IG: BOP needs better approach to save money on goods and services

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The Bureau of Prisons has not gone far enough in cutting the costs of goods and services obtained through vendor contracts nor has it established a formal strategic sourcing program to help find potential savings, according to Justice Department auditors.

A newly-released report by the department office of inspector general (pdf) largely focuses on the period from October 1, 2010 through March 31, 2013 when the BOP awarded nearly $9 billion in contracts for food, clothing, health care, social rehabilitation, and other goods and services for the custody and care of its roughly 175,000 federal prisoners.

Over the past decade, the federal government has directed its agencies to improve buying power and find more cost savings through strategic sourcing initiatives that amalgamate small buys into larger ones with the potential for extracting vendor discounts. The General Services Administration also created the Federal Strategic Sourcing Initiative, which established contracts that all agencies can use for commonly purchased goods and services.

The report finds the BOP has established national contracts and blanket purchase agreements, encourages its 93 local procurement offices to use them and also participates in other federal cost-savings initiatives.

But the bureau doesn't mandate that these measures be used by its local offices and participation in such initiatives was uneven at best. For example, while all 93 offices surveyed exclusively used the national contract to purchase urine test cups, only 14 offices used a GSA program to acquire natural gas.

Also, the BOP neither tracked participation in national contracts and other programs nor did it document any cost savings gained from them. While the BOP indicated that participation in such initiatives resulted in $1.3 million in savings during the audited time period, the report said "it is unclear how this amount was calculated."

The report recommends that the bureau implement a strategic sourcing program to comprehensively analyze its spending so it can identify products and services that have the best potential for cost savings. The BOP should also determine the best benchmark prices for these commodities and whether they can be purchased at lower cost through existing contracts before starting new ones. The bureau also needs to collect data and report savings using appropriate "cost per" units of measurement.

Plus, the report recommends that BOP spell out to its procurement staff when it can use existing contracts and initiatives and implement an internal review process to make sure staff are using a strategic sourcing approach.

For more:
- download the report, 14-147 (.pdf)

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