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The Government Really is a Good Buyer

Tom Temin | FederalNewsRadio

You’ve heard the horror stories. A nearly 10-year delay in acquiring new aerial refueling tankers. Big cost overruns on the electronic fence between the U.S. and Mexico. A failed interagency contract to build a system for handling Veterans benefits claims.

It’s all enough to make anyone ask, can the government buy anything right? Do taxpayers ever get their money’s worth?

Such questions date back at least to the Civil War, when crooked contractors sold sub-par shoes, uniforms and blankets to the Union Army. Blankets were made of a byproduct of cotton production, not cotton itself. That material is called — shoddy.

And yet, the government buys lots of other things besides exotic fences stretching for tens or hundreds of miles, or high-technology jets. It also spends tens of billions of dollars a year on everyday commodities — cars, office furniture and supplies, computers. How well does it do with these items? Turns out, the government gets the best deals of anyone.

Long time watchers of government buying pretty much agree that when it comes to procurement, there are two governments. There’s the government that launches big and ambitious projects that often take longer and cost more than first reckoned. And then there’s the government that buys large quantities of commercial products with the shrewdness of an experienced bargain hunter at Loehmanns.

Phil Kiviat is President of the consulting company Guerra Kiviat. His two decades of government experience as a technologist started in the 1960s. For the past 20 years he’s been a marketer, and consultant to companies selling TO the government. Kiviat says there really are two sides to how the government buys.

The government does well, he said, when it buys undifferentiated products that really are commodities, but not so well when it tries to make standard products that are highly customizable, like software. And what’s the problem with non-commodity buys? According to Kiviat, the government is often at fault for changing quantities or specifications over time, making for uncertainty and therefore greater risk for contractors.

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