Building the Enterprise - Booz Allen Hamilton

More documents

Recommendations

Info

STRATEGY 8ADOPT AN ENTERPRISEAPPROACH TO THE ACQUISITIONOF GOODS AND SERVICESHistorically, the federal governmenthas taken a decentralized, agencycentricapproach to buying goodsthat practically every organizationneeds. In short, the government hasnot taken full advantage of its collectivepurchasing power to get the bestdeal for the taxpayer.Here’s a graphic example: Buyingindividually, agencies spendmore than $500 million a year oncleaning products through nearly4,000 contracts with 1,200 differentvendors. One agency paid $32 for acase of paper towels, while anotherpaid $61 for the exact same product. 10Why shouldn’t every agency knowabout and take advantage of thelower price? This is what enterprisestrategic sourcing is all about—agenciesusing their collective buyingpower to drive down the prices theypay for common goods and services.Here, too, there is good news.Beginning with the Bush administrationand continuing under PresidentObama, the federal governmenthas begun to take a more strategicapproach to sourcing. However, ithas focused on consolidating acquisitionstrategies and contracts at thedepartment level, rather than acrossthe federal enterprise. We advocatethe latter. The government, underthe leadership of the Office of FederalProcurement Policy (OFPP)and GSA, should rapidly expand thescope of enterprise strategic sourcing,employing goal leaders, portfoliosand cross-cutting accountability.Already, GSA has implemented a10 Dan Tangherlini, “GSA to Launch 10Strategic Sourcing Initiatives,” GSA Blog,Jan. 10, 2013, http://gsablogs.gsa.gov/gsablog/2013/01/10/gsa-to-launch-10-strategic-sourcing-initiatives. Last accessedJul. 26, 2013.Federal Strategic Sourcing Initiative.It currently covers four categoriesof common products and services:office supplies, domestic parcel delivery,print management and wirelesstelecommunications services.Through the initiative, agencieshave saved more than $200 millionon office supplies since July 2010. Infiscal 2011, the domestic parcel deliveryservices program saved morethan $31 million over what agencieswere paying separately for the sameservices.GSA plans to add 10 strategicsourcing categories through 2015.To give this effort even more impetus,OMB last year created a leadershipcouncil to expand the initiativeand directed each agency to name astrategic sourcing official and sourceat least two new products a year in2013 and 2014. This council has beencharged with identifying five newcommodities and services a yearthrough fiscal 2014, along with executiveagents to develop the contracts.This is fine as far as it goes, butit is a cautious approach. To movestrategic sourcing from being a bestpractice to a mandate, the presidentshould designate the head of OFPPas the federal chief acquisition officer(CAO) with administrative authorityequivalent to the federal CIO.The federal CAO should develop andexecute a comprehensive enterpriseacquisition strategy. That strategyshould include goals for responsiblyexpanding enterprise-wide strategicsourcing for common goods and services,consolidating multiple-awardcontracts, making prices transparentand increasing share-in-savings contractingwhere appropriate. Achievingthese goals will drive down theprices and improve the quality of themyriad goods and services the governmentbuys. The EERB, in consultationwith the CAO, also shoulddesignate enterprise goal leaders foreach of these initiatives.The enterprise acquisition strategyshould greatly enhance the federalgovernment’s enormous buyingpower. It should consolidate the government’sdemand for commodities,such as cleaning products, to obtainmassive quantity discounts.For goods and services thataren’t amenable to strategic sourcing,government still can take anenterprise approach by making theresults of all transactions availableto all government buyers and sellers.“The government has not takenfull advantage of its collectivepurchasing power to get thebest deal for the taxpayer.”20 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON
And it’s not just pricing informationthat is valuable.For many years, agencies onlyhad access to other agencies’ procurementdata through the FederalProcurement Data System andUSASpending.gov. They can findonly high-level information, suchas total amounts spent on contracts,contract type, the name and locationof vendors and ordering officers.More granular information, such asthe labor costs embedded in a particularservice contract, is far moreuseful but difficult to find. Agenciesrarely share the details beyond whatis publicly available so that otherscan take advantage of their lessonslearned. Though some of the informationis proprietary, much can beshared.For example, GSA could create agovernment-wide collaboration siteidentifying upcoming solicitationsand