A General Services Administration initiative estimated to save half a billion dollars in five years now has its wheels in motion.
As budget constraints increase, GSA is adjusting its business model to accommodate the demands of its own mission and other agencies. This year, GSA has already begun revamping its Federal Acquisition Service business model for GSA’s supply business.
The model will use GSA’s vendor capabilities to directly support GSA’s customers and simplify federal acquisition, Tom Sharpe, commissioner of FAS, said in a blog post.
Previously, GSA operated a wholesale supply business that was dependent on warehouse distribution centers. It also manages several retail stores that stocked inventory from those warehouses. GSA’s customers range from U.S. citizens, to customers in Europe, the Middle East, Africa and around the Pacific Rim.
As the agency transitions out of its current system, GSA will work with commercial partners to ship directly to customers and retail stores, as opposed to its own distribution centers.
This decision reflects an overall movement for government to reduce its physical footprint. In the same way GSA is phasing out of the warehouse business, many agencies are consolidating data and storage centers. GSA plans to provide direct delivery of inventory to its customers by working with vendors that are experts in office supplies, tools and other common use items, according to Sharpe’s blog post.
“This is the right time to implement these changes to GSA’s supply program and they are one part of a new vision we are outlining for FAS over the next year,” Sharpe said. “By working closely with our vendors, we have an opportunity to support our federal partners with the value and services they need, through a system that is suited to today’s marketplace.”
This undertaking will rely heavily on the Federal Strategic Sourcing Initiative, a governmentwide effort to save money.
Sharpe said this initiative is part of a more long-term solution for how GSA can deliver services and maximize savings.
“That concept of focused federal spending to leverage volume discounts will be duplicated for a variety of different products,” he said. “As those programs roll out, they will become part of the long-term solution for how GSA delivers the most efficient and effective services to the federal government.”