The Air Force recently established a new purchasing unit not unlike Costco – where it buys bulk commodities and obtains better prices—that is expected to save up to $2.3 billion over the next five years.
The Air Force’s Enterprise Sourcing Group, launched in late October, will implement a new sourcing strategy to buy bulk commodities and services that are common to most Air Force bases. Air Force estimates reveal that a 15 percent savings will be realized by leveraging its purchasing power, standardizing requirements and eliminating redundant contracting efforts.
"We are creating efficiencies across the Air Force as a whole, which is a good thing for everybody," Mario J. Troncoso, the unit’s director, told Government Executive. "Centrally procuring gives us good control. We can do continuous improvement cycles and relook at these things while at the same time being transparent to taxpayers and our government."
The Enterprise Sourcing Group will be centrally located at Wright-Patterson Air Force base in Ohio, which will house about 400 contracting officials including a business support group, three enterprise sourcing squadrons and six commodity councils that will manage the acquisition process. Air Force satellite offices will be set up in bases in Texas, Alabama, Florida and Nebraska.
Within the next five years, the Enterprise Sourcing Group will manage roughly half of U.S. Air Force-based expenditures of $10 billion for commodities and services.
"Our mission will impact the entire Air Force," Troncoso said. "What we’re doing is transformational in nature. As we implement strategic sourcing, we’re incorporating best practices from industry while also using some of the best individuals in the Air Force and industry to achieve efficiencies.”
In addition to enterprise-wide contract restructuring, the group will award contracts for the Air Force Center for Engineering and Environment, Air Force Civil Engineering Support Agency and Defense Technical Information Center, as well as providing support for Air Force medical contracting.
The Air Force restructuring is part of a larger Defense Department effort to reduce overhead spending by $100 billion over the next five years.
