The headline in the Washington Times last October was, to say the least, provocative: "GSA Plan to Shut Warehouses May Put Blind Out of Work."
But as is so often the case, that simple headline didn't do justice to the complex story behind the General Services Administration actions and their effect on a federal program aimed at steering government contracts to blind and other disabled workers.
GSA Administrator David Barram's decision to close eight Federal Supply Service warehouses, announced last summer, did have the potential to throw at least some of these workers out of their jobs, because the warehouses stock goods they produce.
Barram has since agreed to reevaluate his decision in light of concerns from the union that represents the 2,000 warehouse employees and the agencies that employ blind and disabled workers. But changes in the way government agencies procure goods began taking their toll on the program for disabled workers years before GSA made its warehouse decision.
The federal marketplace has changed dramatically since the mid-1990s, when Congress and the Clinton administration agreed to loosen the formerly rigid rules of procurement. Agencies were encouraged, for example, to let their employees use government purchase cards to make relatively small purchases of supplies from a variety of sources, rather than relying only on the sometimes cumbersome process of getting items through GSA that are stocked in the warehouses.
The Clinton administration set a goal of having government buyers use charge cards for 90 percent of purchases under $2,500 in fiscal 2000. In fiscal 1997, charge cards accounted for just 55 percent of such purchases. The explosion in purchase card orders, along with other factors such as the increasing use of GSA's supply schedules, have reduced orders coming into GSA's warehouses, according to the agency.
The advent of procurement reforms such as the purchase card has improved the quality of life for most of the federal workforce, but for the blind and disabled, such reforms are presenting new challenges, said Beverly Milkman, director of the Committee for Purchase From People Who Are Blind or Severely Disabled, who is retiring.
The committee Milkman is leaving operates the Javits-Wagner-O'Day (JWOD) program, which harnesses government's purchasing power to buy goods from blind and severely disabled workers. Those goods are stored in federal warehouses and distributed to government buyers who, by law, must purchase certain supplies through the JWOD program.
The ability for any federal employee with a purchase card to make direct purchases removes a level of accountability that previously resided with procurement specialists, Milkman said. For example, the average government credit card holder may not be aware of their obligation to buy mouse pads through the JWOD program.
According to Milkman, the recent launch of JWOD.com, a direct source for buying JWOD products online, will help alleviate the effect of lower warehouse sales. Given the effect of procurement reforms, the officials who operate the JWOD program are trying to reduce their reliance on the warehouse system.
"Absent removing credit cards from federal employees hands, I'm not sure how the GSA depot system can survive," Milkman said.
Frank Pugliese, commissioner of GSA's Federal Supply Service, agrees that changes in federal procurement have had an impact on GSA's and JWOD's business. "It has transformed the way people go about filling their needs," he said.
The old adage, "be careful what you ask for because you might get it," is at play, Pugliese said. When the government implored its workforce to start making smarter purchasing decisions, people listened and responded overwhelmingly.
But government buyers have to remember their responsibility to buy through the JWOD program, Pugliese said. "The law is still on the books-it was never a part of procurement reform to say 'disregard all the rules,' " he said.
Credit cards alone cannot be blamed for the dying business of depot distribution, Pugliese said. But the trend away from warehousing exists, he said. "When I look at our numbers I'm reminded of it, unfortunately, every day."
According to Pugliese, the downward trend is continuing. The most recent depot sales figures for October, November and December of 1999 are down compared to the same time last year. "A lot of it has to do with dramatic changes in the way people are making purchases," he said. The typical federal purchaser is getting a lot more savvy about comparison shopping, he noted.
According to Eben Townes, a senior vice president at Acquisition Solutions Inc., a Chantilly, Va.-based consulting firm, purchase cards caught on so fast that there was hardly time to educate the federal workforce of their responsibilities. "Purchase cards made procurement easy and quick, but in the process sometimes made people forget the fundamental things," he said.
As for the future of federal warehouse distribution, Townes thinks it may follow the lead of the private sector, where companies like Dell Computer rely on just-in-time delivery. That means federal employees "for the first time, are being confronted with job security," he said.
Phil Kete, a spokesman for the American Federation of Government Employees, says the union is indeed "worried for our members' jobs. Technology changes, and the union's job is to at least minimize the pain to the current employees."
But Kete disagrees with the notion that the GSA depot system is a dying business. A lot of organizations, including e-commerce businesses like retailer Amazon.com, have warehouses-it's not an either-or situation, Kete said. The government purchases a huge amount of goods and services, some of which can most efficiently be bought in ways that require warehousing, and some that can't, Kete said.
"At the moment, we have still not seen any evidence that the GSA warehouse system is obsolete," he said.
"We're not saying keep all the warehouses open for the next 100 years, but for the foreseeable future it makes sense to keep them open. Things could change in a couple of years," he said.
Milkman sees the handwriting on the wall for the warehouses. "In the longer term GSA isn't likely to have a depot distribution program for common supplies," she said.
Given that, historically, agencies have bought JWOD products, warehoused them and then disseminated them, the JWOD program will need to start brokering its own deals with commercial entities, Milkman said. "That's a whole new ballgame for us."
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