Multi-year contracting is not an answer for items that are purchased over the counter in a commercial marketplace.
Posted on 04/26/2013 10:39:35 AM PDT by dila813
Quick run down on budget management in the federal government:
1. Prior to the start of the year, you made a budget request 10% higher than last year's budget
2. At the beginning of the fiscal year you are given a budget target to spend for the year
3. During the year, if you are running short due to demand you put in requests for supplemental funds
4. As you approach the end of the year, if it appears you are going to still have money left. You have to spend it, you look for items that aren't perishable and have a long time for storage (great place to look are items you placed a large number of orders during the year, as in number of orders not number of items). This routinely happens in Republican Administrations, in Democrat Administrations it can be 2-3x what you would normally see. I believe this is because the Dems are poor planners and only have eyes for key projects.
Ok, Baseline budgeting
1. Prior year exceptional spending becomes part of the base line budget going forward (like billions of dollars in upgraded luggage and people scanners in airports)
2. .... etc... rinse and repeat leading to inflated budgets
Ok, Supply Chains:
... commodities like ammo are produced linearly throughout the year because the inventory is cheaper than having excess capacity to react to changes in demand
further, when orders come in, no one is going to turn down the order no matter how big, but since it was such a huge order it took away all this critical buffer inventory leading to shortages when the public demand picked up at the same time eliminating all their inventory in their distribution channels.
No grand conspiracy, just poor lousy government
The fiscal year starts in October and ends in September, this means this all started in September of last year and these shortages of ammo can go on for a year due to the tight capacity.
And yes, once upon a time I did this, it was my job and I hated it.
You are assuming they have no plans to deny us ammunition by legislating the industry out of business after they stock up.
Correct. There is no giant conspiracy. Breitbart has a good article debunking the ammo myths:
http://www.breitbart.com/Big-Government/2013/04/04/The-Great-DHS-Ammunition-Stockpile-Myth
They usually buy everyone a new computer...
With any other administration, I would agree with you.
True, I have to say there are different categories of funds.
Not all the money can go into new computers. That pile of money was quite limited.
The big bucks are in the operating funds.
But, I always had the best computer on my desk every September.
Very disappointed in US ammo makers selling so much to the DHS.
I will remember when things loosen up.
Shows he stupid the US ammo makers are.
They are still going to need ammo for themselves.
This is a lot more logical than most of the theories floating around.
Except, #4, that is the traditional baseline approach but most agencies now are going beyond baseline to exceed the rate of growth in order to get future budgets increased.
In other words, in traditional baseline budgeting, if they are budgeted to increase by $100, if they spend $90, their next budget is considered a $10 cut so they try to spend $100. This has evolved to go beyond the projected growth rate so if they are budgeted to spend $100, they try to spend $200 so their next budget will be increased by that amount (and so on and so on and so on).
I don’t blame them entirely, I blame this stupid process we have with the budgets of spend it or loose it mentality.
That’s the root cause of lots of government evil in the US economy.
No grand conspiracy....you just know they love it that the people believe there’s a grand conspiracy.
They have government supplier contracts that many have had for decades and if they don't fulfill those contracts, it will jeopardize their businesses. Some, even have entire divisions solely dedicated to fulfilling government orders. If they don't, it will collapse their business.
These aren't mom and pops who choose to give it to x or y depending on who places an internet orders. These are massive industries who make on the order of 50 billion plus rounds per year.
This might be true at an agency level, but in the trenches at your individual offices this isn’t true.
You request 10% more than last year, they give you a new budget that is at this level or near it to spend for next year.
Why 10%, that was the rule of thumb, no logic behind it.
The whole thing was stupid.
Sorry, but I don’t think that Obambi’s handlers have any intention of leaving our White House. They’ve probably sold every national secret to our enemies, undone any secrecy to anything that’s important to our security, and Lord knows what else they’ve done to our country.
And if an actual president comes in with his administration and finds out how much damage these morons have done, they’ll probably wind up in prison.
No, there’s a much larger plan . . . and I pray for us when it happens.
Yep, at agency level. Their ‘caps’ were pulled. This is whey the sequester was such a joke. For the past few years they have been jacking up their baselines higher and higher.
I don’t know what you are talking about, it isn’t contracting at all.
These are straight buys on contract for immediate delivery.
You can’t consider the money spent unless you actually take physical delivery of the item.
well, this was invisible to me, but I suspect this lead to even greater distortions in the marketplace.
I hate to burst your bubble but its not that benign. More likely its to keep ammo supplies scarce while gunning up for the inevitiable conflict with the American public.
7,000 full auto AR’s and 2717 armored trucks are not just to make sure all alloted funds get spent.
The is is not your daddy’s govt.
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