Discussion

By Clint Bolte on Jun 30, 2009

Is this third party "watch dog" simply raising a warning flag of a problem or are they suggesting that through "their expertise they can streamline or in some fashion facilitate - for a fee - the government payment to their print vendor(s)?"

Presumably if the government were late in payment of their A/P they would ultimately make good without taking their early payment discount, which has been so important both to the government in acknowledging the original award of contract and to the successful vendors who absolutely depend upon the government's promised prompt payment.

This prompt payment feature by the GPO has been one of the secrets to their success in being able continually to attract qualified vendors. Most state print procurement agencies have never seemed to be able to figure this cash flow principle out quite as effectively as the GPO.

By Cary Sherburne on Jun 30, 2009

Clint, your question is very insightful. While I didn't want to get into a discussion of the third party, it does appear likely that they are pursuing a business objective. I found it telling that neither the GPO nor I were able to get contact info for printers with problems from this third party. At any rate, if there are printers with problems, they should now have an easier path to getting them resolved. If not, we will likely hear about it directly from them.

By William Gindlesperger on Jun 30, 2009

I cannot speak to the payment problems confronted by the unidentified “third-party source,” but I can definitely confirm the difficulty that many government printers are having with the new GPO Business Information System (GBIS).

As the nation’s oldest and most successful government print consultant (34 years and counting), my firm’s Government Print Management Division has seen repeated attempts by GPO to modernize its operations. These efforts inevitably result in “transition” problems and more difficulties for printers trying to do business with the Federal Government. GBIS is but the latest example. Many printers began reporting payment problems shortly after GBIS was initiated on May 4, 2009, when invoices submitted in late April were not being paid on time.

To hear through WhatTheyThink.com that a third party may have gone to its Congressional Representative to start a “Congressional investigation” of GPO as to why bills remain unpaid may be a little over the top. Likely the Congressional Office wrote a letter to the Public Printer, who turned the letter over to the GPO Congressional Liaison, who in turn responded to the Congressional Office that all possible is being done to resolve the payment problem regarding lack of payment to the complaining constituent. That would be the end of the so-called “Congressional investigation”. In the meantime this third party may still be unpaid.

To their credit, GPO personnel are acknowledging that its GBIS system is still a work in progress, but no one is predicting when these problems will subside, and printers need to be paid as promised and without delay, particularly when many print jobs entail upfront outlays for paper and mailing costs. And that is precisely where Government Print Management comes in.

Since May we have resolved numerous payment delays for our clients including processing problems on literally hundreds of GPO invoices. In late June, one small business printer was faced with overdue payments on 23 GPO invoices, including one for over $22,000, until we intervened. A large envelope manufacturer, was waiting over seven weeks on a $26,000 invoice, then contacted us, and we tracked down the invoice and quickly obtained payment.

[Editor's note: Mr. Gindlesperger's comment has been edited to remove reference to commercial services offered by his firm.]

By Cary Sherburne on Jun 30, 2009

Fine, then give us names of printers who have had this problem so we can talk to them directly.

By William Gindlesperger on Jun 30, 2009

Cary - As you know, we are certainly not the third party source referenced in your original story, and we would appreciate your confirming this to your reading public. In fact, you did not contact us at any time regarding your story, even though the majority of GPO suppliers trust our advise and benefit from our services. Had you contacted us, we would have been glad to correct the information you were given by the mysterious third party and would have offered to you the appropriate contact persons at GPO. Now you are requesting us to offer you the names of our clients with whom we have non-disclosure agreements. Why would any GPO supplier want to publicize a dispute that we are able to resolve quietly and without embarrassment to any party involved?

By Fred Antoun on Jul 01, 2009

Rumors that GPO was short on funds due to the purchases of new presses are not accurate. GPO had/has the money to pay the printer invoices, but due to problems with the system changeover, just could not get the invoices paid. I also think they need to add staff, as the existing staff was working hard, but could not process all invoices on time. Since GPO loses the prompt payment discount (often 5%) when it pays after 20 days, it has a big incentive to get the problem resolved. As a purchasing agent for federal agencies, it also needs to provide efficient service, which includes making sure small and medium GPO printers do not stop or delay Agency print jobs due to lack of funds.
The Congressional involvement came from a number of Congressional inquiries (letters/calls to GPO from House or Senate members about why their printer constituents were not paid) which GPO must investigate and respond to in writing. These are serious and embarrassing, but technically not "Congressional investigations."
It looks like GPO is getting the problem under control, and GPO vendors who were dire straits due to non-payment are now seeing the cash flow begin again.

