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FCW : May 15, 2016
I led the United Kingdom’s Government Procurement Ser- vice (GPS), the U.K. equivalent to the U.S. General Services Administration, during the world financial crisis and the con- sequent recession and budget constraints. GPS was under pressure to deliver significant savings, improve efficiency and get more output and value from the government’s spending on common goods and services. That period’s year-on-year reductions in the number of civil servants and budget cuts were compounded by challeng- ing socioeconomic conditions, such as a growing demand for health care, an aging popula- tion and an increased need for housing and social services. We needed big savings in the short term, and we needed to set the stage for long-term procurement transformation to achieve greater efficiency and better outcomes further on. We began by identifying opportunities to aggregate and centrally coordinate procure- ment, much as Office of Federal Procurement Policy Admin- istrator Anne Rung and GSA’s Federal Acquisition Service are doing to encourage the U.S. government to “buy as one” under category management. At the heart of the U.K. effort was an analysis of spending, which we used to help us make the best operational decisions. We also used it to develop strategic plans in key spending categories for leveraging government demand and interacting more effectively with suppliers. The analytics provided the launching pad for a procurement transformation that saved millions of U.K. pounds and made those funds available to agencies for mission accomplishment. At base, we determined how much we were spending with which companies, on which contracts, in which depart- ments, for what and in which categories so we could begin to get our spending under management, aggregate it where appropriate and leverage it for better outcomes, prices, terms, conditions, quality and performance. Although that seems intuitive and not a very impressive undertaking, it was the first time the U.K. had attempted to fully understand the size and nature of its procurement spending. Until 2010, when we were able to calculate that cen- tral agencies (including local governments and the National Health Service) bought goods and services totaling about $340 billion in U.S. dollars, we had never produced a fully accurate and reliable total for the government’s third-party spending. Trends vs. detail Since I have been in the United States, I’ve discovered that U.S. agencies often lack spending data, too. Without it, many rely on the Federal Procurement Data System, which wasn’t built for the job. FPDS contains data on contract obligations, not actual outlays. Obligations occur when agencies legally commit to spend money via contracts, purchase orders, hiring and the like. But how much and what is actually supplied often change after the obligations are made and before purchases are final. FPDS doesn’t record those changes. FPDS cannot provide agencies with a full range of critical information, such as exactly what they are spending, their top suppliers, their unit pricing for goods or services within To buy better, government must know what it spends BY DAVID SHIELDS Agencies can put more money toward their missions by analyzing accounts-payable data. The former leader of the U.K.’s Government Procurement Service explains how. Our lessons have been hard-won, but they have saved hundreds of millions of pounds that were used to deliver better outcomes for citizens. AcquisitionMatters May 15, 2016 FCW.COM 27 0515fcw_027-028.indd 27 4/15/16 12:41 PM
April 30, 2016
May 30, 2016