Procurement

Oftentimes, putting two and two together is obvious but never done. Putting the hundreds of billions of dollars of the taxpayers’ purchasing power together with the achievement of innovative national goals has been often obvious, but rarely does this potent combination of government procurement connect with the stimulation of better products and services.

Government agencies have demonstrated this point all too occasionally. The U.S. Army started buying generic drugs many years ago and helped start the civilian market availability of these less expensive, identical generic alternatives to the high-priced pharmaceutical brand names.

The General Services Administration, under a 1964 statute, started specifying added safety features on the automobiles it purchased for government employees. This practice, later elaborated into the GSA’s purchase of 5000 air bag-equipped cars in 1985, pushed the auto companies to move faster on safety.

There are many other advances which can be brought about if government procurement eschews the routine and becomes a more demanding big consumer so as later to help many little consumers.

Let’s start with hearing-aids and wheelchairs–both long overpriced and under quality. The Veterans Administration (VA) has bought both these items in great quantity. By and large the VA has lost decades of opportunities during which it could have bargained for better prices and quality, or else generated the competition that would respond. It is just that big a buyer and cannot be ignored.

Every week we receive an elderly person’s complaint about hearing aids, especially their unconscionable price.

Other complaints pour into consumer groups and consumer protection agencies about shoddy quality merchandise, product obsolescence and confusing warranties. Civil servants who buy for local, state and federal agencies can lead the way out of these seller shenanigans. They can change seller practices and then publicize these changes so that regular consumers can demand similar treatment.

During the Carter Administration, some good-faith efforts to use procurement for beneficial changes got underway. There was a Buy Quiet project to stimulate the design of less noisy machines such as garbage trucks and office equipment. Some progress was made.

But look at some larger horizons. The Department of Defense could purchase solar energy units, thereby enlarging the market and more quickly bringing down unit costs for this benign source of renewable energy. City, county, state and federal buyers could collaborate to stimulate the market for recycling and, better yet, for makers of biodegradable containers and packaging.

Government highway agencies could break through the asphalt and cement lobby and reach for better, available ways to build highways which are far less repair-prone at less cost. Life-cycle costing is beginning to catch on in some government procurement circles, but it needs to be defined in bolder, more expansive ways.

Consider how many decades it took to have a longer-lasting and more energy-efficient light bulb on the market. The short-lived bulb, with all its attendant costs of replacement, remained dominant for nearly half a century since the early thirties. General Electric had the bulk of the market. Government agencies bought billions of these bulbs over this time period, without demanding a better product for the taxpayers’ dollar.

Taxpayers grumble about tax rates and how their tax dollars are wasted. They rarely think about how those tax dollars can help their consumer dollars if they are used to stimulate innovation, safety, health, and efficiency in the products government has to purchase.

Next month, we are holding a conference on ‘The Stimulation Effect: A National Conference on the Uses of Government Procurement Leverage to Benefit Taxpayers and Consumers.” Assembled will be public purchasing professionals, innovative suppliers and, representatives of consumer and environmental groups, among others, who will get down to the nitty gritty of how to accelerate this process in many directions and overcome bureaucratic and other obstacles.

For more information on the conference, please write to Steve Gold, P.O. Box 19367, Washington, D.C., 20036.

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