Johnson Says GSA Provides Best Value for Government Purchasing
As prepared for delivery
U.S. General Services Administration
National Institute of Governmental Purchasing Annual Conference and Expo
Prince Georges County, MD
August 29, 2011
Thank you for that generous introduction. And, thank you for inviting me to speak today; I’m delighted to be here.
I’ve spent much of my career working in and on the issues around public procurement and government efficiency, so speaking to you all today feels like talking to family; you get it.
I also want to say that while GSA outfits the federal government – our largest real estate client is the judiciary, and our largest acquisition customer is the Department of Defense – we are also keenly aware of our responsibilities to our state and local partners, and we hold your business dear. As I understand it, we do about $800 million in procurements with you – that is not chump change! Thank you for your business.
I also want to acknowledge how important I think conferences like this are. The community of government purchasing professionals needs to come together in new and stronger ways, and I can’t stress how important these opportunities are, especially in this time of change. Strategic portfolio management, collective voice, best practices, and the affinity groups and networks available to you when you meet this way are invaluable in your line of work.
I don’t need to tell this audience that our government – our country – is going through an extraordinary time filled with tectonic changes and deep uncertainty.
I’ve been giving speeches about change for – what – 20 years now? But while it was driving up to the house, coming up the walk, climbing the steps, now it’s opening the screen door and walking in the house!
My 22-year-old son, just back from college, keeps saying, “You know, Mom, the world has really changed since I was in high school.” That was only four years ago, but you know, he’s right! And if a 20-something is finding it fast, it is significant.
The pace of change is faster than ever before, and the nation and government at all levels need to set our sights on the future.
Looming largest on everyone’s radar, of course, is the budget.
We have all seen budget debates come and go. But this time is different. In the past, budgets were tightened, priorities were shifted; funds were reallocated. Today, the constraints are wholesale. GSA’s major construction and alterations appropriation, for example, was cut 90 percent this year. That’s nine-zero. In fiscal year 2010, states had to close budget gaps of $124 billion, and are projected to have another $101 billion in gaps to close next year. Programs across the entire government are under new and direct scrutiny. Operational efficiency is no longer a nice-to-have. It’s essential; it’s imperative. Where in the past, government may have cut out carbs or moved to the low-fat ice cream, today we’re getting our stomach stapled.
At the same time, the needs of our citizens and the demands on our customer agencies have grown. Increasingly, agencies and government need to do more with less, and the pressures they have always faced aren’t necessarily going away.
As we all learned last week after experiencing both an earthquake and a hurricane, disasters don’t stop because of shrunken budgets. Those who wish us harm don’t sit back to give us breathing room. Law enforcement, citizen protection, and essential services must continue. At every turn, wherever Americans are hurting, wherever homes and livelihoods have been destroyed, governments large and small – state, local, federal – stand up and respond.
Government must still function regardless of the fiscal and budgetary environment, and public servants – from firefighters to warfighters – still need the best tools and supplies available.
That’s where we – government purchasing professionals – can flex our muscles and deliver real value for our communities and for our country.
Why us? Because we’re the expert shoppers. We’re the folks you want on your team when you’re making your purchases, when the budgets are tight and there’s no room for error. We can cut costs, drive bargains, and deliver cast-iron value. It’s what we do, and we do it well.
The procurement community is like the keel of a boat. Under the water, not flashy, but essential. We keep the boat on course, level, and moving through calm waters – or stormy seas.
Of course, being good at something can have unintended consequences, and it’s at the moment of greatest change when the steady hand starts to get the most attention. It makes you stand taller and stand out. It makes others see you in a new way. And we’re living that at GSA. I have referred to this moment for GSA as the dog that finally caught the bus.
We have always been the folks that agencies call when their air conditioning breaks or they need to re-up their vehicle lease. But two months ago, my phone rang. It was the head of a major agency asking to come visit us and get our advice. I was surprised: “You want to come here?” But then it rang again. And again. Across the board and across the government, agencies are coming to us, sitting with us in a conference room, opening up about their predicament and asking for our expertise.
They’re telling us that they want radically different asset management help, judo improvements in efficiency, and a full view of their options. They need help from workspaces to IT to consulting services. They need us in ways never experienced before, and, as is so often the case, state and local procurement officials are feeling the heat most directly.
I’m here to tell you that we’re here to help.
GSA partners with state and local governments in several different ways and through a variety of channels. One example is our Computers for Learning Program. GSA is responsible for disposing of 10,000 computers – every week. But they’re often only 3 years old, and still have a long useable life ahead of them. That’s why we work with schools across the country to match our nation’s classrooms with the federal government’s gently used information technology hardware. It makes sense for the government; it makes sense for the schools; and it brings a world of knowledge to our children’s classrooms.
Another example is our Wildland Fire Program. Through this arrangement, GSA leverages the federal spend to bring firefighting equipment to wildfires – fast. During the California lightning fire of 2008, when more than a million acres of wilderness was burning, GSA staff worked around the clock to distribute more than $20 million in supplies to federal, state, and local fire departments. And they did it swiftly, understanding that when fire threatens people and property, there’s no time to waste. By bringing high quality goods to the front at better-than-market price under tight deadline, GSA’s Wildland Fire Program has proven its value time and again.
