In the updated UG, strategic sourcing has been identified as a viable method to achieve cost savings and efficiency while also meeting competitive procurement requirements (200.318e).

Strategic sourcing leverages collective buying power to achieve the best possible terms and prices. This method emphasizes supplier collaboration, long-term relationships, and continuous improvement to drive cost efficiencies, quality enhancements, and innovation.

Organizations can use strategic sourcing to reduce procurement volume so long as the principles of competition and transparency are met.

• Competition: The strategic sourcing process must comply with UG procurement standards for fair and open competition.
• Cost and Price Analysis: A cost or price analysis must be performed to determine that the prices obtained through strategic sourcing are reasonable.
• Documentation: Proper documentation of the procurement process, including the rationale for selecting strategic sourcing and the competitive steps taken, must be maintained.

So what should you do?

Start by conducting a thorough analysis of your spending patterns to identify common categories of goods and services purchased with federal funds. From there, narrow down the best opportunities for procurement efficiency and cost savings and establish a strategic sourcing game plan. This can be done by sourcing categories directly with suppliers or leveraging group purchasing cooperatives - many of which are open to nonprofit organizations.

How Vendor Centric can help.

Our advisors have extensive experience with strategic sourcing and can help you narrow down the best opportunities and implement the right strategy for your organization.

Schedule a call to learn more.