GPO Facing Formidable Challenges

These are stressful times for the Government Printing Office.

Since May the 141-year-old institution has been challenged, disparaged and ignored by the President's Office of Management and Budget (OMB)—despite receiving stellar marks in an audit of its financial statements.

Even the excitement of a new Public Printer seems dulled by the political bickering going on between the executive and legislative branches.

As Bruce James takes the reigns from departing Public Printer Michael DiMario, the 60-year-old presidential nominee steps into a battle where the first salvo has already been fired.

At heart is the ongoing controversy of whether executive branch agencies should be compelled to send their printing to a legislative branch agency—GPO. (Never mind that GPO's leader is appointed by the president.)

GPO cites Title 44 of the U.S. Code, Chapter 5, Sec. 501, which states: "All printing, binding, and blank-book work for Congress, the Executive Office, the Judiciary...and every executive department...shall be done at the Government Printing Office."

OMB counters that this violates constitutional principles of separation of powers and was ruled unconstitutional by the Department of Justice Office of Legal Counsel. Bolstered by this, OMB issued a memo in May in which it called GPO "a monopoly" and directed executive branch agencies to stop using GPO to handle printing and procurement.

This elicited an uproar from GPO, Printing Industries of America (PIA), Communications Workers of America and several library associations. All four testified against the plan before the Joint Committee on Printing (JCP) in July.

Heeding some of these cautions, OMB adjusted its plan and published its proposed new Federal Acquisition Regulations in the Federal Register in November. The overall focus, though, was the same: agencies would be permitted to buy printing directly from private sector printers, bypassing GPO's procurement system.

To demonstrate its conviction, the Bush administration advertised for competitive bids to print four of the five volumes of the president's 2004 budget, a job handled by GPO for more than 80 years.

In response, a General Accounting Office official penned a letter stating that "no funds are available to pay for the printing of the president's budget other than through the Government Printing Office." Bypassing GPO could lead to firing, jail time or repayment of the printing costs, the letter said.

OMB disputed the letter's warnings and vowed to continue on its course. (Note: At press time, OMB announced that GPO had won the bid to print all five volumes. GPO is doing the job for more than $100,000 less than what it charged last year.)

Congress Upset

OMB's actions have outraged many in Congress, who feel the office should make everything official by allowing Congress to repeal Section 105 rather than just declaring it unconstitutional and moving ahead.

"Across the board Congress is saying they don't want this done," says Andrew Sherman, GPO's director of congressional, legislative and public affairs. "There are constitutional processes for changing the law if the executive branch disagrees with it."

Sherman notes that Congress has placed language in each of the continuing resolutions (which fund the government) enacted since October barring the use of appropriated funds for printing procured outside of GPO.

"These continuing resolutions are adopted by overwhelming votes in both the House and the Senate," he adds. Putting the budget out for bid, he says, is sending Congress a message.

"What OMB is doing...is basically saying, 'We don't care what Congress says, we don't care what the law says, we're going to go ahead and do it our way,' " Sherman maintains.

OMB disagrees: "We're not going to comply with a law that's unconstitutional," explains Amy Call, OMB spokesperson. Backing her is President George W. Bush himself, who issued a signing statement when he approved continuing resolution H.J. Res. 111 stating that the language requiring agencies to go through GPO was unconstitutional and not binding on the executive branch.

Call further points to a letter (written the day before GAO's letter) from OMB's general counsel to GAO that lists precedents where presidents have identified laws that were unconstitutional and decided they were not binding on the executive branch. The letter says the president is not obligated to seek a judicial determination that a law is unconstitutional before declining to follow that law.

"We would love to work with Congress on this issue if they would like to move forward with this proposal," Call says. She points to several members of Congress who support OMB's actions.

As for new Public Printer Bruce James, a Bush nominee, Sherman says he has indicated he is quite concerned with what OMB is doing.

"Until the laws change, he's going to follow the law," says Sherman.

