2011 Management Excellence

Michael B. Smith

Saved U.S. taxpayers more than $750 million over three years by bringing together the buying power of 22 agencies and offices within the Department of Homeland Security.

In an era when the term “fiscal austerity” is more than just a catch phrase, saving taxpayer dollars is imperative to the health of our government and our economy.

Since he became director of the Strategic Sourcing Program Office in the Department of Homeland Security (DHS) in 2008, Michael Smith has saved U.S. taxpayers more than $750 million by developing new ways of purchasing critical security products, including ammunition, information technology, uniforms, communication equipment and other supplies.

These savings represent a three-fold increase over the three previous years.

After digging through and analyzing the data, Smith identified a wide range of categories of products and services that were ripe for savings by combining the bulk buying power of the department rather than having each individual agency make its own purchases.

“Prior to Michael’s involvement, strategic sourcing was done in a vacuum—stakeholders would not communicate and work together on the procurements. Michael changed that culture,” said DHS Chief Procurement Officer Nick Nayak.

Ultimately, Smith was able to bring together 22 formerly disparate components of DHS, including the Transportation Security Administration and Customs and Border Protection, and successfully lead them to common solutions to meet all of their individual requirements.

“Michael identified all the people who were involved in a product and put them in a room together. He put them at ease, listened to their needs and convinced them to join together on the contract. That’s hard to do and not really done at DHS,” said David Capitano, director of Office of Oversight and Strategic Support at DHS.

Capitano said Smith is able to speak everyone’s language and displayed “a wonderful ability to translate the different groups’ needs.”

“He gains trust by having both the technical knowledge necessary to give him credibility in the different communities, and he has the people knowledge to make them want to work together,” said Capitano. By combining the purchasing power of the agencies, Smith brought smarter offers to the table and achieved significant discounts.

“Michael led to a new way of doing business where agencies provided a letter detailing their financial and policy commitment to the initiative to obtain the best pricing for the government,” said Nayak.
Smith’s approach has been so successful that he was recently tapped by the White House to introduce his “strategic sourcing methodology” to other large agencies.

Smith also supported the nation’s small business community, placing more than one third of his purchasing dollars with this sector.

According to his colleagues, Smith goes about his work with humility, and is always focused on making sure all potential stakeholders understand the value he is trying to bring to their agency and the taxpayers.

“Mike checks his ego at the door. He brings a communication methodology that allows everyone’s voice to be heard,” said Daniel McLaughlin, the DHS acting director in the Office of Procurement Operations. “He then builds consensus by making people feel they are driving the buy, not being told to do something.”

“With each buying case there is resistance. Michael breaks it down with facts and figures, and convinces people this will be in the best interest of everyone,” said McLaughlin.

Smith said his task required “persistence and resilience,” and understanding the culture of different customer groups.

“I guided the integrated project teams through the buying process. I did data analysis of where to save and then pulled together stakeholders – program staff and acquisition staff,” said Smith. “We built trust by communicating frequently. I knew the different needs of both the program management and acquisition communities, and could serve as a translator to get everyone on the same page.”

Smith said he developed a customer service model to make sure everyone’s needs were accounted for and satisfied.

“I also understood where we needed support and brought in leadership support to make change,” he said.

Smith began his career in the Marine Corps and has worked at five agencies throughout government during the last 28 years. In addition to his own full-time responsibilities, Smith mentors members of the acquisition community.

“He has a deep commitment to civil service and is truly a model civil servant,” said Nayak.