 

process for setting targets and performance measures, OMB staff agreed 

with the need for agency-specific targets for use of best in class solutions. 

OMB staff noted that they plan to establish targets by large spend 

agencies for best in class solutions and update category management 

governance and reporting procedures and processes as needed. OMB 

staff also agreed that Leadership Council agency progress toward 

implementing category management should be tracked and measured. 

Both OMB staff and the draft circular on category management indicate 

that spend under management will be used as the principal measure by 

which OMB will assess adoption of category management. As noted 

earlier in our report, spend under management tracks progress in areas 

such as data and metrics to monitor adoption of category management 

practices. OMB staff indicated that they plan to evaluate at least annually 

agencies’ spend under management results, which includes agency 

adoption of best in class solutions, and then review with agency leaders 

progress toward meeting goals. 

Regarding our fourth recommendation to report on agency specific 

targets and metrics as part of the category management CAP goal, OMB 

staff indicated that results achieved relative to CAP goal targets will be 

reported on a quarterly basis on Performance.Gov. In addition, OMB will 

track agency spend through best in class contracts and these data will 

likely be used as an internal category metric and shared with the 

agencies. Taken together, these actions are responsive to our 

recommendations; however, given the low use of the FSSIs, OMB should 

continue to carefully monitor category management implementation as it 

moves forward and ensure that OFPP uses the planned targets and 

measures noted above to hold agencies accountable for individual 

results. In short, greater accountability can lead to increased savings. 

In GSA’s written comments, GSA agreed with our recommendations to 

provide oversight and support to the Information Retrieval FSSI and 

determine whether the Wireless FSSI should modify contract terms to 

better share prices paid data. GSA plans to conduct a gap analysis of the 
Page 42 GAO-17-164 Federal Strategic Sourcing Initiatives

Information Retrieval FSSI and its compliance to FSSI standards to 

include determining unmet practices required for collecting and using 

transactional data for the FSSI program management office governmentwide oversight and reporting, as well as providing the Library of Congress 

with FSSI best practice tools and resources related to collecting 

transactional data and calculating savings. With respect to our 

recommendation regarding the Wireless FSSI, GSA told us they would 

conduct an assessment to determine the best approach to share Wireless 

FSSI prices paid data with other federal agencies. 

In written comments, the Library of Congress concurred with the report’s 

findings and noted that initial progress has been made to ensure that its

partnership with GSA results in enhanced analysis and transparency of 

the Information Retrieval FSSI.

We are sending copies of this report to the appropriate congressional 

committees; the Administrator of General Services; the Inspector 

General, Library of Congress; and the Director, Office of Management 

and Budget. In addition, the report is available at no charge on the GAO 

website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me on (202) 512-4841 or dinapolit@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made key contributions to this 

report are listed in appendix VII.

Timothy J. DiNapoli

Director, Acquisition and Sourcing Management
Appendix I: Summary of Federal Strategic 

Sourcing Initiatives Included in Our Review

Page 43 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 6: Summary of Federal Strategic Sourcing Initiatives (FSSI) Included in Our Review

Federal Strategic 

Sourcing Initiative/ 

executive agency

Description of product and/or 

service offered

Number of

small business vendors of

total number of vendors Period of performance

Office Supplies/General 

Services Administration 

(GSA)

Consumable office supplies, such as 

printer toner, pens, and staplers

Second Generation:

13 of 15

Third Generation:

23 of 24

Second Generation

June 2010-May 2014

Third Generation

December 2014-August 2020

Domestic Delivery

Services/GSA

Delivery services for domestic small 

packages

Second Generation:

0 of 1

Third Generation:

0 of 3

Second Generation

August 2009-September 2014

Third Generation

October 2014-September 2017

Print Management/GSA Printers, equipment maintenance and 

repair, and fleet size evaluations that 

enable agencies to determine the 

appropriate amount of equipment 

needed for printing, copying, scanning, 

and faxing

6 of 12 September 2011-

September 2016

Wireless/GSA Wireless cell phone, plans, services, 

and devices

0 of 4 May 2013-May 2018

Janitorial and Sanitation 

Supplies/GSA

Cleaning compounds, paper products, 

and motorized and non-motorized 

cleaning equipment.

