Government Purchasing

The federal government is by far the largest consumer in the land— hundreds of billions of dollars yearly. It buys many of the products regular consumers purchase, including motor vehicles, fuel, drugs, paper, clothing, food, computers, software, appliances, furnishings, and medical devices. It also buys less usual products such as construction equipment, buildings, highways and military hardware.

Connecting all these purchases with established national missions, rooted in law, to clean up the environment, promote consumer health and safety, advance job safety and save taxpayer dollars can itself become a remarkable national mission. If the agencies and departments which do this buying could receive support and direction from Congress and the President, Americans would start seeing their dollars go further and their well-being improve.

This is not altogether a new story, but it is a largely forgotten one. How many people know that it was the U.S. Army which decades ago started legitimizing much cheaper generic drugs by using them in its hospitals? Until then, the big drug companies peddled the myth that much more expensive brand name drugs were purer and safer.

Equally little known is that the opposition of the auto companies to air bags was significantly broken by the General Services Administration putting out a bid in the mid-Eighties for 5500 air bag-equipped cars for government employees. GM and Chrysler refused to bid; Ford did and the rest is history. Back in the Civil War days, standardized clothing sizes were introduced when Lincolnís Union forces had to purchase uniforms for its troops.

Here is the wonderful prospect. Government purchasing specifications pushing forward the frontiers of innovation or available technologies that favor health, safety and environmental protection can quickly create large markets. This in turn offers producers or vendors early economies of scale, lower unit costs and lower risks. This then makes it possible for companies to invest in innovations before a consumer market exists. The results are products that become available to a wider public, just like generic drugs and air bags.

Nearly thirty years ago, Professor Barry Commoner, the great environmental scientist, proposed to the Pentagon that it buy solar photovoltaics at a scale which would drop unit costs and create a growing solar industry. His proposal was not accepted. But in the nineties, on a smaller scale, the Navy was placing a projected 20,000 photovoltaics in remote installations for economic reasons. There is no need to refuel and it is good for the environment. The Pentagon did its best not to publicize this good deed.

Of course long-time vendors to governmental agencies often oppose these innovations which challenge the “not invented here” syndrome. And the more the federal government leases or outsources its activities to corporations, the less realizable is this potential of government buying for important innovations.

There is another reason why government purchasing is now so important to advance statutorily based national missions of health, safety, environment, efficiency and care for posterity. Federal regulation is disappearing.

Why, you say, are there all those outcries by companies, trade associations and think tanks about over-regulation. A skeptic would say— how else do these groups keep raising so much money from their members or benefactors? The skeptic is right. Most federal regulations on the books are years, if not decades, obsolete and long since surpassed by industrial practice. They are not upgraded. Other categories of regulations are: (1) those demanded by the industries themselves, such as agricultural marketing orders, (2)newer regulations watered down to levels acceptable to companies that brag about their meeting or exceeding federal regulations (like meat inspection standards) and (3) those which are completely written into law by corporate attorneys (like gas pipeline standards and railroad safety rules).

In the financial or commercial areas the anemic nature of the rules are legendary. Whatís left are regulations that are often violated but rarely prosecuted (like water pollution violations)?

So federal regulation as a force for pushing industries faster to become safer or better in various ways (as the first wave of federal motor vehicle safety standards did) is largely a myth. This leaves the massive consumer purchases of the federal government to meet these lawful purposes, as is now being done in modest ways for the buying of post-consumer content copying paper.

Under the rubric of consumer sovereignty and the “customer is always right”, do not underestimate the corporate opposition forces. They know how consequential smart buying can be. Just ask Microsoft, whose monopoly power has pushed out competitors which can provide the federal government with software that is more affordable, usable, secure and innovative.

So, Uncle Sam as smart consumer and shopper needs to become a widely discussed agenda among citizen and taxpayer groups and their political representatives in Congress and at the state legislatures. For more information, log onto www.gpp.org and become active.