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The cost
What is bad procurement costing you?
GAO reported that leading companies saved 4 to 15 percent on the services they buy by sourcing them strategically. On $50 million of services spend, that range is $2 million to $7.5 million a year. The agency already pays the gap. It just isn't labeled.
§ 01 The range
See the range on your services spend.
An illustration of a published range, not a measured loss. The diagnostic is what measures your agency.
At 4 percent
At 15 percent
§ 02 Sources
Where the numbers come from, and what they don't say.
- U.S. GAO, GAO-13-417 (April 2013)
Officials at seven leading companies reported saving 4 to 15 percent over prior-year spending by strategically sourcing the services they buy. The sample isn't generalizable. When GAO scaled the finding to federal services spending, it used the low end: 4 percent of $307 billion, about $12 billion.
Read GAO-13-417 - The Hackett Group (2015, 2017)
World-class procurement teams deliver their services at about 17 percent lower functional cost than typical peers. That's the cost of running the procurement shop, not 17 percent of what the organization buys.
Read the summary - Hackett maverick-spend survey, via published summaries
Buying outside the process is often reported to wipe out 10 to 20 percent of targeted savings, not of the whole budget. On a $5 million savings target, that's $500,000 to $1 million.
Read the summary
Munivera doesn't claim your agency is losing $7.5 million. The range shows why it's worth three weeks to measure your own process. Staff time, below, is a separate and more direct cost.
§ 03 Symptoms
Which of these are true in your agency?
Tick every statement that is true in your agency.
§ 04 Three costs
Already in the budget. Just not labeled.
Staff time
Rework, status hunting and board-packet assembly from email, paid for in fully burdened hours. It's real, and it's separate from any sourcing range.
Delay
A request that sits incomplete doesn't only cost the buyer. It costs the department waiting on a contractor, a bus, a roof or a grant drawdown.
Risk
Undocumented exceptions, untraceable files and informal closeout show up later as protest exposure, audit findings and another Legal review of the same language.
§ 05 Staff time
Price the time spent chasing incomplete requests.
Chase time
At your rate
Next step
Measure it in three weeks.
The procurement diagnostic walks your real process with the people who run it and leaves you with one recommended fix, or a clear reason not to proceed. It's sized to fit common small-purchase thresholds.