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From NBCnews: For little work, silent partner in coronavirus contract sold protective gear to U.S. for double the cost
This is why I get so angry at the news sometimes. This came up last night under a different headline with the company name in big print. First of all, the company involved (W. W. Grainger) is no silent partner. I guarantee you, their name is all over the paperwork required by the government. Second, anyone who knows anything about W. W. Grainger (mostly people who've worked in management in a wide variety of industries), knows that W. W. Grainger is a retailer. Du Pont is a manufacturer of the products involved. They don't sell these products directly, they sell to wholesalers and in this case a retailer, all of whom make their money by a mark up from what they pay to the manufacturer. Why doesn't Du Pont sell these things directly to the government? Because selling to the U. S. government is a giant pain in the ass. Among other stupid decisions, Donald Trump and his cronies have thrown the Paperwork Reduction Act in the trash.* So companies that are willing to sell to the U. S. government directly, have to keep up with whatever new crap the bureaucrats come up with. And then there are inspections. You can't just send the purchase to the government. They have to inspect a sample at the place it's going to be shipped from. It's a good idea, believe me. The government saves a fortune not having to return obvious junk. But having someone with the inspector(s) to answer questions and make sure all the paper work is in order and available to the inspector(s) costs the seller money. There is of course another inspection after the products are delivered to the government. And if any thing goes wrong at either inspection, it's the responsibility of the seller, in this case Grainger, to deal with the manufacturer and make it right. Grainger is a retailer. Their mark up is always substantial. Add in all the crap they have to go through to get the government to even look at the products, and paying double what Grainger paid the manufacturer isn't all that surprising or even unreasonable, particularly on otherwise inexpensive items.
The reporter writing up the article doesn't know any of this and his higher ups really don't care as long as it sounds like a juicy story.
*You should have seen the ridiculous special "easy" retired person's income tax form I had to fill out this year. It was about a third longer than last year's for no damn reason. I do my taxes on the computer so my work was about the same. But it came out with a third more forms somebody at IRS was going to have to go through to make sure I and the millions of other seniors didn't cheat somewhere. Granted, with my income it will be little more than a glance. But it's time for a worker that all of us are paying for.
This is why I get so angry at the news sometimes. This came up last night under a different headline with the company name in big print. First of all, the company involved (W. W. Grainger) is no silent partner. I guarantee you, their name is all over the paperwork required by the government. Second, anyone who knows anything about W. W. Grainger (mostly people who've worked in management in a wide variety of industries), knows that W. W. Grainger is a retailer. Du Pont is a manufacturer of the products involved. They don't sell these products directly, they sell to wholesalers and in this case a retailer, all of whom make their money by a mark up from what they pay to the manufacturer. Why doesn't Du Pont sell these things directly to the government? Because selling to the U. S. government is a giant pain in the ass. Among other stupid decisions, Donald Trump and his cronies have thrown the Paperwork Reduction Act in the trash.* So companies that are willing to sell to the U. S. government directly, have to keep up with whatever new crap the bureaucrats come up with. And then there are inspections. You can't just send the purchase to the government. They have to inspect a sample at the place it's going to be shipped from. It's a good idea, believe me. The government saves a fortune not having to return obvious junk. But having someone with the inspector(s) to answer questions and make sure all the paper work is in order and available to the inspector(s) costs the seller money. There is of course another inspection after the products are delivered to the government. And if any thing goes wrong at either inspection, it's the responsibility of the seller, in this case Grainger, to deal with the manufacturer and make it right. Grainger is a retailer. Their mark up is always substantial. Add in all the crap they have to go through to get the government to even look at the products, and paying double what Grainger paid the manufacturer isn't all that surprising or even unreasonable, particularly on otherwise inexpensive items.
The reporter writing up the article doesn't know any of this and his higher ups really don't care as long as it sounds like a juicy story.
*You should have seen the ridiculous special "easy" retired person's income tax form I had to fill out this year. It was about a third longer than last year's for no damn reason. I do my taxes on the computer so my work was about the same. But it came out with a third more forms somebody at IRS was going to have to go through to make sure I and the millions of other seniors didn't cheat somewhere. Granted, with my income it will be little more than a glance. But it's time for a worker that all of us are paying for.
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You're right about Government Procurement, since that's my job. I procure items for a government agency that is both state and federally funded. The rules of acquisition differ per state and are different per Federal and State. For suppliers? There' a Buy America requirement which is highly annoying, since there are pieces that aren't.
And it's close to impossible to get a waiver. There's also requirements on who you can procure from, amount, how it can be evaluated, it must be the lowest bidder - but how that is evaluated is not necessarily logical. And, they have a gadzillion forms, all put is place by various legislators who put them there for some lobbying group. For example - Don't buy anything from anyone who invested in Northern Ireland - specifically the NRA. Don't buy anything by anyone who invested in Iran. They can't have lobbied the government in anyway. They have to fill out a Responsibility form and a background check. Also pay for both.
We have regulations on top of regulations - because we have to please everyone. Everyone has an issue. We need to make sure Disadvantaged Small Businesses get to bid, and make sure they have opportunities.
It's complicated. And people whine about it - but then they complain that we aren't giving them business. Truth? People are hypocrites.
Is private procurement easier? Not really. It has it's own problems, just less regulations and requirements. But lots of price gauging. The government actually can pull prices down better.
Again, this is what I've done for a living for about twenty years now. I'm kind of an expert.