Cooperative Purchasing; appears to be on hold
By Staff -- Industrial Distribution, 5/1/1998
Newton, Mass. -- No news is good news when it comes to the Cooperative Purchasing Program. The program was repealed last year, but distributors are watching closely to make sure the effort doesn't get introduced again in 1998."We have our eyes open so that in no way, shape or form does it make its way back as an amendment or part of another bill," says Jim Anderson, vice president of government relations for the National Assn. of Wholesaler-Distributors. "It hasn't resurfaced in any way yet at this point, but this issue is not dead."
Under the program, which was slipped into a law meant to streamline bureaucracy last year, the General Services Administration would be authorized to open the Federal Supply Schedule to non-federal government agencies. The measure was repealed as part of an appropriations bill that President Clinton signed in October after NAW complained along with pharmaceutical and medical industry groups. However, lawmakers are expected to try and file legislation sometime this year to establish cooperative purchasing.
Industry leaders say the program would set up unfair competition and consider the repeal their major legislative success of 1997.
As proposed it would allow state, county and local governments to buy products directly from manufacturers at the same discounts enjoyed by the federal government. Distributors say that would create an unfair playing field and fear they could not compete with "most favored prices'' charged by manufacturers. Job losses and the closure of some distributorships is predicted if the plan is implemented. With Cooperative Purchasing, manufacturers would most likely become more directly involved in equipment training, maintenance and servicing activities.
According to Anderson, vice president Al Gore and some others in Congress are high on implementing the purchasing plan, which opponents say would turn the General Service Administration into a Walmart-like giant that would have negative effects on business across the country.
It was rumored that Cooperative Purchasing would be re-introduced last month, covering information technology, pharmaceuticals and possibly office equipment, but the bill was never introduced. Sources say that the Freedom of Competition Act may have been delayed if Cooperative Purchasing had been a part of it.
"We've been vigilant in looking for attempts to reinstate the program on a limited basis," says Bruce Clash, public affairs director for the Industrial Safety Equipment Assn. "In terms of our industry, we're not immediately effected, but we're still being vigilant because opening the door to one sector [could result in other industries being attached to it later]."
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