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U.S. Environmental Protection Agency	14-P-0338
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At a Glance
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August 26, 2014
Why We Did This Review
The federal government
spends approximately
$500 billion on goods and
services each year to support
its mission. Given the
increasing fiscal pressures
facing the United States, there
has been a renewed focus on
maximizing efficiencies in the
procurement process to
achieve cost savings. One such
initiative is the use of strategic
sourcing as outlined in the
Federal Strategic Sourcing
Initiative (FSSI).
The purpose of this review was
to determine whether the
U.S. Environmental Protection
Agency's (EPA's) strategic
sourcing program is gaining
efficiencies from existing
federal initiatives under the
FSSI mandate and the EPA
was identifying and taking
advantage of strategic sourcing
opportunities outside of FSSI.
This report addresses the
following EPA goal or
cross-agency strategy:
• Embracing EPA as a high-
performing organization.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20140826-14-P-0338.pdf
Increased Emphasis on Strategic Sourcing Can
Resuit in Substantial Cost Savings for EPA
The EPA could save
$30 to $60 million
annually by fully
implementing its
strategic sourcing
program.
What We Found
Although the Office of Management and Budget issued
a policy memorandum on strategic sourcing in 2005
expressing the need for agencies to leverage strategic
sourcing to the maximum extent possible, the EPA has
been slow in implementing such efforts. Crucial
aspects, such as conducting spend analyses and
developing controls to ensure maximum agency
participation, were either not developed or conducted timely. The Office of
Management and Budget also encouraged agencies to participate in
governmentwide solutions, known as FSSI, and advised agencies to consider
those being offered for commonly procured commodities first when contemplating
acquisitions. Of the four solutions offered (print management, wireless services,
office supplies and domestic delivery), the EPA only participated in the office
supplies and domestic delivery solutions. The agency has been slow in
implementing strategic sourcing due to a lack of commitment in the initial stages
of the initiative and by proceeding cautiously as experience was gained. As a
result, the EPA has been missing out in cost saving opportunities and improved
efficiencies in its procurement processes.
Recommendations and Planned Corrective Actions
We recommend that the EPA develop a plan of action to strategically source
wireless services and print management. If the EPA's plan is to source these
commodities internally because it is not practicable under the FSSI initiative, we
recommend that a price comparison analysis be performed to ensure the best
possible pricing is negotiated. We also recommend that the EPA develop and
implement policies and procedures to ensure that controls are in place so that all
strategically sourced vehicles are utilized unless a valid exception is approved.
The EPA agreed with our recommendations and provided a corrective action plan
with dates for each recommendation.
Noteworthy Achievements
The EPA conducted a study of the agency's acquisition function to realize cost
savings and increase the efficiency and effectiveness of the acquisition function
within the EPA. The study, known as the Centers of Expertise in Contracting,
details the challenges facing the EPA. The report identifies the value of strategic
sourcing and estimates that, with a fully staffed strategic sourcing office, it can
achieve potential cost savings of $30 to $60 million on an annual basis. The
report provides recommendations on how to achieve a more efficient and effective
acquisition process, and the EPA is currently evaluating these recommendations.

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