By Cary Sherburne on Jul 01, 2009

I am happy to confirm that you were not the third party that contacted me. I did not plan to publicize names of printers, only to talk to them off the record as background. In addition, I have learned that Calvin Adgerson is indeed working at the GPO on this project, so that is valid contact information. My sense of it is that the GPO is working diligently to make this transition with as little difficulty to its customers and vendors as possible. There is never a good time to undertake massive system upgrades such as they are doing, but they do have to be done.

By Ward W on Jul 01, 2009

“their expertise they can streamline or in some fashion facilitate - for a fee - the government payment to their print vendor(s)?”

We should hope the government transparency pushed by Obama and the new Business Information System will streamline the process of getting printing work from the GPO without the need to hire a middleman.

By Dave Young on Jul 02, 2009

We have long since given up on working for the GPO. Tardy payments were the least of it. I could never understand why they wanted us to provide negatives back for archiving (I haven't even seen a negative for years, as a short run printer). Spec errors were rampant, pick-up times (from downtown DC)were silly and having to subscribe to an expensive RFP service (sorry, Gindlesperger) all were working against this low margin business. My last thought: is this where our health system is going?

By William Gindlesperger on Jul 02, 2009

Doing work for the GPO is really not much different than doing work for any major customer. To be successful you have to know the ins and outs of the customer - its idiosyncrasies and its special requirements.

In this case, as Dave Young points out, GPO has its own requirements. In years past this did include the printer having to return negatives. Today, however, like with any customer, negatives are only required in the rarest of very special circumstances. And, yes, on some jobs there can be spec errors. But that can be true with many commercial buyers as well. That's why printers review and preflight copy.

In terms of pick-up times being, as Dave Young says, "silly", again that can be true, but I believe that the customer (in this case the GPO) has the right to set its own specifications and requirements, regardless of how "silly" the requirements may seem. It is up to the printer that bids a project to take into consideration - before bidding - whether that printer can meet the requirments - no matter how "silly" these requirements may seem to be.

In terms of low margin work, yes, GPO can be hotly competitive, but isn't that true of the entire marketplace today? That is the bane of our print industry. It is win work to stay in business or die doing nothing.

Regarding use of our representational services, it is absolutely not a necessity, anymore than it is a necessity to hire the most knowledgeable sales force you can find when going after any large account. We represent those firms that make a living doing GPO work, do not allow their equipment to sit idle and are often among the profit leaders in the USA.

Would I recommend going after GPO work? Likely not, especially if you consider stringent customer requirements to be bothersome to you, if you do not like red tape, and if you do not have the fortitude to be hotly competitive.

By Michael J on Jul 03, 2009

William,
"Doing work for the GPO is really not much different than doing work for any major customer."

Back in the day, I worked as a "broker" for Met Life. The printer was RRD. The customer was MetLife. It would be hard to find two more well suited participants for a transaction.

As a "broker" I was able to change some of the approval processes and job configuration. Since this was a repeating project we had a baseline to measure. We took a $1MM job, turned it into a $600 K job and RRD probably made a great net than the first time.

The point is that I know that working with complex organizations can be made more profitable for both parties while lowering the overall cost.

Often printers tend to be product focused, instead of process focused. But the reality is that most of the unnecessary cost is in a wasteful process. By streamlining the entire interaction, the printer can maintain margins and the customer can get closer to the price and specifications that they demand.

It would be great if there were a service like yours available to deal with the MetLife's of the world. No doubt the globals will continue to demand lower and lower prices. There is very little cost to be saved in the product. But there are huge savings to be made in broken processes.

I think it's why managed print services are an exploding business world wide. The paradox is that a print manufacturer is an expert at producing product. They don't have the time, experience or skill set to manage complex buying processes. When they try it cuts into margins instead of improving them.

By William Gindlesperger, CEO, e-LYNXX Corporation on Jul 07, 2009

Michael –

You hit the nail on the head, when you said that doing work for GPO is not different than doing work for any major customer. It is that easy, and it is that complicated. Knowing a customer, its way of doing business and its requirements goes a long way to facilitate acceptable work completed at a profit. Not knowing a customer and trying to do the work anyway can end in disaster for all parties.

Your experience as a broker is again right on. Brokers can perform an invaluable service for a customer – everything from writing specifications, to hand-holding throughout the process, to interpreting customer needs and to making these needs clear to suppliers that must accomplish the final print manufacturing. This can make the print project more successful for the buyer and more profitable for the printer.

However, in the GPO marketplace, brokers are not permitted. The GPO contracts only with end print manufacturers. There are a few rare exceptions including embroidery on hats or t-shirts, advertising specialties or premiums, and similar projects – but normally the contracted printer must put “the ink onto the paper”. That’s why we do not broker at my firm. Rather, we offer sales representational services that cut through the red tape and then advise our clients about the intricacies of each project, historical pricing in a competitive market and what it takes to do the work profitably.