18 of 21 July 2014-July 2019

Maintenance, Repair, and 

Operations Supplies/GSA

Hardware, tools, tool cabinets, paints, 

adhesives, and sealants

8 of 9 February 2014-

February 2019

Information Retrieval/

Library of Congress

Access to legal, science, technology, 

and engineering online content

12 of 69 September 2013 -

September 2018

Source: GAO summary of General Services Administration (GSA) and Library of Congress data. I GAO-17-164

Note: Period of performance assumes that all option years w ill be exercised.

Appendix I: Summary of Federal Strategic 

Sourcing Initiatives Included in Our Review
Appendix II: Objectives, Scope, and 

Methodology

Page 44 GAO-17-164 Federal Strategic Sourcing Initiatives

We were asked to examine the Federal Strategic Sourcing Initiative 

(FSSI) program and lessons learned. This report addresses (1) the extent 

to which savings and other benefits have been achieved by the FSSI 

program, and (2) lessons, if any, from the Office of Federal Procurement 

Policy (OFPP) and General Services Administration (GSA)

implementation of the FSSI program and the extent to which those 

lessons have been incorporated into OFPP’s category management 

initiative.

We focused our review on seven FSSIs that were active between fiscal 

years 2011 and 2015: (1) Office Supplies; (2) Domestic Delivery Services; 

(3) Print Management; (4) Wireless; (5) Maintenance, Repair, and 

Operations Supplies; (6) Janitorial and Sanitation Supplies; and (7) 

Information Retrieval. This covers the period since we last assessed FSSI 

implementation through the last full year for which FSSI spending and 

savings data was available. GSA is the executive agent for all the FSSIs 

except Information Retrieval which is administered by the Library of 

Congress. We excluded the Telecommunications Expense Management 

FSSI which ceased operations in the third quarter of fiscal year 2014 

because limited data on the program were available. FSSIs establish 

multiple award blanket purchase agreements, basic ordering agreements, 

and/or indefinite delivery, indefinite quantity contracts, through which 

federal agencies may obtain the specific goods and services they need.

To determine the extent to which savings and other benefits have been 

achieved through the seven FSSIs, we collected and reviewed agency 

reported data on spending, savings, and adoption. We also reviewed 

FSSI guidance on the key decision point process and program 

documents, and interviewed officials responsible for each of the FSSIs 

under our review as well as the FSSI Program Management Office within 

GSA which is responsible for monitoring overall FSSI program 

performance and usage regardless of the lead agency managing the 

initiatives.

For government-wide and addressable spending data, we reviewed 

agency reported data, acquisition plans, business case analyses, and key 

decision point documents prepared for Leadership Council review. We 

also reviewed relevant Office of Management and Budget (OMB) and 

GSA guidance and interviewed FSSI program officials to clarify our 

understanding of how each program developed its government-wide 

spending figures. These figures were typically based on a variety of data 

sources including data from the Federal Procurement Data System-Next 

Generation, and purchase card data. Since government-wide spending 

Appendix II: Objectives, Scope, and 

Methodology
Appendix II: Objectives, Scope, and 

Methodology

Page 45 GAO-17-164 Federal Strategic Sourcing Initiatives

figures are estimates and not actual performance, we reviewed the 

methods used to formulate them and found them to be reasonable and 

the data sufficiently reliable for providing appropriate context for the 

actual spending that went through the FSSI vehicles. We also reviewed 

program documents and interviewed FSSI program officials to better 

understand the basis and rationale for spending excluded from 

addressable spending. This baseline, referred to as addressable spend, 

is to be used to measure FSSI adoption by calculating the amount of 

actual spending through the FSSIs as a percentage of the total 

addressable spending through the FSSIs and is required for approval at 

the second key decision point.

For FSSI spending and savings data, we took a number of steps to 

assess the reliability of the data reported by each FSSI. For the GSA 

FSSIs which report spending based on vendor reported transactional 

data, we obtained documentary and testimonial evidence on the internal 

controls used by vendors, the FSSI teams, and the FSSI Program 

Management Office to ensure the accuracy of the spending data 

reported. For three of the six GSA FSSIs, we also collected and reviewed 

a non-generalizable sample of transactional data reports. The Library of 

Congress does not report spending through the Information Retrieval 

FSSI based on vendor reported data although it collects a limited amount 

of such data, and we took similar steps to assess their reliability. We 

determined that the spending data for the GSA FSSIs were sufficiently 

reliable for our purposes but that the spending data for Information 

Retrieval lacked internal controls, were inconsistent, and contained 

errors. As a result, the Information Retrieval spending data were not 

sufficiently reliable and we excluded it from our analyses.

