Competitive Bidding benefits.(COMMENTARY)

The Washington Times (Washington, DC), November 21, 2002 | Go to article overview

Competitive Bidding benefits.(COMMENTARY)


Byline: Daniel J. Mitchell, SPECIAL TO THE WASHINGTON TIMES

Tax reformers have many enemies, particularly those who believe the government should play favorites by putting special preferences and penalties in the tax code. But social engineering and industrial policy can take many forms. Left-leaning politicians and interest groups have now decided that politically unpopular companies should be denied the right to bid on government contracts.

The Homeland Security legislation, for instance, contains a provision designed to prevent companies from bidding for contracts if they have committed the horrible offense of rechartering in a jurisdiction with better tax laws (a process known as "inversion").

Pro-tax increase politicians apparently think companies should be punished for protecting the interests of workers and shareholders, but taxpayers will be the real victims. If fewer companies are allowed to bid for contracts, it is likely the government will have to pay more and/or accept lower-quality goods and services.

Another example is the union-led effort to prevent Worldcom from providing services to the government. The Communications Workers of America argues Worldcom should not be allowed to bid for telecommunications contracts because some of its former executives have been charged with fraud. Yet what does this have to do with whether the company should be allowed to win government contracts, particularly since the accused executives have been kicked out and are now being prosecuted by the government? The disgraced former executives who drove the company into Chapter 11 bankruptcy certainly won't suffer if Worldcom doesn't get any contracts. The real losers will be taxpayers, since they may get stuck paying more if there is less competition.

Lawmakers and procurement officials should resist all efforts to undermine the competitive bidding process. Government already is too big, yet it will become an even larger burden if fewer companies are allowed to compete for government contracts. Taxpayers will bear the direct costs, but there also will be economywide distortions since additional resources will be drained from the productive sector of the economy.

These anticompetition initiatives also create a terrible precedent. Health-food advocates might want to bar companies from providing food to schools, prisons and the military if they sell fatty food to supermarkets. Antismoking fanatics might want to prohibit tobacco companies from any type of government contracts. And peaceniks might want to bar companies from submitting bids for nondefense contracts if they also happen to produce weapons for the Defense Department.

Government contracting rules should not be neutral and fair.

Companies that make the lowest bid should get contracts if they satisfy the concomitant requirements for quality and dependability. …

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