Learn about Strategic Sourcing

The DoD-Wide Strategic Sourcing Program promotes an organized, systematic and collaborative approach to sourcing Supplies & Equipment (S&E;) and Services. Collaboration improves the transparency of requirements across the Defense Enterprise, reduces the proliferation of redundant business arrangements for acquiring similar commodities and increases alternative business arrangements that may be better suited to particular needs. However, strategic sourcing is not just about reducing the numbers of contracts or reallocating spend; it’s about operating collaboratively, with increased efficiency and effectiveness, to deliver quality S&E; and Services for our warfighters and taxpayers.

DoD Strategic Sourcing Framework:  The Strategic Sourcing Framework illustrated below, is a FAR-based model centered on a basic principal of making informed business decisions resulting in effective and efficient changes to both acquisition behaviors and processes.

strategic_sourcing_framework

Key doctrines of strategic sourcing are noted below:

Strategic Sourcing is an analytical process

  • It is data-driven and relies on facts for sourcing decisions;
  • It relies on internal customer requirements and external market intelligence to develop strategies; and
  • It considers all the angles – from customer needs and market conditions to financial and socio-economic objectives.

Strategic Sourcing is a collaborative process

  • It is a cross-functional, integrative approach toward engaging and synergizing stakeholders from multiple perspectives, and
  • It derives the most appropriate level for sourcing from a coordinated, “big picture” view of the spend environment.

Strategic Sourcing controls cost growth

  • It increases acquisition productivity growth through Will Cost/Should Cost management in both contract negotiation and contract administration;
  • It eliminates inconsistent approaches to or redundant business arrangements of acquiring similar S&E; and Services;
  • It leverages buying power to obtain better prices; and
  • More than just unit price reductions, TCO savings can be achieved through reduced volume and consumption (demand management), improved process efficiencies, and better supplier management.

Strategic Sourcing improves mission delivery

  • It improves the quality and value of acquired S&E; and Services that directly or indirectly support mission-focused programs and activities; and
  • It increases the efficiency of the acquisition process.

Strategic Sourcing promotes effective competition

  • It fosters competitive acquisition strategies;
  • It removes obstacles of ineffective competition; and
  • It facilitates a dynamic small business role in the defense marketplace.

Strategic Sourcing hones tradecraft in acquisition

  • It provides an enterprise perspective for the acquisition workforce, building deep functional skills that facilitate specialization in specific portfolios, industries, and marketplaces;
  • It defines requirements with a greater visibility, understanding and awareness of demands across the entire enterprise and throughout supporting supply chains; and
  • It demonstrates that market research is more than just the mechanism that DoD uses to solicit offers by requiring an understanding of industry capabilities and a determination of appropriate pricing within markets.

In collaboration with the Defense Acquisition University (DAU), two Continuous Learning Modules (CLMs) focused on strategic sourcing and spend analysis have been created. DAU is also incorporating the tenets of strategic sourcing into other curriculum. Both CON 100 and CON 353 have been updated to reflect the emphasis senior leadership places on this initiative.

This page last updated: December 11, 2012
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