Labor Day

Quick Start for:
State Purchasing

About Strategic Sourcing

Strategic Sourcing employs sound and tested business methodologies to establish enterprise contracts that result in:

  1. increased quality and service;
  2. reduced total cost of goods and services;
  3. improved relationships with contracted vendors;
  4. simplification of the requisition-through-payment process.

Progress-to-date

Spearheaded by Comptroller Susan Combs, the Strategic Sourcing initiative began as a collaborative initiative between state purchasing entities to apply industry best practices to procurement by Texas state government.

Five purchasing categories were selected to represent the first wave of the Comptroller of Public Accounts' (CPA) strategic sourcing efforts. These first categories were highly successful, creating millions of dollars in savings while streamlining purchasing processes.

To expand on that initial success, CPA officially formed the Strategic Sourcing Division. The new division’s role is designed to implement recommendations published in the Legislative Budget Board (LBB) 2007 Texas State Government Effectiveness and Efficiency report including:

  1. improving the State’s procurement practices to maximize the State’s buying power; and
  2. implementing strategic sourcing initiatives to ensure best value procurement.

CPA began the spend analysis process by reviewing fiscal 2007 accounts payable data to isolate purchased goods and services. Total Spend for Texas in fiscal 2007 totaled $99 billion. Of this, $21 billion was for the purchase of addressable goods and services. Key findings of initial analysis showed that although the Comptroller’s office administered $1.2 billion of these goods and services purchased, the vast majority of spending had still not been fully leveraged. These are the areas that the Strategic Sourcing Division is focusing on to find additional efficiencies and cost savings.

In fiscal 2010, CPA conducted an even more comprehensive analysis of statewide procurement data. In total, $134 billion of fiscal 2009 state expenditure was reviewed, of which $3.5 billion was identified as addressable goods and services. The Strategic Sourcing Division has continued to refine this analysis and prioritize the portions of this expenditure with the most impact. This has resulted in realized saving of more than $123 million.

Our Analytical Approach

STRATEGIC SOURCING PROCESS FLOW
1. Identify the Opportunity 2. Talk to Our Customers 3. Talk to the
Vendors
4. Award and
Monitor the
Contract
  • Gather and consolidate spending data from multiple internal sources
  • Interview key stakeholders
  • Draft, revise and issue request for proposal
  • Conduct a competitive procurement (BAFOs, oral presentations, multiple rounds of negotiations, etc.)
  • Identify top spend categories and suppliers
  • Validate previous research
  • Conduct pre-proposal conference
  • Award contract
  • Conduct preliminary benchmarking
  • Conduct pre-solicitation conference with our customers
  • Answer written questions submitted by vendors
  • Monitor contract to ensure compliance with terms and conditions
  • Talk with other states and subject matter experts about challenges and keys to success
  • Create workgroup from cross-secion of representative agencies
  • Revise request for proposal based on feedback from vendor community
  • Conduct benchmarking on an ongoing basis
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