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GPO Targeted by OMB

July 2002
WASHINGTON, DC—The federal government's Office of Management & Budget (OMB) is seeking to put an end to the so-called monopoly on federal printing currently enjoyed by the Government Printing Office (GPO).

The OMB directive would eliminate GPO's role as a broker and allow private firms to bid for printing contracts directly from federal agencies and departments.

According to Mitchell Daniels, OMB director, opening the $500 million in federal printing to competition could save the government between $50 million and $70 million, the amount of money GPO charges to private printing vendors for jobs it outsources. Among the charges and discount benefits the GPO enjoys is a 7 percent premium on top of the cost of private printing, and 14 percent on lead times, which is charged to the federal department or agency; a processing fee of $7.50 to $15 per order; and GPO keeps prompt payment discounts, about 5 percent, from private printers rather than passing the savings on to the department or agency.

Exact billing figures appears to be a bone of contention. Andrew Sherman, GPO director of congressional and public affairs, told In-Plant Graphics that GPO reached revenues of just over $431 million during fiscal year 2001, and that its surcharge revenues checked in at $32.5 million, considerably less than the OMB's directive quoted.

In cutting GPO out of the equation, Sherman notes that agencies would still have to pay the fees, which would be higher in the absence of the economies of scale from GPO's term contracts. As for the prompt payment discounts, Sherman feels his agency earns it by paying vendors promptly from its revolving fund while the federal agencies can be quite slow to pay their GPO bills.

The GPO, which bids out about 85 percent of its work, also tends to the depositing of federal records in more than 1,300 libraries.

Many of the printers who procure jobs via the GPO are smaller shops, and the prevailing theory is that in having agencies and departments bid out their jobs, only larger printers with sales forces in a particular city will have access to these bids.

Ben Cooper, executive vice president for the Printing Industries of America, expressed his concerns regarding the printing procurement process in a letter to Daniels. Cooper wrote that, even with the fees, the GPO is "generally able to buy printing at the lowest possible price."

Cooper suggested several areas for possible change, including the development of printing and publishing plans as part of the federal budget process, as well as a plan for printing procurement within the executive branch that assures fair and open competition.

Cooper also noted that many contracts are presently awarded based strictly on the lowest bid, and agencies could find better overall packages through "best value" contracts.

William Gindlesperger, founder and president of ABC Advisors, a bid solicitation service, is confident that, in the end, smaller printers won't be shut out of government jobs. "OMB doesn't want to send all those little printers to the wolves," he says.

Gindlesperger feels the OMB will produce regulations that are fair to both the agencies and small printers. The GPO, he says, will reinvent itself and "come up with a methodology to better service its customers.

"OMB, GPO and the agencies all have their hearts in the right places and want to do the right thing," he adds. "In the end, the right thing will be done."


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