Editorial: The wrong fix
In targeting the General Services Administration's Federal Technology Service, the authors of the Senate Defense Authorization bill have gotten their priorities backward. Rather than keeping defense agencies from doing business with FTS, Congress should ensure that more work goes its way.
The provision at issue would prohibit the Defense Department from buying products and services through governmentwide contracts in which the service charge exceeds 1 percent. The bill mentions no contract or service by name, but FTS, which runs numerous contracts that charge more than 1 percent in fees, is the object of senators' ire.
The rationale seems simple enough: Theoretically, DOD could save millions of dollars in service charges by using contracts that charge 1 percent or less. But this logic does not hold up. If lawmakers really cared about avoiding costs, they would require DOD to create its own contracts along the lines of Millennia and Millennia Lite.
Defense agencies are willing to pay the FTS fees because they want the contracts and support services that it offers. Officials find it worthwhile to pay a little extra rather than settle for something less than they want or, worse yet, set up their own contracts.
DOD should not be in the business of awarding contracts for commercial technology products and services — for that matter, neither should NASA, the National Institutes of Health or the Department of Veterans Affairs.
These and other agencies discovered the joys of governmentwide acquisition contracts in the late 1990s. By creating their own contracts and opening them to other agencies, officials could promise more business for bidders, who would then offer lower prices. It's all about economies of scale.
The same thinking led to the creation of GSA, which manages real estate, cars and trucks, and other commercial goods and services for agencies across the government. Technology should not be treated any differently.
Any contract for the acquisition of basic products and services should fall under the purview of GSA. Then the economies of scale would really kick in. Not only would GSA be sure to get the best prices from vendors, but the agency could afford to lower its service charges.
Such a move would be certain to meet resistance from agency officials — and perhaps lawmakers, who frequently scrutinize GSA and FTS. But the longer the government delays, the more money it wastes.