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Commentary & Analysis

Free Special: What’s Next? ABC Advisors Reviews the Congressional Hearings on GPO Reform

ABC Advisors has been the leader in consulting and bid solicitation services for 27 years,

By WhatTheyThink Staff
Published: July 17, 2002

ABC Advisors has been the leader in consulting and bid solicitation services for 27 years, and has represented the vast majority of GPO's active public sector printers. (They provided the list of the top 50 printers doing work for GPO in our original report.) To help our members better understand the current GPO/OMB issue, ABC has agreed to share this client memo from Vice President of Customer Relations Deborah Snider and Vice President and General Counsel Andy Hawks on the recent congressional hearing. Yesterday, July 10, 2002, the Joint Committee on Printing (JCP) held its first hearing of the current Congress to address issues raised by a Bush Administration proposal to place executive agencies and departments in charge of their own printing. This proposal, first announced on May 3, 2002 by Office of Management and Budget (OMB) Director Mitchell E. Daniels, Jr., would formally end the Clinton Administration’s holdover policy of "voluntary compliance" with the current Federal print procurement statute (44 U.S.C. § 501), which requires nearly all executive agencies to buy their printing through the Government Printing Office (GPO). The JCP is a joint House-Senate panel chaired by Senator Mark Dayton (D-MN) and vice-chaired by Rep. Robert Ney (R-OH). In the course of the hearing, the Committee took testimony from both Director Daniels and Public Printer Michael F. DiMario, as well as from a panel of three private sector witnesses that included PIA Executive Vice President Ben Cooper and representatives of the Communications Workers of America and various library associations. The tone of the hearing was set by Chairman Dayton, who announced that the JCP would be probing the OMB proposal "to determine whether the plan will raise costs to taxpayers and hinder public access to non-classified federal documents." Chairman Dayton’s opposition to the OMB proposal was subsequently made clear when he raised the possibility of a lawsuit to stop implementation of the OMB plan. OMB Testimony: Director Daniels did not comment directly on the possibility of a lawsuit, but reiterated the Administration’s belief that § 501 of Title 44 is unconstitutional and stressed the benefits of ending GPO’s "monopoly status". Director Daniels was particularly critical of GPO’s being "insulated from market forces" with no "incentives to improve operations." Citing specific examples of agency complaints, he asserted that (1) there is no incentive for GPO to be "cost-effective; (2) the current system "invites inefficiency"; (3) customer satisfaction is "not a priority"; and (4) GPO sometimes fails to furnish the services promised. Director Daniels further dismissed arguments that agencies would lose the economies of scale being achieved by GPO and that public access to government information would be impaired. OMB’s goal remains a competitive system that provides "printing and duplicating services based upon best quality, cost, and time of delivery" and which continues to make all appropriate documents available to the Federal Depository Library Program (FDLP). To assure compliance with these goals, agencies would be required to "report annually on the overall cost of their printing and duplicating operations", including a "full accounting of all costs of the work", whether performed by GPO, in-house operations, or private sector printers. GPO Testimony: Not surprisingly, the Public Printer challenged the notion that GPO maintains a "monopoly" over federal printing. He pointed out that executive agencies maintain over 1000 in-plant printing and duplicating facilities, while GPO itself outsources approximately 75% of all print requisitions. At the same time, Mr. DiMario praised his agency’s past record of competitive cost savings (citing examples ranging from 50% to 86% in cost savings) and a 98.2% on-time delivery rate. Perhaps most importantly, the Public Printer challenged OMB’s claims of anticipated cost-savings, citing potential cost increases of "$230 million to $330 million in the first year, and from $150 million to $250 million annually thereafter." He attributed these cost increases to (1) the likelihood that more agency printing would be produced in-house; (2) the loss of GPO’s economies of scale: (3) the added costs that printers will incur from losing GPO’s "one-stop-shopping alternative"; and (4) the higher costs that GPO itself will incur in producing the work that remains with GPO. Lastly, Mr. DiMario expressed deep concern over the impact on the FDLP, citing historical evidence that "fugitive" documents have increased whenever printing authority has been decentralized. PIA Testimony: Representing the printing industry, PIA Executive Vice President Ben Cooper withheld support for the OMB proposal, but also viewed the hearing as "a tremendous opportunity to address some of the issues that have been part of federal printing … for years and never resolved." While agreeing with GPO that decentralization would likely increased the Government’s printing costs and leave agencies without the requisite in-house expertise to buy their own printing, his primary concern was the potential negative impact on small and mid-size printers. If the OMB proposal were implemented, Mr. Cooper foresaw a "bias in the system favoring larger companies, those companies with a specialized government sales force, or a unique relationship with the agency." Consequently, it is PIA’s hope that OMB’s proposal will open "the door for real discussion about reform," which Mr. Cooper felt should focus on five areas: (1) greater use of "best value" contracts; (2) improved GPO customer service; (3) restructuring GPO’s surcharge and prompt payment fee arrangements; (4) outsourcing current in-plant printing and duplicating facilities; and (5) creating a broader web based procurement environment to assure "that printers not located near agencies can still participate in the procurement system." Next Steps? The hearing ended without any resolution and surprisingly little discussion over the underlying issue, namely, the unconstitutionality of 44 U.S.C. § 501. Unless challenged in court, OMB is not likely to alter its view that § 501 violates our constitutional separation of powers by authorizing a legislative agency like GPO to control executive branch print buying. This means that Congress has only two real options for keeping GPO a centralized print procurement operation: (1) amend Title 44 to make GPO an executive branch agency or (2) file suit to enjoin OMB from proceeding. No one is proposing the former solution, however, which means that a court battle may be ensuing. In the meantime, individual legislators will continue to press the issue, as occurred last week when Rep. Steny Hoyer (D-MD), a JCP member, unsuccessfully attempted to add to one of next year’s appropriations bill an amendment aimed at stopping OMB from proceeding. The formal process for revising the Federal Acquisition Regulation (FAR) to incorporate OMB’s new policy is continuing, however, and a public notice and comment period is expected later this summer. We will actively monitor this issue and keep you updated as new events unfold. As always, our highest priority at ABC Advisors remains a fair, open, and competitive federal print market for all printers.



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