In November, 2005 the U.S. Government established the Federal Strategic Sourcing Initiative (FSSI) in an effort to rationalize spending for goods and services. According to the General Services Administration (GSA), the program is intended to improve the acquisition process, increase participation among socio-economic groups and, ultimately, to lower total costs. The program will allow various federal agencies to aggregate their requirements, coordinate expertise, minimize redundancies and maximize volume purchasing power.

GSA (which will administer the program in partnership with the Office of Management and Budget (OMB)) defines strategic sourcing as an analytical process that well compel agencies to clearly define mission requirements, align acquisition with those requirements, manage vendor performance, encourage the participation of vendors who fall into defined-socio-economic categories, increase achievement of “green” goals and improve vendor access to business opportunities.

GSA emphasizes that FSSI is a “best practices” program that it intended to result in reduced price per unit, improved operational efficiency and expanded access to the government contracts. To achieve these goals, quality will be balanced with price. Vendors selected to participate will be expected to demonstrate innovation, support of customer demand management, elimination of waste and reduction of overall costs. FSSI, according to GSA, is not simply leveraged buying, bundling of purchases, competitive sourcing or placing price over value.

GSA and OMB have identified 10 new FSSI programs. In our industry, (known to the Government as “JanSan,” short for janitorial and sanitation), FSSI will apply to vendors selling cleaning, maintenance and repair supplies, hardware or providing janitorial services.

The fear among industry experts is that vendors who are not on GSA’s approved list will be locked out of doing business with the federal government. The result could be a drastic reduction in the number of JanSan vendors with GSA contracts. This could lead to business failures, reduced operating revenue, reduced profit margins and widespread loss of jobs.

In an effort to combat what is perceived as a threat to the industry, several companies and groups have sponsored forums to take their concerns up with their elected representatives and GSA. Since these FSSI programs are still in their formative stages, these spokespeople hope to avoid what they perceive as potentially catastrophic effects of well-intentioned but badly-conceived government action. More news on the progress of FSSI is certain to follow.

Perry Heidecker is senior counsel for Milman Labuda Law Group PLLC, Lake Success, N.Y. The firm is a full-service Employment Law practice focused on counseling, preventive advice and training, policy and procedure design, representation before administrative agencies, litigation, and appeals.