The Fourth of July is not only a great time for parades, fireworks, and backyard barbecues, but it’s also the perfect opportunity to consider domestic sourcing in procurement. 

The Fourth of July is not only a great time for parades, fireworks, and backyard barbecues, but it’s also the perfect opportunity to consider domestic sourcing in procurement. 

In July 2021, the White House proposed reforms to federal procurement policy. It stated the proposals are "the most robust changes to the implementation of the Buy American Act in almost 70 years." 

Whether or not your company works with federal agencies, it can support American business and manufacturing in its procurement processes. One way is to use group purchasing organizations (GPOs) to source American-made products.

When you procure American raw materials and products through a GPO, such as CenterPoint Group, you're supporting domestic enterprise and making a positive impact on the national economy. You could also be strengthening your own business's local economy.

Additionally, you benefit from the GPO's ability to leverage multiple companies' purchasing power for better prices with suppliers. You realize bulk purchasing's cost savings without compromising on quality or ethical standards.

Before you fire up the grill this Independence Day, take a closer look at how domestic sourcing procurement with GPOs contributes to a stronger, more resilient America.

How Domestic Sourcing Through a GPO Benefits America

Domestic sourcing is procurement of raw materials, services, and finished goods and products from suppliers within the same country or region as your business.

Factors beyond government regulation have helped domestic sourcing in the United States gain traction. These factors include:
Support for Local and Domestic Economies

When businesses purchase from local suppliers, they help create jobs and stimulate economic growth within their own communities. This increased economic activity can have a positive impact on the surrounding area, contributing to businesses' success and residents' well-being.

Lower Transportation and Logistics Costs

Through domestic and local sourcing, businesses can avoid the high shipping fees and transportation costs associated with international sourcing. Domestic procurement can also lead to shorter supply chains, which can be more efficient and reliable. Shorter supply chains are especially important as global chains change in the aftermath of the COVID-19 pandemic.

Positive Environmental Impacts

Caring for the environment can be a patriotic act, and domestic and local sourcing can have positive environmental impacts. By reducing transportation distances, businesses can minimize their carbon footprint and contribute to sustainable practices. These effects help keep the U.S. “America the Beautiful.” They can also improve a company's reputation and consumer confidence in it.

Possible Challenges of Dealing with Domestic Suppliers

For all of its benefits, domestic sourcing procurement isn't without its challenges. These challenges can include:

Potentially Higher Costs Compared to International Sourcing

Often, labor and production costs are higher in domestic markets. Additionally, smaller domestic suppliers may not have the same economies of scale as larger international suppliers, resulting in higher prices.

Limited Availability of Certain Raw Materials or Products

Some raw materials may be available only from overseas suppliers. Certain products may not be produced domestically at all. This reality can require businesses to either pay higher prices for imported goods or seek alternative suppliers overseas.

Navigating the Regulatory Landscape

Complex regulations govern domestic sourcing procurement—particularly, as mentioned, for federal agencies' prime vendors. Federal contractors must comply with the Buy American Act, the Federal Acquisition Regulation (FAR), and other rules. Compliance can require significant expertise and resources.

Finding Suitable Domestic Suppliers

Some businesses may have a lack of options or limited information about local and domestic suppliers available to them. Researching your domestic options takes time and energy that you, as a busy procurement professional, simply don't always have.

But GPOs can help businesses successfully meet all of these domestic sourcing challenges.

CenterPoint Can Help Your Business Meet Domestic Procurement Goals

An industry-leading, certified minority-owned GPO, CenterPoint can help your business meet the challenges associated with domestic sourcing procurement.

We aggregate buying power by pooling together customers and vendors. Our negotiated contracts give our members larger discounts from suppliers. 

We have strong relationships with a wide range of domestic vendors, making it much easier for you to find American sources and suppliers than you could on your own.

And we help your procurement processes remain in regulatory compliance, because we give you access to suppliers who meet your specific compliance needs.

Take some time this Fourth of July to see what CenterPoint customers are saying. We’ve helped them save money and time, and we can do the same for you. Also, download our latest