In June a small notice was made in the Federal Register that caught the sharp eye of Murray Vester, President of BOSS Office Products. Boss has stores in Glendive, Miles City and Sidney. The notice was a call for comments on a proposed rule prioritizing sources of supplies and service for use by the federal government (FAR Case 2009-024). This month in a letter obtained by The Examiner Vester told federal officials the system proposed in the notice hurts his business. The rule effectively wipes out most small business from supplying to the federal agencies, a change that began a year ago according to Grady Taylor, spokesperson for the TriMega Purchasing Association, of which BOSS is a member.
Taylor explained to The Examiner that the federal government is the largest office supply consumer in the world. Additionally this new process is also likely to affect most other federal purchasing. In fact, the notice in the Federal Register affects purchasing for all General Service Administration (GSA), Department of Defense(DOD), and National Aeronautics and Space Agency (NASA) purchases. Specifically the register notice says “DOD, GSA, and NASA do not expect this ruling to have a significant economic impact on on a substantial number of small entities.” Taylor says that is not true.
Historically, the federal government purchased from blanket purchase agreements from 550 companies across the country. That meant that Senator Jon Tester’s office could pick up staples and reams of paper from BOSS keeping the funds in the local economy rather than sending to to a national big-box store and waiting for the supplies to be shipped in. A year ago in what the office product industry considered a pilot project, the list was narrowed down by the GSA to just 15 vendors. None are in Montana or North Dakota. Five current vendors are members of TriMega, previously 150 members sold to the federal government. Since then Taylor says five dealers have gone out of business and others have had layoffs as a direct impact of the narrower list of federal vendors. Taylor also says pricing has become an issue. He gives the example of rubber finger tips used by the census bureau and post office workers. Prior to the change last year, members of his organization sold them for $1.40 per dozen. After the change the federal agencies have been forced to pay over $8.00 per dozen.
Vester’s Letter to Hada Flowers, Regulatory Secretariat of the the United States General Services Administration said “From my perspective as an independent small dealer who has successfully sold office products to federal customers over several years, using a variety of procurement options, this rule is both unnecessary and damaging to competition from small businesses throughout our industry. As a small independent, we have successfully sold using a schedule contract and the open market bid process. Like many small independents in our industry, our federal market business – built up over many years – has been dramatically and abruptly curtailed as a result of the latest federal Strategic Sourcing Initiative.”
Senator Jon Tester’s Glendive office has been one of Vester’s customers. Andrea Helling in Senator Tester’s office said “Jon has made it one of his priorities to get the GSA to consider local businesses when awarding contracts. In fact, that is what prompted Jon’s series of Small Business Opportunity Workshops, where he has connected numerous Montana small business with federal agencies. Jon also leads by example, which is why his office buys supplies from local small businesses, like Boss Office Products in Glendive.”
Vester’s letter says that the rules are “NOT what the GSA or other federal agencies have advertised when encouraging companies like my own to enter the federal market.” Vester and other TriMega members are also disturbed that an Initial Regulatory Flexibility Analysis has not been put in place and published as required under the Regulatory Flexibility Act. Taylor warned “This is misguided. It hurts dealers, some fatally.”
To follow the rule making process on this issue, visit http://www.regulations.gov and enter 2009-024 in the search box.