Amazon-opoly: Jeff Bezos May Be About To Control $53 Billion In Federal Government Spending

Tyler Durden's picture

Authored by Brian McNicoll via The Daily Caller,

Jeff Bezos spends a lot of time directing the newspaper he owns, The Washington Post, to criticize President Donald Trump in every way imaginable. But for some reason, the federal government cannot stop giving Amazon — the retail empire Bezos also owns — a slew of taxpayer-subsidized subsidies. Now, Congress is considering a new federal purchasing plan that could result in Amazon’s most lucrative government handout yet.

The technology giant is no stranger to sweetheart deals that line its pockets at taxpayer expense. The U.S. Postal Service, for instance — which has lost $60 billion since 2007 — handles last-mile shipping for two-thirds of Amazon’s deliveries. This means overtime for workers and a good incoming revenue number on the USPS’s balance sheet, but it’s a financial bonanza for Amazon.

According to media reports, USPS delivers Amazon packages for $2 per package — even though it costs USPS $3.46 per package to make these deliveries. And that’s before you get into the $200 million three years ago for 270,000 handheld scanners to process the packages or the $5 billion or more to replace USPS vehicles with ones better suited to carry Amazon’s packages.

But even this cozy arrangement pales in comparison to the deal Amazon is now trying to push through Congress.

Buried deep in this year’s defense spending bill is a provision that would move Defense Department purchases of commercial off-the-shelf products to online marketplaces.

A summary of the proposal, which was inserted into the legislation by House Armed Services Committee Chairman Mac Thornberry, argues it is needed to save money over the burdensome and expensive current system.

It pointed to a report from the Inspector General of the Government Services Administration that found some IT equipment could be purchased more cheaply on the open market than through the GSA’s “schedules.”

In response, the plan calls for developing an online marketplace platform through which federal agencies can buy products such as paper clips, bottled water, computers, office furniture and more — just as any business would do.

But it also calls for this platform to be designed to “enable government-wide use of such marketplaces.” This means the government is looking only for a procurement and supply management firm big enough to offer multiple suppliers for the same product with constantly changing selection and prices and serve the entire U.S. government.

That leaves just one likely possibility  - Amazon Business - for basically monopoly control of $53 billion in federal purchasing, much of the supplies for which comes from no-bid contracts.

Amazon provides a platform for e-companies to sell through to their own customers. It receives 15 percent to 20 percent of the proceeds from such sales, which means a huge revenue stream for Amazon for doing basically nothing while vendors are forced to cough up as much as half their margin.

A government deal with Amazon sets up opportunities for abuse, not to mention control over suppliers. Amazon would get to collect an enormous amount of data on agencies, which could be used to identify top competitors and drive them out of the federal marketplace with increased fees or other rules changes.

And it means any discounts that can be negotiated for the bulk rates of purchasing the federal government does would flow not to the government and taxpayers — but instead into Amazon’s pocket.

Amazon Business, which only started in 2015, already has 1 million customers and $1 billion in sales, and its revenues grew 34 percent in the last year. Adding federal procurement would effectively drive out all competitors for its business service.

It already is moving into position to do this at the local level. In January, Amazon signed a contract with U.S. Communities, a coalition of 90,000 local governments, to provide them with an online marketplace for office supplies and other goods.

The fate of the proposal is unknown. It is in the House version of the defense spending bill but not that of the Senate. This will be resolved in a conference committee, and one solution is to try it as a pilot project before committing the entire government to it.

There certainly ought to be a breathing period before yet another government agency signs yet another deal to use tax dollars to further enrich one of the richest men on the planet.

It’s beginning to get suspicious.

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spieslikeus's picture

We ain't in THAT club.....

Badsamm's picture

I don’t trust anything with that little hair

max2205's picture

Fuck small businesses! 

GUS100CORRINA's picture

We all need to remember the following quote because it is TRUE for every single HUMAN BEING who has ever lived or who will ever be born.

ABSOLUTE POWER CORRUPTS ABSOLUTELY!!!!

