NCPA - National Center for Policy Analysis

Did Streamlining Government Purchasing Crowd Out Bidders?

April 1, 2002

The federal government bought more than half its products and services last year without bidding or with practices auditors say do not fully shop the marketplace, an Associated Press analysis of contracting records finds.

Efforts to cut red tape as part of the "reinventing government" campaign may have gone too far -- inviting new risks of fraud, contracting experts and watchdog specialists contend. The present defense build up and a lack of safeguards has prompted University of Baltimore law professor Charles Tiefer -- an expert on contractor abuses -- to predict that scandals are coming.

  • The government bought $123 billion of its $230 billion worth of goods and services 2001 without bids or with methods auditors say are frequently used to bypass competition.
  • Such procedures were used to buy everything from computers and office supplies to background investigations and educational services.
  • A Pentagon review revealed that prices paid for commercially available spare parts bought without competition increased more than twice as fast between 1993 and 2000 -- as did prices for similar parts purchased competitively.
  • At the Department of Education last year, auditors demanded repayment of 80 percent of the $9.7 million in federal money spent under a contract the Puerto Rico Department of Education awarded without competition for the operation of elementary school learning centers.

Source: Associated Press, "Government Eyed for Shirking Market," Washington Times, April 1, 2002.


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