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Better cost data can mean bigger cost savings

Dec. 4, 2013 - 06:00AM   |  
By NICOLE BLAKE JOHNSON   |   Comments
Government Mobility Conference
Mark Day, acting deputy assistant commissioner for GSA's Office of Integrated Technology Service, speaks at the Government IT Forum in Washington. (Colin Kelly/Staff) ()

Federal agencies don’t have the best record of tracking and sharing how much they pay for products and services.

Cost data, when it is captured, can vary widely among departments and even bureaus and sub-agencies within the same department that are buying the same things. But the General Services Administration, at least among its customer base, is hoping to change that.

“One of the biggest issues we have in FAS [the Federal Acquisition Service] is trying to empower customers with the right data to make [the] right decision,” said Mark Day, acting deputy assistant commissioner for GSA’s Office of Integrated Technology Service, at the Government IT Forum in Washington.

Part of that is ensuring customers know how much they are paying for the things they buy, Day said: “Do we know what we pay for a labor hour for an Oracle programmer? Do we know what we pay for a router of a certain size?”

Day said his office, which resides within FAS, has begun mining an array of cost data it has amassed, including spending data on GSA’s Governmentwide Acquisition Contracts. GSA data supports the notion that competition drives down costs, he said.

“Can you put a number on it? Well, we can today,” he said.

GSA compared prices paid versus the contract base price when there was only one bidder compared with multiple bidders, up to about 10.

In cases where there was only one bidder, the pricing discount was less than one half of 1 percent, Day said. When there were two or more bidders, the discount was 18 percent.

And contrary to popular belief, Day said bidders know what companies are teaming on a contract bid and generally whether there are multiple companies bidding.

GSA is also mining its travel data to identify potential areas of savings, Day said. There are agencies that routinely choose not to use the lowest prices, while there are others that do.

“Big data simply gives us the data to make better decisions,” he said.

One of the issues, however, is that agencies need to start with the end in mind and figure out what type of data is needed to develop solid businesses cases, said Paul Brubaker, director of planning and performance management at the Defense Department.

Brubaker said government as a whole lacks strong business cases, in the absence of good cost data.

“How do you know what kind of savings you’re producing if you don’t have any underlying cost data?” Brubaker said, while highlighting the challenges within his own department.

DoD doesn’t know what it is costs to do the budget processes, human resource processes or core business processes, he said.

“We like to pretend like we’re making data driven decisions for the department,” he said. The grim reality is if the data doesn’t exists, the status quo will continue.

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