Small Business and Strategic Sourcing

The Department of Defense (DoD) may face challenges as it attempts to maintain its goal of spending about 23 percent of its prime-contract dollars for goods and services with small businesses and at the same time apply strategic-sourcing practices to reduce total costs and improve performance in ways that will not conflict with small-business goals while making DoD purchasing more effective and efficient. Strategic sourcing practices, for example, recommend consolidation of the supply base to reduce total costs, which can lead to fewer, larger, longer-term contracts with fewer and, often, larger suppliers.