Indirect procurement spend is often overlooked—but it could be the silent drain on your budget.
From office supplies to cleaning and maintenance services, indirect procurement decisions touch every corner of a public agency’s daily operations. And while procurement teams already know this spend matters, many are surprised by just how much impact small purchasing optimizations can make, especially when working with limited resources and rising costs.
Understanding Indirect Procurement in the Public Sector
Indirect procurement refers to purchasing goods and services not directly tied to delivering services to constituents. Direct procurement refers to acquiring essential resources such as infrastructure components or raw materials required for agency operations. In contrast, indirect procurement encompasses items and services that support the everyday functioning of agencies. Some indirect procurement categories include:
- Facilities management
- Office equipment
- Professional services
- Software licenses
- Maintenance services
- Corporate services
- Personal protective equipment
While these may seem routine, they collectively represent a significant portion of overall spend—yet are often spread across departments, making them harder to control, track, and optimize. Without visibility into this indirect expenditure, opportunities for cost savings and better cost management are often missed.
Direct and Indirect Procurement: Equal Players, Different Playbooks
Too often, direct and indirect procurement are viewed through different lenses—when in fact, both play critical roles in supporting public outcomes and contribute to the big picture.
- Direct procurement spend supports core services—such as utilities, transit, or infrastructure projects—where timelines, compliance, and service delivery are on the line.
- Indirect spend, unlike direct procurement, supports the behind-the-scenes operations that make those services possible, from staff software to facilities maintenance.
A robust procurement function understands the balance. Improving indirect procurement strategy allows government agencies to streamline their procurement operations, even for the “smaller” purchases that add up quickly.
With growing pressure to do more with less and more financial strain being placed on agencies, teams are searching for ways to optimize even the most granular purchases. When managed strategically, indirect spend becomes a powerful lever for cost control and operational resilience.
To reveal this hidden value, public agencies are focusing on:
- Enabling staff to make compliant purchases directly through a centralized marketplace, ensuring they buy from approved contracts at negotiated rates.This gives dedicated procurement teams the ability to take their hands off every small transaction while still having the visibility and comfort in knowing that purchases are being made on-contract.
- Equipping procurement professionals with data and automation tools to uncover and identify cost saving opportunities faster and with less manual effort.
Where the Impact Is Hiding: Cost Savings in Everyday Purchases
Often, it’s not the million-dollar contracts but the thousands of daily, low-dollar indirect purchases that quietly erode budgets. Paper, pens, and office supplies may appear harmless, but when purchased through disjointed processes, indirect procurement costs can spiral. These costs are made worse when departments operate independently and without alignment with internal stakeholders.
A recent report revealed how the government spends funding on everyday items like soap dispensers and coffee cups. While these items may seem trivial, inefficient purchasing choices quickly add up. For example, it was discovered that over $149,000 are being spent on soap dispensers and $1,300 for coffee cups at just the Pentagon alone.
Consider this: Chicago Public Schools discovered a staggering $1.7 million in cost savings within just one year by leveraging Euna Procurement’s marketplace solution. This impressive figure underscores the power of better supplier access, price comparison, and holistic spend management through AI-driven tools. When public sector organizations adopt smarter procurement practices, every dollar saved can be redirected to support critical needs, making a tangible difference in their operations.
Tactics for Smarter Indirect Procurement
Your procurement team likely isn’t growing, but your workload probably is. Here are practical strategies that help public sector teams achieve more with less:
1. Enable Strategic Sourcing for Indirect Categories
Using strategic sourcing for common indirect procurement activities like software licenses or janitorial services allows agencies to consolidate demand, negotiate volume discounts, and improve supplier terms—delivering measurable cost reduction.
2. Monitor and Reduce Off-Contract Spend
Procurement teams should actively monitor off-contract spend—purchases made outside approved supplier agreements—which often results in higher prices and compliance concerns. Better tracking through modern procurement solutions enables centralized controls without slowing down purchasing decisions.
3. Empower Overwhelmed Teams with Automation
Time is often the biggest barrier for procurement teams. Tools that automate approvals, highlight cost saving opportunities, and integrate key suppliers into a single space can free up your team to focus on high-value work—supporting continuous improvement across departments.
4. Improve Internal Collaboration Without Creating Bottlenecks
Empowering finance and accounting teams, school leaders, and program managers to engage earlier in the procurement process helps reduce last-minute purchases and duplicated effort. When departments understand how and when to use approved contracts, procurement can shift from chasing compliance to enabling smarter, faster decisions. The result? Less friction, faster fulfillment, and meaningful cost reduction across even the smallest purchases.
Why It All Matters: The Bigger Picture
Yes, improving indirect procurement is about cost reduction—but those savings ripple outward. Every dollar saved on indirect costs like paper, licenses, or janitorial services can be reinvested into programs, infrastructure, and services that directly impact constituents. In that sense, strategic spend management is more than good governance—it’s community care in action.
Better visibility and smarter purchasing decisions support efficient use of public funds, reinforce accountability, and strengthen an agency’s ability to weather economic uncertainty.
Conclusion: Rethink the Role of Indirect Procurement
The pressure on public procurement teams isn’t letting up—but the tools and strategies to manage that pressure are getting better. Indirect procurement relates directly to the effectiveness of your agency operations. And while it may never grab headlines, it’s where financial health, risk management, and procurement efficiency quietly intersect.
By taking a closer look at indirect procurement deals, optimizing your indirect procurement strategy, and supporting your procurement team with the right tools, your agency can uncover real value—one indirect purchase at a time.
Euna Solutions, a leader in government technology, designs, builds, delivers, and supports trusted procurement, payments, grants management, and budgeting software for the public sector.