Doing work for the GPO and being paid in a timely fashion is like looking at a plate of spaghetti. There may be a hundred strands of spaghetti on the plate. What you see is a large mound of entangled spaghetti strands. Yet, each single strand can be simple to see and delineate, if and when it is removed from all the others. It takes an expert to untangle the mess in order to make it simple to see.

Again, your experience is much like my own. Printers are a wonderful entrepreneurial group of people who work hard and are dedicated to serving their customers. They are experts at producing their products. But, on the most part, as you say, “printers don’t have the time, experience or skill set to manage complex buying processes”. That’s why third party expertise is nice to have around.

Here is a good example. Printers know that it is better, less expensive and more efficient for a print user to buy print from a printer than for a print user to set up and operate its own in-plant operation. Normally, the operation of an in-plant is not core to the print user’s business or profit objectives. This same logic applies to using a third party by printers who are looking at doing GPO work. Why build the internal expertise at a cost that is greater than buying the expertise on the outside. Doing printing is what is core to a printer’s business and profit objectives.

Incidentally, in answer to your question, our firm does offer services to the MetLife’s of this world. Again, these large buyers of print often come to the realization that buying print is not core to their business and profit objectives. They look for assistance in building efficiencies, measured cost reductions, improved sourcing, enhanced quality control, on-time delivery assurance, process control, transparency and full reporting. That’s a mouth full, but again, like spaghetti, it takes an expert to carefully untangle the mound of spaghetti and carefully lay out each strand.

Michael, you have a great sense of the print industry.

By Michael J on Jul 07, 2009

William,
Thanks for the kind words. It's good to hear about Met Life, back in the day they had a "print buyer" who had the "That's my job, thank you very much" view of the world. Eventually, after many years, she was excessed. It seems that Met has woken up to realities.

It's pretty clear that the trend is to outsourcing whatever can be outsourced to experts. The SF Chronicle is finally outsourcing their manufacturing to Trans Continental. An expert manufacturer can sell it, get a decent margin and save the organization money.

I've been on a little soapbox for a while that for most printers, most of the time, trying to become a "market service provider" is a much more dangerous strategy than becoming the best printer they can be. "Best" means low cost, appropriate quality and rock solid predictions of costs and delivery times.

By Barry Clark on Jul 10, 2009

Gindlesperger is right on. In over 40 years in the printing business, I can say without any doubt that every customer is a little different from every other customer. And the bigger the customer, the more time, energy and devotion it takes to learn the ins and outs of working with that customer. Because GPO buys half a billion dollars in printing, it stands to reason that GPO is the biggest and hardest customer with which to work.

Just look at the GPO web site and try to find anything. Then, when you do a job, you have to know all about GPO paper, quality standards, special terms and conditions, specifications, and on and on. Billing the GPO even has to be on a special form, filled out just so, with all kinds of stuff attached to it. If the billing is wrong, you don't find out about it until you figure out you didn't get paid, and then you have to start the whole process over with the billing form. It's a little unnerving to say the least.

If you don't believe me, go to the GPO web site, or look at the specs on a GPO job, and figure out how many copies you can place in a shrink wrapped package when the specifications tell you that the job is to be shrink wrapped but the specifications tell you nothing else. Then look at the GPO web site and find where it tells you just where a label is to be placed on a shrink wrapped package. Does it go on the top, bottom, side, end, inside the shrink wrapped package or outside? Now look at the web site and find all the other details on a printing job and how GPO wants each item to be handled. Tough ain't the word for it.

Then there is the whole issue of how to bid without going out of business. I mean the prices that GPO jobs seem to go for are really low. Having said that, there is half a billion dollars in GPO work. Knowing when to bid, who is probably the competition, and where the weak spots are in GPO's active printer base are all what makes the difference in making or losing money.

Doing this myself would make me break out in a cold sweat. It would probably also put me out of business.

Gindlesperger and his company know more about GPO than GPO likely knows about itself. The company's web site talks about the company working with GPO for 40 years. One thing is for sure, I wouldn't touch GPO unless Gindlesperger and his outfit were at my side.

In terms of what Michael J said in his earlier comments, there are a lot of printing buyers out there who desperately need expertise and a helping-hand with their specification writing, finding the right printers, buying their printing jobs, managing their projects, and handling their invoices. My experience is that these large buyers of printing are interested in getting their work handled better, faster and cheaper. If you are a commercial printing buyer and are able to get the advantages of what Gindlesperger has offered for years to the government, just think how easy your life would become.