Posted on Aug 14, 2016
Why does the military purchase the same products at a much higher price than what's offered in the civilian sector?
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Let's take a look at Office Max: A swivel chair that costs $200 to buy online for personal use as a civilian costs $700 to buy online for military use.. What is the reason behind this?
Budget
Economy
DoD
Consumer Goods
Money
Posted >1 y ago
Responses: 11
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Another thing to look at is who is in charge of bids for contracts just as an example of wasted money. A group of DOD employees under direction of a Senate Committee are authorized to negotiate a contract with Military Supply Company A. Company A gives them an estimated price with some ups or downs potentially noted. The contract is approved and production begins. Then somewhere along the line production costs sky rocket and demand can't be met on time.
It is at this point that an investigation by DOD/DOJ with Congressional authority should be done. Did Company A purposely attempt to defraud the Government by increasing prices and delaying production? If no is Company A incompetent or just not capable of fulfilling the order? If yes then should charges be brought up and the contract negated and a new supplier such as Company B be found?
This doesn't happen though, we stick with out contracts and the devil we know. To be honest I was surprised when the Army declined to continue buying mullticam when they marked up the price and switched to OCP instead. Doesn't seem to be the way we usually do things.
Long story short though, everyone knows Uncle Sugar is good for the money and that likely they will pay rather than fight the mark up. We really need a high speed team of finance and legal to assist in these purchases for DOD and any of the branches in my opinion.
It is at this point that an investigation by DOD/DOJ with Congressional authority should be done. Did Company A purposely attempt to defraud the Government by increasing prices and delaying production? If no is Company A incompetent or just not capable of fulfilling the order? If yes then should charges be brought up and the contract negated and a new supplier such as Company B be found?
This doesn't happen though, we stick with out contracts and the devil we know. To be honest I was surprised when the Army declined to continue buying mullticam when they marked up the price and switched to OCP instead. Doesn't seem to be the way we usually do things.
Long story short though, everyone knows Uncle Sugar is good for the money and that likely they will pay rather than fight the mark up. We really need a high speed team of finance and legal to assist in these purchases for DOD and any of the branches in my opinion.
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Why does the military spend so much more than civilians for the same products and services? Simple. They're not spending their money. They're spending OPM (Other People's Money)
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ENS (Join to see)
Imagine if you will: if companies sold their goods at discounted prices to the DoD for a tax break. The military's spending wouldn't be nearly as expensive.. Does the DoD spend like no-other? Yes. However, it's not entirely their fault. If you're being charged 3x as much on a "cheap" product, imagine what they military is spending for products that would cost a civilian $100,000 or more..
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MAJ (Join to see)
Prices are fairly cheap when done competitively. Most standard items are purchased that way. It's when there is a sole source purchase, when the user didn't write their requirement correctly, or there is just so much money to be spent that they buy the best (most expensive) chairs ever.
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SPC (Join to see)
I kind of get it on certain items like a Tank for example. Not too many companies building those and not all of them we can deal with. However things like a desk, a chair, a computer. We shouldn't be getting screwed on stuff like that. It would be cheaper if DOD gave an individual Soldier dressed in civies the money and went and bough the desk chairs for their Battalion and hired private transport by themselves (under supervision) than doing it through government contract.
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Welcome to the never-ending loop of government spending... Wait, did anyone say F-35?
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