Senate kills co-op purchase proposal

A Senate panel last week struck down proposed legislation that would have allowed state and local governments to purchase products and services from the General Services Administration schedule contracts.The Senate Appropriations Committee and the House Appropriations Subcommittee for Treasury Postal and General Government voted to erase the section of the Clinger-Cohen Act that called for GSA to test the concept of cooperative purchasing.

The committees took the action despite pleas to the contrary from the Clinton administration most sectors of the information technology industry and Rep. Dan Burton (R-Ind.) chairman of the House Government Reform and Oversight Committee.

Industry sources who had been fighting to allow cooperative purchasing on IT schedules last week all but conceded defeat.

"I think at this stage it may be time to call in Dr. Kervorkian " said Larry Allen executive director of the Coalition for Government Procurement. "I don't think the full committee of the House is likely to undo what its subcommittee did."

Proponents of cooperative purchasing believe it can save taxpayers money by allowing state and local governments to take advantage of the low prices offered through the schedules program while consolidating the buying power of all levels of government. Opponents said the idea could have a negative impact on small businesses which may have close ties to state and local governments. The extent to which other governments want to use federal contracts remains unclear.

IT industry officials held out hope that their products would be exempt from the ban after Burton vowed to forward language to the House subcommittee that would repeal cooperative purchasing on all items except IT products. Observers said they were caught off-guard when Rep. Anne Northrup (R-Ken.) disregarded Burton's proposal and recommended an amendment to repeal cooperative purchasing for all items and services including IT. Northrup's proposal was adopted by the House subcommittee.

A congressional source close to the subcommittee said members were reluctant to follow through on Burton's advice. "Burton was asking the appropriations committee to legislate and they didn't want to start doing that " the source said.

The source said the subcommittee was bombarded with complaints from industry representatives on the potential ill effects of cooperative purchasing. "This section of the Clinger-Cohen Act was passed in 1994 and was slipped into the bill with absolutely no hearings or discussion " the source said. "Once it was revealed everybody was up in arms."

Since 1994 Congress has placed three moratoriums on cooperative purchasing including one this spring that would have extended to the end of the congressional session.

Observers said members of the appropriations committees were unsure of the impact cooperative purchasing would have on small businesses and what benefits it would provide to state and local governments. They also were somewhat frustrated with the failure of the authorization committees to hold hearings on the issue or address it in their bills.

Frank Pugliese commissioner of GSA's Federal Supply Service said he believes cooperative purchasing was defeated largely by complaints to Congress by representatives from the pharmaceutical and fire apparatus industries - businesses that would have been exempt from cooperative purchasing anyway. "The most vocal opponents were those who wouldn't have been included anyhow " Pugliese said. "What are they afraid of? It amazes me that this continues to be such a hot button in Washington D.C."

Olga Grkavac vice president of systems integration at the Information Technology Association of America also said she was "disappointed" that Congress was unwilling to at least test the cooperative purchasing concept. "This way the program will have suffered a probable death before it was even tried " she said.

Some said Burton will resurrect the issue before the full House committee marked up the bill this week. But they said his chances of initiating a complete turnaround on the issue were extremely slim given the consensus by the Senate and the House subcommittee.

Allen said his organization will not continue to push for cooperative purchasing because of differences of opinion on the issue among member companies and because of the apparent reticence of Congress.

"There's a pretty even split within our membership that makes it difficult to act as an organization " he said. "And I think the people on Capitol Hill are tired of hearing about cooperative purchasing. I don't think they would be eager to hear any further proposals on the matter in the near future."

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