For savings data, we reviewed the methodologies used by each FSSI to 

calculate savings and compared them with the savings principles 

approved by the Leadership Council in 2014, which include price savings, 

cost avoidance, and administrative savings. Each of the GSA FSSIs uses 

transactional data to calculate the difference between a baseline unit 

price and the FSSI price. While the FSSIs varied in the precision of their 

methods, we verified that they generally complied with Leadership 

Council guidance for calculating savings and confirmed with GSA officials 

that these methods were approved by their respective commodity teams 

or the Leadership Council. Information Retrieval does not calculate 

savings based on price, but rather reports administrative savings. While 

guidance allows FSSIs to report administrative savings, due in part to the 

inconsistencies and errors in the Information Retrieval’s spending data, 
Appendix II: Objectives, Scope, and 

Methodology

Page 46 GAO-17-164 Federal Strategic Sourcing Initiatives

we could not independently verify the savings data reported and did not 

include those figures in our report.

For adoption rates reported by the FSSIs, we focused our analysis on 

fiscal year 2015. We verified that the adoption rates reported by GSA 

were calculated correctly based on the addressable and actual spending 

reported. We also performed our own calculations to determine the 

adoption rates for Leadership Council agencies based on the addressable 

and actual spend data reported by GSA.

To better understand the factors that explain agency adoption of the 

FSSIs, we reviewed guidance on the key decision point process which 

was established by the Leadership Council in 2013 as a framework for 

the development, approval, and oversight of the FSSIs. We identified 

requirements for Leadership Council agencies to provide the FSSIs with 

commitment letters based on their addressable spending and to issue 

mandatory use policies as appropriate and assessed the extent to which 

those agencies actually used the FSSIs in accordance with the 

commitments they provided and mandatory use policies they 

implemented. We also interviewed GSA procurement officials about the 

factors affecting their use of the FSSIs and obtained documents from the 

FSSIs in which agencies explained their rationale for not using specific 

FSSIs, but we did not interview officials from each agency within the 

Leadership Council regarding the factors affecting their respective 

agencies’ use of the seven FSSIs we reviewed. In addition, we 

interviewed FSSI program officials and senior leadership officials within 

GSA and OMB about Leadership Council agency adoption of the FSSIs, 

as well as government-wide adoption more generally.

We also assessed the extent to which the seven FSSIs incorporated key 

characteristics identified by OMB to include the collection and use of 

transactional data, the calculation of savings based on changes in price, 

and the use of tiered pricing to reduce prices as cumulative sales volume 

increases. For each FSSI we interviewed FSSI program officials and 

collected program documents such as acquisition plans, contract 

documents specifying contractual terms requiring vendors to provide 

certain data and information on the use of tiered discounts.

To determine what lessons, if any, from OFPP and GSA implementation 

of the FSSI program and the extent to which those lessons have been 

incorporated into OFPP’s category management initiative we reviewed 

the seven current FSSIs and conducted interviews with GSA and Library 

of Congress officials responsible FSSI implementation, as well as GSA 
Appendix II: Objectives, Scope, and 

Methodology

Page 47 GAO-17-164 Federal Strategic Sourcing Initiatives

officials and OFPP staff responsible for oversight. Based on this review, 

we identified lessons learned which can be generally applied to category 

management and corroborated our findings with GSA officials and OFPP 

staff responsible for the implementation and oversight of the FSSI 

program to determine which lessons were key. We also reviewed 

category management policy and guidance and independently assessed 

the extent to which these lessons had been incorporated. We also 

reviewed the CAP goal quarterly progress updates for fiscal years 2012 

through 2016 as posted on Performance.Gov for both strategic sourcing 

and category management.

We conducted this performance audit from November 2015 to October 

2016 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix III:Leading Companies’ 

Foundational Approaches for Strategic 

Sourcing

Page 48 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 7: Leading Companies’ Foundational Approaches for Strategic Sourcing

Principle 1: Maintain Spend Visibility

• Automate and integrate procurement and financial systems across the organization

• Establish a catalogue of defined services and related terminology to be applied 

consistently across invoice line items to allow for more efficient spend analysis

Principle 2: Centralize Procurement 

• Centralize procurement knowledge and decisions by aligning, prioritizing, and 

integrating procurement functions within the organization

• Ensure that spending goes through approved contracts, which is the key to an 

effective centralized process

• Clearly define and communicate policies to eliminate unapproved purchases, or 

“rogue buying”

