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Government's 'Piecemeal' Procurement of IT Services Squanders Billions, GAO Report Claims

The U.S. government is leaving billions of dollars on the table due to poorly managed and duplicative IT outsourcing deals, according to a recent report by the Government Accountability Office.

The U.S. government spent $30bn on IT services in 2013, yet the majority of that investment reportedly is not strategically managed. The GAO studied IT services outsourcing at three military branches within the Department of Defense along with the Department of Homeland Security and the National Aeronautics and Space Administration, which together accounted for more than half of reported federal third-party IT services spending in 2013.

Leading companies approach IT outsourcing strategically, taking an aggregate approach to managing IT services spending rather than making such purchases on a piecemeal basis. By doing so, they achieve four percent to 15 percent savings on these services annually, according to the GAO. While this report noted that efforts by these federal departments to better manage their IT outsourcing has improved in recent years, with each agency designating officials and creating offices to identify and implement strategic sourcing opportunities, it found that most of these agencies’ IT spending “continues to be obligated through hundreds of potentially duplicative contracts that diminish the government's buying power.”

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The U.S. government spent $30bn on IT services in 2013, yet the majority of that investment reportedly is not strategically managed. The GAO studied IT services outsourcing at three military branches within the Department of Defense along with the Department of Homeland Security and the National Aeronautics and Space Administration, which together accounted for more than half of reported federal third-party IT services spending in 2013.

Leading companies approach IT outsourcing strategically, taking an aggregate approach to managing IT services spending rather than making such purchases on a piecemeal basis. By doing so, they achieve four percent to 15 percent savings on these services annually, according to the GAO. While this report noted that efforts by these federal departments to better manage their IT outsourcing has improved in recent years, with each agency designating officials and creating offices to identify and implement strategic sourcing opportunities, it found that most of these agencies’ IT spending “continues to be obligated through hundreds of potentially duplicative contracts that diminish the government's buying power.”

Read Full Article