What Is Going On With DHS in Strategic Sourcing? - Essay Sample

Introduction

Formentini, Ellram, Boem, and Da Re (2018) define strategic sourcing as the supply chain management approach used to formalize information gathering and use to ensure that an organization leverages its consolidated purchasing power to determine optimal value within a competitive marketplace. This overarching definition is evident in the manner that strategic sourcing occurs at the Department of Homeland Security (DHS). According to the DHS Chief Procurement Officer Nick Nayak, strategic sourcing at the department involves purchasing products and services at the lowest cost to protect taxpayers while fulfilling public policy objectives. These objectives include ensuring that the taxpayer gets a good deal, leveraging on the buying power, eliminating duplication, and reducing waste.

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The DHS has a life cycle for its strategic sourcing. Each strategic sourcing program begins by either detailed spend analysis or from a recommendation from one of DHS's stakeholders. The aim must be to save the government money, to increase standardization, and make procurement more efficient. This initial assessment is then analyzed to check if it makes fiscal sense. Next is the business case analysis process. It is a detailed analysis focusing on spending, forecast. At this stage subject matter experts, acquisition professionals are involved in giving detail through an integrated team. Coordination and outreach with the industry. Next, approval by CPO. Next to procurements acquisition strategy phase (Government Contracting Weekly, 2018).

The volume of products and services sourced by DHS requires proper processes to ensure efficiency. Currently, the DHS contracts for about $12 billion worth of goods and services annually. Of this, 22-23 percent flow through strategically sourced contracts. DHS's strategically sourced contracts are part of a big contract vehicle for the government. Strategic sourcing at the department is modeled to cater for all levels of business that the government seeks to engage. For instance, while the government-wide goal for small businesses is about 23%, at DHS, it is between 31 and 33 percent annually. There is already a success in this approach. For the first time in about a decade, DHS managed 31 percent. In addition to this, within DHS's suite of strategically sourced contracts, about 35 percent flow to small businesses is achievable. This achievement then implies that strategic sourcing is not only good for the interest of the taxpayer but also a small business (Government Contracting Weekly, 2018).

Conclusion

Strategic sourcing is essential as it enables for the realization of a balance of companies that the government is dealing with as all deliver innovative solutions. As such, DHS is keen to ensure that for every strategic product sourcing vehicle, acquisition professionals utilize it to acquire products and services. There is flexibility, however, with regards to meeting the ultimate objective. Exceptions such as national defense, lower prices elsewhere, and authorized by policy exist. It is noteworthy that, strategic sourcing has nothing to do with cheap. However, the technical aspects, price comparability, and quality remain primary considerations. The essence is to identify win-win solutions for both the government and the private sector (Government Contracting Weekly, 2018).

References

Formentini, M., Ellram, L. M., Boem, M., & Da Re, G. (2018). Finding true north: Design and implementation of a strategic sourcing framework. Industrial Marketing Management.

Government Contracting Weekly. (2018). Strategic Sourcing in DHS: Ep 58 Government Contracting Weekly. Retrieved from https://www.youtube.com/watch?v=VGpYV0WGnAE