General Services Administrator Jay Solomon said yesterday that he has directed GSA to stop purchasing any office equipment or other supplies that can be bought more cheaply at retail stores.
Solomon, whose agency is the subject of two federal investigations of alleged corruption in its contract award practices, said GSA should also make more use of competitive bidding procedures to buy supplies at the lowest possible prices.
"If GSA cannot save the taxpayers money in the procurement of [supplies for federal workers], we should not be offering them at all," he said in a press release. "Therefore, I have directed that any item or class of items obtainable through retail outlets [at cheaper prices] than available under [current GSA procurement procedures] will be dicontinued."
The Washington Post reported yesterday day GSA, the federal agency responsible for providing government workers with office space and supplies, pays as much as 33 percent more for such items as typewriters, calculators and tape recorders than do state governments or consumers who buy the products in local discount stores.
Solomon told The Post yesterday that he sees no reason why the government should be buying hand-held electionic calculators, color television sets, cameras or other "consumer" items cited in The Post story. These items are purchased for military installations, hospital and offices of high-ranking officials.
"We're going to eliminate these items altogther," he said.
Solomon's testimony before the Senate banking committee chaired by Sen. William Proxmire (D-Wis), was interrupted yesterday when Solomon was asked if GSA planned to do a better job selling gold medallions - the subject of the hearings - than it does in buying office products.
"I suggest you and GSA management stand in line at Bell's [catalog sales store] whenever you have a purchase to make," Proxmire said, waving a copy of yesterday's Post and the Bell catalog at Solomon.
"The bottom line is there is no competitive bidding," Proxmire added.
The Post reported that GSA pays $612, for example, for a Royal single-element electric typewriter with a 16-inch carriage (Model No. 970) that the state of Maryland buys for $541.94 using competitive bids. In addition, it reported that GSA pays $70.36 for a Sharp electronic calculator (Model No. CT-500) that costs $59.90 at W. Bell & Co., which has stores throughout the Washington area.
"I don't stand up for all the practices of GSA," Solomon said. Solomon, who said that he had not yet checked the facts, suggested that GSA may have appeared to be paying higher prices of on calculators because prices of these items have been going down in the retail level.
However, GSA purchasing contracts, which cover one-year time spans, quote higher prices for calculators than the prices charged state governments and retail customers of catalog stores during the same time period. In any event, if manufacturers lower their prices on particular items, their contracts specify that GSA suppliers are to reduce to contract prices correspondingly.
"It is the policy of GSA to secure products through its acquisition systems at the lowest available cost," Solomon's press release said.
Solomon said that, "annually, [GSA] federal supply service schedules save the government $300 million through consolidating procurement with various federal agencies." He added that some of the most popular consumer-type products are subject to intense competition in the open market due to rapid fluctuation in cost. There are instances in which certain items are obtainable at discount houses for prices lower than those quoted in the federal supply schedules."
The $300 million figure apparently refers to the total discounts GSA obtains over published list distributor prices. However, list prices on many of the products are rarely charged.
For example, General Electric Co. publishes a list price of $79.95 for the minicassette Micro II tape recorder (Model No. 35330). Bell charges $58.25 for the item and Reliable Home Appliance Co., another discount outlet in the Washington area, charges $54.90.
Under its contract with a middleman company, GSA pays $62.20 each for orders of 5 recorders or less and $59.96 each for orders of 50 or more.
Last year, GSA spent $1.5 billion to purchase nearly four million products without obtaining competitive bids. The agency spends a total of $5 billion a year.
Solomon told The Washington yesterday he wants to review the entire purchasing system. "The middleman ( who resells products from manufacturers to GSA) has got to be removed," he said.
"I think we should have competitive bidding," he said, "but we're in the middle. The Chiles committee [the Senate Government Affairs Subcommittee on federal spending practices, headed by Florida Democrat Lawton Chiles] tells us to use the present purchasing system called multiple awards.
Chiles said yesterday he is reconsidering whether to include an endorsement of the multiple award purchasing system in a new government procurement bill he has proposed.