This TRUTH was one major reason that GEORGE WASHINGTON did not want to be POTUS for a third term. It should be recognized that "OBOZO" was putting in place mechanisms to allow him to take over POTUS office for a third term. I KID YOU NOT!!!! It was a very close call. Of course, the MORONS of the DEMOCRATIC PARTY thought it was a good idea!!! What a nightmare that would have been!!!

Jeff Bezos really scares me because his CHARACTER, CONVERSATION and CONDUCT have be questionable at times.

TeethVillage88s's picture

Night Terrors are very common,... I assumed this morning that Hilary is the worst and positioned for Impeachment with some lame-ass bull-shit. But who else could plot US Presidential Coup & Treason?

- Barack Obama
- George Soros, Technocrats, Globalists, Europhiles, Wealthy Elites
- Tech Leadership, Musk, Zucker, Schmidt, Cook, Monarchies in Boards of Directors, Royal Families, ?

HowdyDoody's picture

Perhaps he could take control of the US Navy ships. He could hardly do worse.

Another US ship, the USSN Benfold, rams a Japanese tugboat.

https://z5h64q92x9.net/proxy_u/ru-en.en/https/colonelcassad.livejournal....

Escrava Isaura's picture

Amazon. It gets very interesting. Why?

Because Amazon is the best in what they do. I mean, not in every single thing, their movies are good examples. Anyway, an amazing company.

So, what happen?

They succeeded. Starting with an idea and no money and became a giant at the free market with their innovation, service, low prices, and so on.

Now they’re being criticized by the right wingers. It makes no sense, because Amazon did exactly what the market expected from them.  

 

lil dirtball's picture

> So, what happen?

> They succeeded.

Well ... sorta. He merely used the same apparatus (((set up))) over a century ago that allows the MIC to do what they do. Really, Amazon, MIC, Alph. ... etc., it's all the same anyhow.

See also: Eli Whitney

espirit's picture

COTS. I like that.

Several questions though. What are the hazmat fee's on RPG's, and will they provide quantity discounts?

astitchintime's picture

Well, it's pretty easy to succeed when you hold a monopoly AND you are a 'favorite child insider'.

I say, where are our duly-elected lawmakers?  Amazon is CLEARLY a monopoly and should be reigned in.  After all, the US Government did not hesitate to break up 'Ma Bell' telephone when they monopolized the market.

BarkingCat's picture

Only reason Amazon succeeds is because they had been running at a loss due to money they're able to generate from Wall Street stock sales.

It's now an old and tired joke but Amazon loses money on every sale but they plan on making it up on volume.

Escrava Isaura's picture

It is what it is.

Life is complicated at best, a tragedy at its worst.

 

cheeseheader's picture

Umm, does B have to actually be around to collect his (amzn's) taxpayer subsidies, or is it like the oscar's when the host accepts on behalf of the absentee recipient?-- and they deliver it to the house the next day?

 

What if the subsidies disappeared...or the other half of the equation?  What then?

Endgame Napoleon's picture

Those are not small businesses, competing with Amazon for the government deals. They are big businesses that drove all the little mom-and-pop office supply stores out of business.

GreatUncle's picture

No longer can federal government by from local people to support their businesses.

Will the person in India and China through an intermediary be able to supply the goods though ... because if so it will be outsourcing abroad on steroids.

I just purchased a 3D printer, US front company but it came from China.

Crazy Or Not's picture

...and this is called free market economics! 
Beats me how Anarchic Libertarians get such bad rep. with fuckers like this about. 

Rick Cerone's picture

Without rigged elections, this could not happen.

ParticularlyStupidHumanoid's picture

But you know it's completely foolish to believe reforms are possible.

SgtMilstar's picture

EBay to the rescue!   

ParkAveFlasher's picture

Amazon's marketing model is fascinating but the execution of their pricing and distribution is phenomenonal.  Ebay is more of a classic online message board customized for auctioning.  Amazon is truly frightening, in what they do, and what they can do, and what they may do.

