Spending for Spending's Sake; J. Semmens

Spendingfor Spending's Sake by John Semmens F ew of us are in a position to act as if price were no object. We weighprices againstval ues, so as to avoid wasting money. It would seem that this would be a usefulwayto control public spending. Unfortunately, govern ment's own procurement policies often forbid comparison shopping. Consider the recent case of a Federally funded study of the need for a new regional airport in Arizona. This expensive study was delayed. The delay wasn't due to doubts about the utility of the study, though doubts were certainly warranted. Neither was the delay due to spending cutbacks aimed at trimming the Federal budget deficit. The delay was caused by the fact that Arizona bureaucrats were attempting to factor in price as one of the elements for deciding whom to hire to undertake the study. The effort to consider price was relatively meager. In a list of factors to be evaluated, price was to have a total weight of 10 percent. Even this overstates the implied impact of price. Since bids are typically ranked as a percentage of the low bid, even a price twice as high would still get half the allowable points. The norm is for all the bids to fall within a few percentage points of each other.

Nevertheless, the possibility that price might account for as much as 2 to 3 percent of the weight in selecting a consultant to do this study was too much for the Federal Aviation Adminis tration. The FAA's procurement rules forbid bureaucrats from factoring in prices when select ing a consultant. The Arizona bureaucrats were Mr. Semmensis an economistfor the LaissezFaireInsti tute in Tempe, Arizona. 427 told they must choose a consultant without con sidering price. Eliminating price as a factor defies all logic. Surely, such a bizarre requirement demands an explanation. The only explanations offered, though, ranged from the stubbornly uninforma tive "we don't allow it" to the old standby of "this is the way we've alwaysdone it." These "explanations" explain nothing. They merely illustrate the intransigence of a bloated government determined to spend more money. Of course, the Federal bureaucracy does have the support of Congress with its own mandates for higher prices (like the Davis-Bacon Act, which forbids contractors on Federal projects from com peting on labor costs) and unnecessary purchases (like requiring the Navy to buy obsolete aircraft it doesn't want).

The Arizona bureaucrats resolved the issue of the regional airport study by re-advertising the project and selecting a bidder without regard to cost. The FAA's rules are followed by state bureaucrats because it is the only way to assure that Federal money will be spent in their state. The questions of whether a study was needed or whether taxpayers got the best value for their money were left unanswered. The only way to answer such questions is to abolish the government program. Determining the need for a commercial airport is a question the market is ideally suited to answer. If a study is needed, it would be worth it for a private business to fund it. A private business would be likely to carefullyweighpricesversusvaluesin determining the scope of the study and in selecting who to per form it. Usually government pretends to be cost con scious. Elaborate bidding rituals are conducted to buttress this pretense. Occasionally, though, the pretense falters, as in the case of the FAA's "no price" bidding regulation. This provides a clearer view of the real objective: spending for the sake of spending.

This clearer view should remind us that over extended government doesn't work very well. The sooner a majority of us realize this and stop depending on government to do what it is unsuit ed to do, the sooner we can replace its malfunc tioning parts with higher performing free market alternatives. D 428 The Big Nag by Donald G. Smith O n January 4,1977, I smoked my last cigarette. For anyone interested in fur ther details, it happened in Burbank, Cal ifornia, at precisely 11 A.M., and the cigarette was a Lark. It was tough going for a day or two, but I soon broke free, and it's been a long time since I have even wanted to smoke. I thought of this recently when I was in a public building and came across a big anti-smoking dis play that was a monument to the sloganeer's art. It was a pretentious, sermonizing, government sponsored presentation that scolded smokers thoroughly and told them of the evil consequences to be faced if they didn't mend their ways immedi ately.The effect it had on me was to make me want to light up, not because I wanted to smoke but merely to protest this government intrusion into personal behavior.