Principle 3: Develop Category Strategies

• Identify the most cost-effective sourcing vehicles and define supplier selection 

criteria for each category of service

• Conduct internal spend and stakeholder analyses; external market research and 

supply market analyses; and review business requirements and cost modeling

• Consider current and projected requirements, volume, cyclicality of demand, risk,

supplier base competition trends, the company (agency’s) relative buying power, 

and market price trends

Principle 4: Focus on Total Cost of Ownership

• Consider factors other than price, such as average time to complete a task, supplier 

diversity, and sustainability to make holistic purchase decisions

• Examine suppliers’ management models for maturity, including how well they 

manage and train staff and use appropriate cost management tools

Principle 5: Regularly Review Strategies and Tactics

• Review tactics frequently to identify new opportunities for savings

• Avoid contract lengths of over 3 to 4 years to retain flexibility to adapt to market 

trends 

Source: GAO analysis of commercial leading practices. I GAO-17-164

Appendix III: Leading Companies’

Foundational Approaches for Strategic 

Sourcing
Appendix IV: Key Provisions from the Office of 

Management and Budget 2012 Strategic 

Sourcing Memorandum

Page 49 GAO-17-164 Federal Strategic Sourcing Initiatives

Table 8: Key Provisions from the Office of Management and Budget 2012 Strategic Sourcing Memorandum

Leadership Council • identify at least five products and/or services for which new government-wide acquisition vehicles 

or management approaches should be developed and made mandatory, to the maximum extent 

practicable, for the Leadership Council agencies;

• for these identified commodities, provide supporting spend analysis, estimate savings 

opportunities, and define metrics for tracking progress;

• develop transition strategies to the new solutions;

• identify agencies to serve as “executive agents” to lead the development of these new solutions;

• propose plans and management strategies to maximize the use of each strategic sourcing effort; 

and

• propose vendor management or other strategies to reduce the variability in the prices paid for 

similar goods and services, where the development of new government-wide vehicles may not be 

immediately feasible.

Additional Responsibilities of 

the General Services 

Administration

• in consultation with the Leadership Council, implement at least five new government-wide 

strategic sourcing solutions in fiscal years 2013 and 2014;

• increase the transparency of prices paid for common goods and services for use by agency 

officials in market research and negotiations; and

• promulgate requirements, regulations, and best practices.

Characteristics of Strategic 

Sourcing Acquisition Vehicles

• reflect input from a large number of potential agency users regarding demand for the goods and 

services being considered, the acquisition strategy (including contract pricing, delivery and other 

terms and conditions, and performance requirements), and the commodity management 

approach;

• ensure that the federal government gets credit for all sales, regardless of payment method, so 

that volume-based pricing discounts can be applied;

• include tiered pricing, or other appropriate strategies, to reduce prices as cumulative sales 

volume increases;

• require vendors to provide sufficient pricing, usage, and performance data to enable the 

government to improve commodity management practices on an ongoing basis; and

• are supported by a contract administration plan that demonstrates commitment by the executive 

agent to perform active commodity management and monitor vendor performance and pricing 

changes throughout the life of the contract.

Increasing Small Business 

Opportunities

• all proposed strategic sourcing agreements must baseline small business use under current 

strategies and set goals to meet or exceed that baseline participation.

Source: GAO summary of OMB’s December 2012 policy memorandum. I GAO-17-164

Appendix IV: Key Provisions from the Office 

of Management and Budget 2012 Strategic 

Sourcing Memorandum
Appendix V: Comments from the General 

Services Administration

Page 50 GAO-17-164 Federal Strategic Sourcing Initiatives

Appendix V: Comments from the General 

Services Administration
Appendix VI: Comments from the Library of 

Congress

Page 51 GAO-17-164 Federal Strategic Sourcing Initiatives

Appendix VI: Comments from the Library of 

Congress
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 52 GAO-17-164 Federal Strategic Sourcing Initiatives

Timothy J. DiNapoli, (202) 512-4841 or dinapolit@gao.gov

In addition to the individual named above, W. William Russell (Assistant 

Director), Emily Bond, Peter Haderlein, Kristine Hassinger, Julia Kennon, 

Angie Nichols-Friedman, Max Sawicky, Roxanna Sun, and Holly Williams 

made key contributions to this report.

Appendix VII: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100485)
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