Bill introduced to reduce Puerto Rico gov’t procurement spending
SAN JUAN — Amid the current fiscal crisis, the Puerto Rico House of Representatives passed Wednesday a measure to establish that the executive branch procure goods and services at the most reasonable market prices.
House Bill 1041 provides that the General Services Administration (GSA) resort to public auctions when a purchase exceeds $100,000. The current law establishes a $195,000 threshold.
“With this bill, I seek to establish the mechanisms needed to provide the government with the faculty to achieve fiscal savings,” said New Progressive Party (NPP) majority Rep. Joel Franqui, the measure’s author. “With this bill, we expect savings of millions of dollars.”
The bill, which was passed unanimously, says the government spends roughly $300 million annually in the procurement of goods and services, adding that “About 80 percent of the total is attributed to the value of the good or service acquired; while the remaining 20 percent, which in this case equals $60 million, is attributed to the government cost for carrying out the purchase process.”
The bill also proposes that the GSA, which establishes public policy for agencies’ acquisition of goods and services “at the lowest cost,” should institute a “pricing policy for suppliers.”
“The [GSA] will determine if the price is fair and reasonable, taking into consideration competition in the market, information on the reasonableness of the price according to price catalog or market price, and a price analysis based on the acquisition of similar products in the past,” the bill reads.
Franqui said acquiring goods and services at the government level is more expensive than for a regular consumer because while an individual consumer purchases one item, the government purchases “thousands at inflated prices.”
“For example, a pen can cost a consumer $1 and the government can end up paying $5. I have always said there are ways to save that don’t involve taking from citizens or inventing more taxes to be able to economize in government,” he said.