THE 'ARMYZON' EQUATION
In a high-volume office, where printer cartridges may be replaced monthly, the total savings for a year would be $1,672.20. Even if that replacement rate were halved to just six times a year, there would still be a savings of $836.10 a year for a single printer. But we are not talking single printers.
If we narrow the picture to just DOD, in the Pentagon alone there are about 10,000 printers. Let’s just say, hypo- thetically, that all of those printers are the same model. If so, and if each set of toner cartridges were replaced once a year, the savings would be $1,393,500. If the toner cartridges in each of those printers were replaced six times per year, the savings jumps to $8,361,000, and if they were replaced monthly, the savings climbs significantly to $16,722,000. Of
course, prices fluctuate, as does usage. Te idea here is not that DOD should stop buying from GSA and start buy- ing from Amazon. Te idea is that in an online marketplace where vendors could compete with one another for DOD’s business, there is a huge, untapped poten- tial
for savings—and this is just toner
cartridges. Tat marketplace exists today. It’s the Amazon Business platform.
SAVINGS, AND THEN SOME Savings to be had in this marketplace could be massive, but there also would be a variety of collateral savings. Tere are lots of ways these savings could accrue, from the small to the large. In addition to lower cost as the benefit of competi- tion, there are also the tax implications. But the government doesn’t pay sales tax, so purchases through Amazon Business
would be tax-free. Te Army has many warehouses, and while an e-commerce platform wouldn’t mean that it could get rid of all of them, there are real potential operational savings to GSA for no longer having to maintain warehouses stocked with COTS products. I have been very conservative in my estimations of cost savings here, with 5 percent as likely sav- ings on purchases, but it seems very likely that savings across the Army and DOD could increase significantly once the change happens.
In addition to those savings, such an e-commerce platform also would have workforce savings. No one would have to go to the GSA store to order purchases, then pick them up. Contracting officers would have more time to concentrate on higher-priority efforts, such as major defense
acquisition programs, which
currently take 2 1/2 years to move from request for proposal to contract. During congressional testimony on Dec. 7, the Hon. Ellen Lord, then the undersecretary of defense for acquisition, technology and logistics (and now the undersecretary of defense for acquisition and sustainment), set a goal of reducing that timeline to 12 months.
By authorizing Army-designated pur- chasers
to buy commercially available
items online, more time could be spent on contracts that help build a more agile and adaptive Army. Shifting from writing contracts for COTS products to contracts that support the Army chief of staff’s six modernization priorities, which represent the core of the Army’s mission, would save time and money.
OFFICE SUPPLIES ADD UP Printer toner cartridges—an item that the government buys regularly and in huge quantities— represent one opportunity for small per-item savings that can add up to big gains overall. One possible way the government could capture those savings is to purchase through an online mar- ketplace, like Amazon’s Business portal, where vendors compete to sell to the government. (Image courtesy of
Amazon.com Inc.)
THIS COULD HAPPEN NOW Te flexibility and agility for desig- nated personnel to purchase and receive commercial products through online mar- ketplaces like Amazon, Grainger, Staples
40
Army AL&T Magazine
April-June 2018
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