And on a broader level, GSA also helps state and local governments by providing access to a selection of our schedules – the prenegotiated catalog of supplies and services that we offer to federal agencies. By leveraging our vast river of consumption, totaling about $95 billion a year, GSA’s purchasing power passes dramatic savings on to our customers. It’s like CostCo on steroids.
Currently available to state and local governments are Schedule 70 and Schedule 84 – for IT and for law enforcement. Additionally, a disaster recovery program lets governments purchase supplies off of the rest of the schedules. Through these cooperative purchasing arrangements, customers tap into the buying power of the federal government, and realize serious savings.
Between 2002 and 2007, Colorado and Nevada agencies saved more than $11.5 million through the disaster preparedness schedule.
Kansas officials purchased 50 new police cars at an average cost savings of $3,000 each, saving $150,000 as they update their police fleet.
And California officials purchased five infrared camera systems for $900,000 – a savings of $430,000 over retail price.
And the stories continue from communities across the country. Since 2005, state and local government purchases have increased an average of 34 percent on these schedules, and our disaster recovery business has seen even greater gains.
But while millions of dollars have already been saved, there is enormous potential for yet more savings, and we’re eager to explore expanding access to all of GSA’s schedules for every level government. To do so would increase the number of products and services available to state and local governments by tenfold. It would reduce redundancy, eliminate procurement confusion, streamline acquisitions, increase coordination among emergency responders, and drive costs even lower for everyone – the vendors, the government, the taxpayer.
In an era of tightened budgets, governments have to be creative as they explore new, effective purchasing solutions. We can no longer be satisfied with the status quo, and we will need to partner ever more effectively both horizontally – between agencies – and vertically – with industry up and down the supply chain – to deliver best value.
A good example of this is the government’s move toward cloud-based IT solutions.
Every year, the federal government spends about $80 billion on IT, yet a gap remains between our IT capacity and that of the private sector.
President Barack Obama has challenged federal agencies across government to close this gap by identifying and migrating three IT capabilities to the cloud within 18 months.
Already, 15 agencies have identified nearly 1 million email boxes across 100 email systems that are going to move to the cloud. GSA is one of those agencies. In June, GSA switched to Google’s cloud-based platform, a move that we expect to save us more than $15 million in the next five years.
Since we’ve transitioned, we’ve seen the real advantages of the cloud – budgetary boosts, new productivity ,and collaboration capabilities – and we’re uncovering some tremendous lessons. In the process of preparing for Hurricane Irene, our new capabilities increased our efficiency and communications enormously.
But what we’ve also seen is that cloud options can help government at all levels, and that, in many respects, states are leading the pack.
Why? Because states understand the value proposition of cloud-based systems. They know that a dispersed government is a secure government, better able to handle disasters and shutdowns. They understand the economic sense of consolidation and shared resources across departments, and they know all too well the need for seamless interoperability.
Last week, I was in Vermont attending a cloud computing round-table with the state’s chief information officers. It was fascinating. I heard about their cloud systems and the challenges states face in rationalizing and consolidating their IT infrastructure.
To help face down those challenges, GSA is offering a line of prescreened, prenegotiated storage, computing, and Web hosting services available through our IT Schedule 70. These offerings provide rapid, elastic, and customizable scaling of services that can be adjusted based on need and use. They drive down costs while boosting productivity; they let government move past the treading water stage of investing in current infrastructure and launch us into the next chapter. They’re good value; they’re the way of the future; and they’re essential to a 21st century government.
So we offer several avenues, and we’ve seen a significant uptick in interest and use of the options. But we know – we feel it in our gut – that you are under tremendous strain and that using federal resources can often appear daunting and impenetrable. We want to fix that.
That’s why we have been aggressive in our outreach, and I urge you to contact your regional GSA service representatives and get to know them. We’re not just a Washington agency; we’re a national – and international – agency. I’m the first to say that the real work gets done in the field, and our regional staff are eager to visit you, demonstrate our online ordering, advise you on the best approach, and stick with you through the process. We’re here to facilitate your wins and complete the handshake.
Those of us in the field of public procurement are committed to delivering best value solutions to agencies so that they can focus on their core missions instead of operations; our job is to carry the operations load.
In this time of huge change, knee-buckling uncertainty, and massive constraints, our role as acquisition professionals is to be the anchor and the steady hand for the rest of government.
We must collaborate ever closer, be ever more strategic, and pull every lever we can to bring the best tools, goods, and services to the front lines.
We must do all we can to ensure that our veterans are cared for, our children are educated, and our nation is protected.
We must do all we can to help government at all levels – from schools and fire departments to cities to counties to states – deliver services and assistance to citizens.
And we must do all we can to grow our economy, support new industries and technologies, and ensure that our next century is another great American century.
Thank you all, and enjoy the rest of the conference.