A lot is at stake for GPO. Since half of its in-house printing is executive branch work, if it were all to be taken away, the cost of the remaining congressional work would increase substantially.

Not Much Of A Reward

The OMB proposal is hardly a deserved payback to GPO for all the cost cutting measures it has undertaken over the past decade. During DiMario's term, staffing levels were decreased by 35 percent, bookstores were closed, union wage contracts were ironed out and more efficient equipment was added. In addition, GPO ranked number one in last month's IPG Top 50, its fifth consecutive year in the top spot.

GPO's years of experience with tight deadlines have saved many a customer—even OMB. For instance, part of last year's budget was contracted out, and OMB sent a PDF file directly to the outside printer. A technical glitch on OMB's end resulted in the minus signs dropping from the numbers.

The error was discovered after most of the job had printed, so GPO launched into action. It unpacked the documents, printed and inserted errata sheets along with stickers noting the problem, repackaged them and still got them delivered on time.

(Ironically, OMB overlooked its own culpability in the matter and included the budget mistake in a list of reasons backing up its decision to bid out the budget this year.)

Despite GPO's efforts OMB says agencies have complained of inefficiencies stemming from a forced reliance on a single provider. They say GPO won't let them communicate directly with its contractors. But the real issue for OMB is money.

"Basically we want to save the taxpayers money, and that's the bottom line here," insists Call. "GPO is charging exorbitant fees to do that [procurement] service."

She refers to the 7 to 14 percent premium GPO charges for procuring each job, which she says costs the executive branch millions each year. OMB's stance is that this money would all be saved if agencies bought directly from printers.

Nothing but fuzzy math, counters GPO. Agencies that bypass GPO will still have to pay people to handle procurement. Their salaries will take the place of GPO's fees. And agency procurement programs will not be sophisticated enough to maintain the same level of competition among outside printers that GPO achieves. Nor will these agencies benefit from the economies of scale of GPO's term contracts. Thus, GPO insists, the OMB plan will greatly increase taxpayer costs. Others agree.

"It's hard to look at the system that OMB has proposed in the Federal Register and see significant savings to the taxpayer," states Ben Cooper, PIA's executive vice president for public policy.

PIA has been a strong voice in this controversy—though one that has appeared to send mixed messages. In his testimony before the JCP in July, Cooper struck out at OMB's plan:

"The solution proposed by OMB is not likely to serve the taxpayer well," he said. "Efforts to move procurement to the executive agencies will only result in duplication and thus more cost...The proposal does not serve the printing industry."

Recently, though, PIA put out a press release praising OMB's proposal and insisting it "did not oppose" the original OMB initiative. This praise, Cooper says, was due to the "significant changes" OMB made since its first version. Specifically, the revamped proposal limits in-house printing, promises an open procurement system and implements "best value" procurement.

Still, Cooper says, the proposal is not perfect.

"There remain some problems with the proposal," he says.

Sherman certainly concurs with this. Aside from the legal issue, he says, it just doesn't make sense to dismantle GPO's well-oiled procurement system and distribute procurement throughout the agencies.

"You don't want to take apart a function that's operating efficiently and break it up to operate inefficiently," he says. "If you were to come into the government and find a widely distributed system...anybody's first instinct would be...'We have to consolidate this, eliminate wasteful overlaps and duplication of effort and echieve economies of scale.' That's Public Administration 101."

OMB has procurement staff but not printing experts, he says. It would need to hire print procurement specialists.

Call disputes this notion.

"These agencies...have very qualified procurement experts," she says, adding that if they are sophisticated enough to procure military aircraft, they can certainly buy printing.

And besides, executive agencies will still be allowed to use GPO for procurement, points out Cooper.

"GPO will still be very much part of the procurement system" he says. Also, agencies will not necessarily have to start their own procurement programs. He notes that the Department of Defense already has print procurement professionals in addition to its extensive in-house printing capabilities. A lot of executive branch work may get handled through these people.

