Buying in a Businesslike Fashion— And Paying More?
Article first published online: 17 DEC 2002
2000 by the American Society for Public Administration
Public Administration Review
Volume 60, Issue 5, pages 421–434, September/October 2000
How to Cite
Besselman, J., Arora, A. and Larkey, P. (2000), Buying in a Businesslike Fashion— And Paying More?. Public Administration Review, 60: 421–434. doi: 10.1111/0033-3352.00105
- Issue published online: 17 DEC 2002
- Article first published online: 17 DEC 2002
The government, particularly the Department of Defense (DoD), is undergoing yet another wave of acquisition reforms, which are intended to bring commercial buying practices to DoD's purchasing operations. This research shows that, prior to these reforms, the DoD's buying practices were superior to commercial practices in terms of prices paid for a large number of electronic and engine parts. The research compares DoD and purchasing of more than 676,000 identical items costing more than $60 million with commercial purchasing of the identical items. It finds that the DoD's purchasing superiority holds even when purchasing costs are considered. The DoD achieved these results because it was already using commercial practices commonly followed by large firms: aggregating purchases, using cost data, and negotiating aggressively in markets with few suppliers. Some of the recent reforms will undermine the DoD's ability to exploit these common commercial practices and will raise the government's costs.