Crazy Or Not's picture

For the Lazy:
 The Morlocks and the Eloi have something of a symbiotic relationship: the Eloi are clothed and fed by the Morlocks, and in return, the Morlocks eat the Eloi. The Time Traveler perceives this, and suggests that the Eloi–Morlock relationship developed from a class distinction present in his own time: the Morlocks are the working class who had to work underground so that the rich upper class could live in luxury. With time, the balance of power changed - the surface people no longer dominating the underground dwellers but on the contrary, becoming their livestock.

Anteater's picture

I'm fairly sure the Trump-Kushner version of the movie has the

Eli taking advantage of Morlock labor, AND eating the Morlocks.

WINNING!! ORGAN HARVESTING!!

Gorgeous's picture

I don't like Bezos' politics but he has a great business model, hires smart people, and works them hard.  Every business should.

Anyone who knows how convoluted, slow, and expensive it is to order stuff through government purchasing departments will welcome this.  Schools should be next. 

TeethVillage88s's picture

GSA isn't that bad. The move to 'Schedules' is modern move and sets a kind of bench mark for performance. The system often allows for more flexibility than GSA or others will ever admit. For Instance when a similar product is better or wanted or immediately available... many offices are able to justify a kind of up-grade or to go commercial vs govt.

It is not black & white, Business Units/Offices are given new options and innovations at least back 10 years or much further back.

Anteater's picture

The moment Bush-Cheney forked into office, GSA sent a top

administrator to all the overseas bases, directing all of us in

procurement to direct all our orders to Strategic Procurement

Services, probably a Rumsfeld joint. "SPS will have a standard

8% markup, and unify orders and base-jutting to minimize S&H."

She's your standard pants suit Mil.Gov middle-manager drone.

OK, well, here's the thing. That was OUR job. That was our own

profit center, to take a base command approval, then supply it

at the lowest possible cost, for the spread. Right?

Now here comes SPS, in the middle, and not only were they

coming in with higher markups, but their quotes were higher

for exactly the same shit we used to buy. But then they got

creative with off-book overseas shipping costs. We had a van

of products from Seattle that went to the SPS approved

vendor in Georgia, then back across the country to Long Beach, 

then to an approved reseller, then to ANOTHER reseller, then to 

ANOTHER Reseller, before we received the shipment, that should

have drop-shipped directly from Seattle.

Pentagon procurement is totally corrupted and sick since the

Pentagon Coup of 9/11 destroyed the Congressional records of

investigation at the Pentagon. The mandatory Y2K backup of

those investigations stored in a NJ data warehouse were then

'accidentally erased',and from,9/11 onward, Pentagon has been

a Robert Mugabe grift-fest approaching a $1T a year bust-out.

Burn MIC to bone ash, before MIC burns all of US to bone ash.

It's that simple.

 

 

TeethVillage88s's picture

Wow.

"Pentagon procurement is totally corrupted and sick since the
Pentagon Coup of 9/11 destroyed the Congressional records of
investigation at the Pentagon."

yes. $1 Trillion is correct. And is very powerful when political appointees call the shots... er and 40 Navy Admirals are influenced by a contractor!

Truman is in grave praying for the end.

Endgame Napoleon's picture

He also employs a lot of different types of workers: from programmers to customer service and warehouse people. He pays a little more than some of them. Like you say, he believes in hard work, apparently applying it to everyone, not just those without children. These businesses are getting huge, though, but to say that Amazon is different than Wal*Mart and all the other brick-and-mortar behemoths is just not true, Small businesses were decimated just as much, if not more, by the brick-and-mortar big boxes. It seems like the government needs to save money where it can. Schools need more access to affordable technology products so that they can teach skills that might actually lead to gainful employment, wherever they can get it without the extra expense.

Utopia Planitia's picture

How about cleaning up the govt procurement process instead of just handing the entire enterprise over to AMZN?  Wouldn't that be the American way?

AMZN is transparent in its motive to drive every last competitor out of business, by selling at a loss.  They can only do that if they have a bunch of well-endowed backers who want that objective.  Once that takes place then you will have a procurement Hell that far exceeds the mess in place today.

Be very, very careful what you wish for.

VWAndy's picture

Fiat magic is all that keeps these clowns on top. Its got nothing to do with merit.

