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Commentary & Analysis

Free Special: Joint Committee on Printing Hearing Addresses OMB Plan to Make GPO Optional for Executive Branch Agencies

By Frederic G.

By WhatTheyThink Staff
Published: July 16, 2002

By Frederic G. Antoun, Esq. currently serves as Counsel to Printing Industries of America (PIA) Government Affairs Division for Government Printing and Information. As printers and government agencies know, 44 U.S.C 501 has long required that Executive Branch departments and agencies go to the Government Printing Office (GPO). For a number of years there has been a "turf war" between the Legislative Branch and the Executive Branch over whether or not GPO, a Legislative Branch entity, should be buying Executive Branch printing under a statutory mandate. Beginning in the 1920’s Executive Branch entities began to complain about GPO’s "monopoly" because GPO produced most of its printing in-house, and fixed the prices based upon its costs. However, since the early 1960’s, GPO has been procuring most of its work on competitive bids form private sector printers. Today, according to testimony at the Hearing, GPO procures about 75% of all the Executive Branch printing from private sector printers on competitive bids. As a result, insiders generally agree the term "monopoly" applied to GPO is a misnomer; GPO is actually is a centralized procurement operation. While the GPO kept pace with governmental trends and began to rely on private sector outsourcing for most government print needs, it did not modernize its print procurement methodologies. Today, the GPO still awards large and small printing contracts to the lowest priced vendor, while other purchases throughout the government are generally made on a "best value" basis, which considers not only price, but also quality, service, on-time delivery, etc. In May of this year, the Office of Management and Budget (OMB) issued Memo M-02-07, which planned the shift from a mandatory GPO to an optional GPO, allowing agencies to buy printing directly from the private sector. One of the major reasons for the OMB Memo was its desire to update print procurement methodologies, to conform to other procurement practices throughout the rest of the federal government. However, some did not even notice that aspect of OMB’s effort, but saw the OMB Memo only as a direct attack on GPO, and, possibly, its, "Board of Directors" the Congressional Joint Committee on Printing (JCP). JCP held a hearing on the OMB Memo on July 10, 2002. Unlike some previous JCP hearings, this one was very well attended, both by interested parties and Committee members. Comments from the Committee Chairman, Senator Mark Dayton (D-MN), the Vice-Chairman, Congressman Robert Ney (R-OH), and other members of the Committee made it clear that the Committee members were not pleased with OMB’s Memo. The primary reasons for this lack of support came out in the Committee member’s questions and statements: 1. 44 U.S.C. 501 requires that Executive Branch agencies procure their printing through GPO and has been on the books and enforced for 130 years; since no court has declared the statute unconstitutional, and it has not been repealed, it is still the "law of the land," and cannot be overridden by an OMB memo. 2. GPO competes all of its jobs, even the small ones, on open competition in the private sector, thereby guaranteeing the best price. 3. Private sector printers, 16,000 of whom are registered GPO vendors, rely on the GPO for "one-stop shopping" to obtain government contracts, which are critically important to many small printing businesses. 4. While GPO may need some modernization, there is no reason to throw out this longstanding economical system. 5. Committee members saw no evidence that decentralizing print procurement and creating hundreds of individual printing departments would be more economical than the current centralized system. Testimony by a number of experts can be summarized as follows: 1. The ability to purchase printing on "best value" is a critically important need of the Executive Branch, as perceived by the OMB, Executive Branch agencies, Printing Industries of America (PIA), the United States Chamber of Commerce, and private sector government printers. 2. Without the GPO’s centralized system, many public documents distributed by the Superintendent of Documents would not be available to libraries throughout the country and the public. 3. GPO openly competes all of its procurements in the private sector market, and thus prices reflect the market at any given time. 4. The taxpayers and the agencies are well served by the current GPO system, which, with minor modifications, should meet all of the needs of the stakeholders. 5. The saving analysis OMB projected for moving direct agency procurement was flawed in that compared GPO in-plant production cost with GPO procured printing cost, and not GPO procured printing cost with potential agency procured printing cost. There is no reason to believe that any private sector printer would charge an agency less that it charges under the highly competitive GPO open bidding system; in fact, given that agency procurement for small jobs (85% of government jobs are under $2,500) are not openly competed, the expectation is that the Cost of these small jobs would increase. So what is going to happen? The purpose of the JCP Hearing and other Congressional hearings is to gather information, not to take action. However, it seems fairly clear from the hearing that JCP members do not support making the GPO optional at this time. OMB has indicated that it intends to go ahead with implementation of its plan despite JCP’s position. That would be a major mistake for the administration and OMB. This is not a partisan battle, but one involving professional courtesy and protocol between the branches of the government. If OMB moves ahead, it will alienate not only Democrats, but also many Republicans on Capitol Hill—over an issue that is not worth fighting about in the grand scheme of things in Washington. Printing Industries of America (PIA) and a group of its members plan to spearhead an effort to have JCP adopt the praiseworthy procurement modernization methods cited by OMB as a reason to justify making GPO optional (best value, requesting Proposals instead of just a price on complex jobs, and bundled services contracts). If JCP directs GPO to adopt these methods, the agencies, the complaining printers, and OMB will have what they want, and the battle should be over (JCP has the authority under 44 USC 103 to make this change, without any new legislation). Whether this logical change can be accomplished is unclear, but given the appearance that both OMB and JCP simply want to build the best system for the taxpayers, the agencies, and the vendors, we are hopeful that a positive change can be adopted without crippling centralized print procurement. On the other hand, it seems that OMB is far enough into this battle that, if a change is not made, it will continue with its plans and issue new FAR regulations permitting agencies to buy their printing without going though GPO. If that happens, the issue will undoubtedly end up in Federal Court, as a result of actions by GPO, the private sector printing industry, or, surprisingly, perhaps the Joint Committee on Printing itself. To read or download all the Hearing testimony go to: www.printlaw.com He can be reached at 717-261-0998 or by email at antoun@printlaw.com. About Fred Antoun Fred Antoun maintains law offices in Chambersburg, Pennsylvania and Washington, DC. His practice concentrates on federal government procurement law, primarily involving printing and information dissemination contracts. He has assisted clients in all phases of contract formation and administration, including strategic team arrangements, joint ventures, contract interpretation and bid preparation. Fred is a recognized expert on government printing and information dissemination issues, and has given testimony on the subjects before Congressional Committees. He is the author of articles published in numerous trade magazines, association newsletters, and on the web. In addition to his private practice, Fred currently serves as Counsel to Printing Industries of America (PIA) Government Affairs Division for Government Printing and Information. He can be reached at 717-261-0998 or by email at antoun@printlaw.com.



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