Cell Phone Services Show Broken Buying SystemTweet
May 8, 2013
Last month, Norman Dong from the Office of Management and Budget (OMB) was a presenter at the Maryland Association of Certified Public Accountants (MACPA) conference in College Park, Maryland. Dong’s presentation explained how the Obama Administration is working to be more efficient and cost effective. For example, he summarized ways OMB is improving federal financial management through administrative savings, reducing property usage, cracking down on improper payments to individuals and medical providers, and adding transparency. These were central themes in the President’s proposed FY 2014 Budget, too.
All of Dong’s charts and graphs show progress, absent one—Data Sharing and Analysis, which lays out the monthly and total cost of cell phone services for “one agency.” This slide (shown here) stated that “One agency pays 13 different prices for nearly identical plans!” Despite many efforts to reduce contract spending and institute more efficient purchasing practices in the military and the rest of the executive departments, this unnamed agency seems to be taking an undisciplined, scattershot approach to buying cell phone services. The chart showed that the agency buys 13 different plans ranging from $21 to $98 per plan per month, with total monthly costs between $100,000 and over $2 million. Throw out the high and low, and this agency’s cell phone plans still range from $39 to $64 per month for 11 comparable plans—all with over 400 voice minutes and unlimited text and data.
Why does this agency have 13 different cell phone plans for which it pays such varied prices that are higher than commercially available rates?
The one take away is that the government clearly is not leveraging its buying power and, as a result, is wasting taxpayer dollars. This example is the kind of “low-hanging fruit” waste that, if eliminated, would reduce the need for sequestration, hiring and pay freezes, and furloughs. Hey, Congress and White House: CAN YOU HEAR ME NOW?
I’m sorry we were disconnected, but HELLO! … This one example could just be the tip of the iceberg. How many other federal offices and agencies have this or similar convoluted spending habits? My calls to Dong went unreturned, but I am willing to accept a call with more information about this agency, or others, that are not operating with financial responsibility in mind.
Years ago, POGO wrote a letter to the Navy urging it to investigate approximately $591,000 in late fees paid on its utility bills. We never received a response. Last week, it was reported that the government is paying approximately $900,000 for empty bank accounts. And all of this is in addition to Congress buying stuff for the military that it doesn’t want or need and the military buying things that no one uses.
Call me crazy, but I think the government needs to take a lesson from the penny-pinching coupon users of the world and those of us who diligently check our bills and receipts to make sure they are accurate and paid on time. Instead, the government is disconnected from the sensible practices of the everyday consumer and is missing the call to save billions of tax dollars each year.
Scott Amey is General Counsel for the Project On Government Oversight. Some of Scott's investigations center on contract oversight, human trafficking, the revolving door, and ethics issues.
Authors: Scott H. Amey, J.D.
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