existing agency blanket purchaseagreements so other agenciescould see whether an item or serviceSTRATEGY 9BUILD AN ENTERPRISECIVIL SERVICE SYSTEMThe proposals outlined thus far revolvearound a common theme: leadingand managing the whole of governmentas an integrated enterprisewith a cross-cutting strategy, managementinfrastructure and leadership.But none of these strategieswill be successful without also takingan enterprise approach to managinggovernment’s most importantresource—its people. This requiresthe federal civil service to be rebuilt,modernized and better integrated toconfront cross-agency program andpolicy priorities.Today’s federal civil service systemis obsolete. Its major componentswere last retooled more thanfour decades ago. The civil servicealready has been, or is in the processof being, procured by anotheragency.These improvements are movingin the right direction, but theycould be driven faster and morecomprehensively under the directionof an enterprise goal leader andteam charged with lifting the veil onprices, costs, successful negotiationstrategies and other procurementtechniques across all agencies.Strategic sourcing, expandeduse of multiple-award contracts,procurement and pricing transparencyall can be applied at the departmentor agency level for positiveeffect. But for tens of thousands ofcommonly purchased goods and services,they work best and save moremoney when they are applied acrossthe enterprise. Without a government-wideCAO and enterprise goalleaders to drive these strategies, theyare not likely to happen rapidly orcomprehensively. •today reflects the needs and characteristicsof the last century’s governmentwork and workforce, not thoserequired for today’s complex, interagencychallenges.A revitalized and revamped civilservice system should ensure thatfederal agencies can attract, motivateand retain skilled, energizedand engaged employees who can bedeployed where needed to supportthe enterprise without compromisingcore civil service principles thathave defined the American civil servicesince its inception—merit, politicalneutrality, veterans preference,due process, collective bargainingand non-discrimination. These valuesare inviolable and should guideand govern every federal agency.The system should be based onstate-of-the-art human capital practices,with a market-sensitive compensationsystem, recruiting andhiring practices in line with today’scareer patterns and a reward systemthat reinforces high performance.The current system, codified inTitle 5 of the U.S. Code, is federal inname only. As it has aged, agenciesboth large and small have brokenfrom its ranks, cutting their owndeals with Congress for personnelflexibilities to further their uniquemissions. The list is long, rangingfrom DOD and the Department ofHomeland Security—which havenot fully used the flexibilities theywere given—to the Internal RevenueService, the 17-agency intelligencecommunity and the agencies thatoversee the banking and financialservices industries. The result is abalkanized system of “haves”—agencieswhose human capital systemshave been exempted from generalcivil service rules—and “have-nots,”those still mired in laws and rulesfirst established in 1949. Employeesworking in “have-not” agencies cannottransfer to “have” agencies withoutcompeting, even at the seniorexecutive level.Significant changes are neededif we expect the federal governmentto act as an enterprise. This doesn’tmean a system that mandates onesize-fits-allrules or forces the “have”agencies back in the box. Rather, itmeans taking advantage of the lessonslearned by agencies that havebroken free from Title 5 to developa civil service system up to the challengesof 21st-century government.The Partnership for Public Serviceand Booz Allen Hamilton willrelease a detailed framework forthis new enterprise civil servicesystem later this year, but given itsimportance to our overall enterprisestrategy, its basic architecture andapproach are worth describing here.Upon adopting the core anchor-BUILDING THE ENTERPRISE 21
Page 1 and 2: BUILDING THETHE ENTERPRISENine Stra
Page 3 and 4: PREFACEWhen we launched this projec
Page 5 and 6: THE CASE FOR ENTERPRISEWhen Superst
Page 7 and 8: services. Further, applying an ente
Page 9 and 10: BUILDING THE ENTERPRISE 7
Page 11 and 12: STRATEGY 6Manage information techno
Page 13 and 14: “The strategic enterpriseperforma
Page 16 and 17: cross-agency goal leaders have mana
Page 18 and 19: For example, it is easy to document
Page 20 and 21: agencies. Such enterprise IT servic
Page 24 and 25: ing principles, we would constructa
Page 27 and 28: AGENCY AND SUBAGENCY NAME OF PROGRA
Page 29 and 30: APPENDIX BCONTRIBUTORSAdmiral Thad
Page 32: 1100 New York Avenue NWSuite 200 Ea

Building the Enterprise - Booz Allen Hamilton

Create successful ePaper yourself

Delete template?

Save as template?