Consolidation of government procurement worsens corruption in government

By Rich Purtell 

A plan called FSSI (Federal Strategic Sourcing Initiative) is akin to “legalized cronyism”.  HR 1441 is a bill now under consideration that is in need of a CBA (cost benefit analysis); write your congressman about that.  At least we should be analytical BEFORE starting down the path of these “strategic” plans, and it would be even better if there was ongoing forensic accounting DURING such operations to make sure there isn’t excessive corruption, fraud, and waste.

Some of us more conservative types argue that many business monopolies are enabled, created, and grown due to the actions of government.  This can be true for local, county, state, or federal government layers.

In my construction trade I have seen for a number of years things called “performance contracts.”  These have been applied at school districts and county governments in my territory.  These are “lease to own” type methods of buying expensive building systems, such as HVAC.  Many municipal codes really frown on these lease arrangements for government, due to the high interest costs.  One key motive for government entities to enter into these arrangements is to hide/conceal expensive building projects from the general public.  Rather than go to the voting constituents for a bond referendum to do a major capital project, the government entity sets up a “performance contract” instead.  Sounds rather deviant, doesn’t it?

Now I am seeing the same big companies that are offering performance contracts, also offering “energy procurement services”.

If a government entity now uses a big corporate provider to not only install, finance, maintain, and repair building system(s) but now also goes to that SAME provider to buy natural gas, power, etc., we will see consolidation and creation of even larger monopolies.

Said companies will have more incentive to schmooze and influence government.  A greater dollar return creates an incentive to spend more on influence.  This could be illegal influence, i.e. bribery.  But more likely there will be legal influence:  Gifts, campaign contributions, lobbying efforts, etc.

This consolidation problem is permeating all layers of government, and is something behind the scenes that the public is almost totally unaware of.  Free market buying exceptions are a major component of government corruption, and why I call it a “chicken and the egg” relationship and why there should be intensified scrutiny of government outsourcing and procurement activities vs. purely focusing on the elected officials.  Much of the buying is done through executive branch agencies, by government employees who were NOT elected.

Again I point out that this problem is happening at all levels.  I’ve seen it more in county governments, schools, and  universities.  But I’m sure it is there at state and federal levels also.

Procurement consolidation is touted as a cost savings, but the unintended consequence is the formation of large monopolies who in turn have excessive influence on our government.  As such, procurement consolidation causes a good deal of damage, and we all should be more active in exposing this practice as a fraud upon the public.

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