Pueblog USa
Tuesday, February 07, 2006
Government Bargain Hunting
Should paper clips and plumbing parts really be put out to bid in a formal process?
I was in a conversation yesterday with a public official who shall remain nameless because he was not warned that he might be quoted. I was getting the nitty-gritty about how something works in the City.
“Then,” he said, “the fire department puts it out to bid and [the job] is done.”
“How much does [the job] usually cost?” I asked. “$500?”
“That would be about right,” he agreed.
“So, with the bid process, the City is spending, what? $200 or $300 so they can spend $500?” I asked.
“Well, how would you know what the lowest price was without going through the bid process?” he asked.
“You call them up and ask,” I replied.
I read the Public Notices in the newspaper and I am sometimes astonished at some of the things Government is expected to put out to bid in the formal process. Office supplies. Valves. Tires. Stuff you and I go shopping for every day.
Let’s say the bureaucrat who’s gathering information gets paid $15 an hour and there’s 50% overhead, meaning the employee is costing $22.50 an hour to do his job. In an hour he can probably call every office supply place in town and find out who’s offering the best price on a pallet of copy paper. Or a gross of pencils. Or, if the individual is fairly talented, 30 minutes on the web would glean the same info. Cost: $11.25 to $22.50.
Now, to put this out to bid, someone has to prep the RFQ, get it approved by a higher official, mail or otherwise send it to appropriate applicants, plus see that it gets published in the newspaper, collect the bids in one place, have them opened, read them, sort them and finally decide who’s offering the best deal. I figure two hours, minimum, provided the employee doesn’t have to fill the copier, find the correct forms, etc. Cost: $43.00 in labor (probably more like $150), plus newspaper fees and postage. Plus the wait time. Plus the vendor has to add the cost of prepping the bid to the price of the goods or services he’s selling.
I realize people are scared government officials are giving business to relatives at exorbitant prices, but seriously, how much is the bid process costing us as a percentage of small ticket items? Is it really worth it? Couldn’t the buyer just run a tape recorder while he’s making an inquiry call to prove the vendor with the lowest price was selected?
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