This presents a serious dilemma, though, insists Sherman. People should be concerned when control of government information is handed over to the military.

"That is not what you want to have as a cornerstone of federal information policy," he observes.

A Disgruntled Minority

Where did this controversy start? Ben Cooper feels the spark that ignited the OMB proposal was the dissatisfaction of a "vocal minority" of executive agencies that felt GPO's past rigidity made it hard to deal with. And though GPO has changed, he says, it hasn't changed enough.

"If the GPO were providing federal agencies efficient service at a cost that the agencies couldn't match, this wouldn't be an issue," he says.

Improved GPO customer service was one of the main reforms he stressed in his JCP testimony, and he hopes the challenge to GPO will push it toward this. GPO insists it provides strong customer service, with a 95 percent on-time delivery rating for procured printing; a 1998 review found "universal support" among agencies for its procurement program. Cooper counters with a simple observation:

"If your customer's happy, why's your customer trying to leave you? The 'law' shouldn't be the reason you get customers to stay with you," he notes.

Cooper sees the OMB plan as the first step in reforming GPO.

"The GPO system as it stands now may not be the best model to move forward with," he believes. "For the long-term benefit of the printing industry are we better of with GPO as it is today or are we better off with a reformed system?"

Still, he stresses, he is not against GPO.

"I think GPO is unfairly maligned by OMB and...by a lot of people," he continues. "I think they really do a good job. However...changes need to be made in the GPO system."

For one, he wants GPO to react more to industry trends.

"Why are we perpetuating or supporting a low-bid system like GPO has? What we ought to be doing is encouraging the government to buy printing...similar to the way printers sell printing to the private market."

He refers to the concept of "best value," which awards printing contracts not based on the best price but on the best deal. Printers offer various packages of services, and best value procurement takes these into consideration. OMB's proposal has incorporated best value procuement.

Sherman agrees that using best value standards offers some benefits, and GPO has been looking into incorporating them. Still, after discussing best value with customer focus groups, he says, "The response was overwhelmingly luke warm."

Sherman goes on to point out the down side of best value.

"It injects a degree of subjectivity and judgement into the contract award process," he notes. It also makes contract disputes hard to resolve. And though the extra services some printers offer may create a good deal, what if they are not part of the government's requirement for that job?

He also takes issue with the idea that GPO runs a low-bid system.

"We don't always award based on the lowest price," he declares, adding that more than 30 percent of contracts go to "other than the low bid."

Effect On Small Printers

Enmeshed in this controversy is the fate of the nation's small, regional printers. Last year small businesses received 77 percent of the 148,000 printing contracts awarded by GPO. Under the OMB plan, agencies would not even have to put jobs under $2,500 up for bid—they can purchase them locally with a credit card. GPO says 80 percent of its orders are valued at $2,500 or less. (Jobs exceeding $2,500 must be posted on www.fedbizopps.gov, the executive branch's procurement site, which is not print-specific.)

Though in his JCP testimony Cooper aired his concerns with this—small businesses lack the staff to sell to individual agencies, so large printers with government sales forces will get all the work—he is now trying to look at it from all sides. For example, he says, if you are at a military base in Oklahoma and you have a $1,000 job, what's more practical, going to a local printer or through the GPO bid system?

"Is that the best use of your time as a contracting officer?" he asks.

PIA is still discussing this issue, he adds. One concern is that agencies will continually send work to a single printer without looking around for the best price.

But even so, he says, things will be no worse for small, remote printers under the OMB plan.

"GPO doesn't inform those printers now anyway," he says. "Private bid services help keep those people informed."

Not so, says Sherman.

"We post the jobs on the Web," he notes. "We also notify people off our bid list." That list, he says, has more than 16,000 printers on it.

Despite all that's going on, executive agency customers are the ones who will determine what actually happens. Sherman says the interagency council of executive branch customers that meets regularly to advise the Public Printer has discussed OMB's proposal.

"We don't sense any great support among this group for what OMB is doing," he reports.