If you’ve ever seen a copy of the Federal budget, you know that the U.S. government spends billions of dollars each year. For trivia’s sake, the states receiving the largest amount of federal dollars? California and Florida. Government spend consists of 46.7% to direct agency payments, 8.4% to insurance, 17.5% to contracted goods and services, and 27% to grants. The agencies spending the most amount of Federal money includes Social Security, Defense, and Homeland Security.
The next time you’re barefoot at the airport, having your laptop combed through and having your body blasted with X-Rays, think about how the guys in the blue shirts receive more funding than education. This makes you question the government’s decisions and actions.
Coupa, a producer and marketer of cloud financial applications, took a look at USASpending.gov and called out some interesting numbers. The government spends $4.35 billion on dairy and eggs, and $1.45 billion on fruits and vegetables. There are more than 60,000 contracts in place to buy dairy and egg products.
Their recommended solution to cutting down on the paperwork and spend? “Slash the number of contracts while increasing the percentage of spend against the contracts remaining,” says their VP of Business Strategy Amit Duvedi. In other words, consolidate suppliers and increase spend within those suppliers. The company estimates a supplier consolidation across all budget categories could save 6% to 10%, or about $14 billion.
You already know that consolidating suppliers is good in terms of spend management and supply chain optimization. Is it time to get the government on board?