WASHINGTON -- Small businesses and U.S. taxpayers would benefit from a bill in Congress requiring competitive bidding on military spare parts said to cost up to $7 billion a year too much.
House members passed the measure unanimously by voice vote Monday. A similar bill has passed the Senate Small Business Committee and awaits Armed Services Committee consideration.
The House bill opens the $15 billion-a-year spare parts market for Defense Department projects to small businesses shut out by prime contractors who often charge many times the worth of an item in administrative costs.
'The public has reached the end of its rope,' Rep. Barbara Boxer, D-Calif., the bill's sponsor, said. 'They will no longer tolerate this type of abuse.'
Less than 10 percent of the military's spare parts are bought in open competition, she said.
'Having come from local government where everything was put out to bid, I was shocked,' said Mrs. Boxer, a former Marin County, Calif., supervisor.
For example, the federal government paid more than $9,000 for a 12-cent wrench, $16,811 for a $6,310 jet engine ring and $850 for a $25 bracket, Mrs. Boxer said.
The Navy spent $436 for a $7 hammer and the Air Force paid $1,118 for a 26-cent plastic stool cap, she said.
Overhead costs, handling charges and administrative fees tacked on by prime contractors and other single suppliers boost base cost many times over.
The Boxer bill requires all major procurement centers to have a representative of the Small Business Administration and four technical assistants to determine if a spare part can be bought competitively or only from one supplier.
Spare parts procurement codes, which tell the buyer where to purchase them, would be reviewed to determine whether they could be coded 'G' for open competition, as most currently are not.
Technical experts would modify, adjust or change spare parts codes so the items could be broken out for competitive buying.
One procurment representative working with a technical assistant could save up to $5 billion every three months, Mrs. Boxer said.
'The answer is good old-fashioned American competition, open to all,' she said. 'If the big prime contractor wants to get in, they're welcome, too.'
The General Accounting Office suggested in a report that increased competition could save up to 70 percent of the cost of spare parts.
