Best Value Versus Protectionism

(MoneyWatch)  The Australian Broadcasting Company (ABC) reports that Australia only has one domestic manufacturer of safes and vaults. Obviously the government and defense forces of that country purchase quite a few of those items to store classified materials and weapons. API is concerned that the government is turning to external sources of these items as they are cheaper. Most governments try to contract with competition and best value. If there is only one domestic source then a foreign company must participate as well to get competition. They may be cheaper as their labor and operating costs could be lower. This puts the government in a bind. They can favor the domestic source to preserve that industry or get a cheaper product and save the taxpayers money. Unfortunately for government contracting officers the legislators of countries tend to want both at the same time. This is why EADS had to be able to bid on the KC-X tanker and has substantial support for continuing in this competition. Only Boeing and EADS could bid on the contract and competition was required due to the Air Force and Boeing rigging the first attempt with the planned lease of the 767 aircraft. Unless Australia can develop a second domestic source for some products these kind of issues will keep arising and there is no easy solution.