ParticularlyStupidHumanoid's picture

And how might one, through elections, within 100 years, clamp down on such monopolies as Amazon, Microsoft, Intel, Google/Alphabet? Can anyone say elections work? Surely there is time for an alternative. Such billionaires are the advocates of Communism, as this is what feeds them. Fascism alone has the means to save America, fight back against the plague of degenerate behavior and indoctrination, prevent deflation by minting an authentic dollar, defend America from overseas predators physical and finanacial alike.

VWAndy's picture

 Team Truth and Love is going to catch this cat on a level field along with all his friends.

TeethVillage88s's picture

So GSA Contracts & USPS?

Why not the moon or a military service or NSA or Geospacial Agency or RSO (US Satellite Intel Agency)?

Seriously. How about US Navy Transportation or Surface Shipping Command... Transcom for the US Army.

ParkAveFlasher's picture

They would likely do it cheaper.  But they'll just sell the already-built intelligence / consultancy for that govt cream. 

TeethVillage88s's picture

Well with access to govt employee IDs, the contractors have basis for either black mail (investigations & operations against people that want to keep wife, family, job, career)... and coercion against govt employees or service members. What else? Permanent capture of Meta Data maybe of Govt Employees. Tracking of critical-core staff, military staff. Honey Traps on Critical-core staff?

Cheaper? double the price with fewer employees has been the military success so far.

But Military doesn't have enough ships to go to regional war like Iraq, Desert Storm, so they use Merchant Marines... and Use Contractor, Pan-Am Planes, for Passenger transpo... going back to Gulf War at least.

Edit1: I mean they charge 2x the labor rate or pay 2x the labor rate... performance measures are variable... planned inflation in captured monopolies is well known, over-charging for line items, fudging products or services provided, planned failures, defense industry games are well known back to Truman efforts before WWII. Or before.

Dickguzinya's picture

When, oh when, will the worm turn on this scumbag?  I think President Trump is setting this lowlife up for a big fall.  It can't happen soon enough.

JibjeResearch's picture

Who owns Amazon's shares?

Lol...  this is old trick....

 

European American's picture

(((Amazon and Google))), the vile, hideous parasitic monsters they are, need to be dismantled or burned to the ground.

 

Side note: Tyler, this site is getting overrun by windows popping up and ad's that know what I should buy next...you aren't affiliated with the above monsters, are you?

In addition, my computer isn't exactly state of the art, but it's pretty darn fast. However, at this site, and this site alone, sometimes takes ages to move around in. I'm not being personally monitored by the NSA/CIA when I come here, am I?

techpriest's picture

Use FireFox and install YesScript (more recently, YesScript2). It will kill all of it.

European American's picture

I'm already utilizing FireFox but I'll definitely look into YesScript2...Grazie, molto bene!!

GreatUncle's picture

Well if not then I failed in my ambition to chat up an NSA gal ... oh well.

moorewasthebestbond's picture

Amazon chews up seller's margins.

 

Groupon sinks seller's margins with nuclear torpedoes.

To Hell In A Handbasket's picture

American capitalism at its finest. lol  How many scribes have let us known through the ages, whether they were Greek, or Roman. That the policies used by empires to rob, subjugated, abuse and oppress abroad, was eventually bought home to Athens, Rome et al? 

The rot you are seeing within the USSA government and its institutions, is the logical conclusion for allowing the west to plunder the 3rd and developing world. What we have done is turn a blind eye to the development of techniques, strategies and institutions, whose sole aim was to bribe, cajole and by shady means corrupt countries and individuals so our corporations and high net worth individuals, could make money abroad by hook, or by crook. 

Our governments and the average citizen did not care, because it was happening over there and not here. How short sighted were they? The art of subversion, bribery and plunder has been refined and mastered for our society, and these techniques have come home to roost, infected OUR OWN INSTITUTIONS and CORRUPTED OUR LEGISLATURE. Hence Killary can commit blatant crimes and the institutions tasked with rooting out the corruption and sending her to caught, are so compromised, the institutions no longer function as they should.

How many times have I wrote on here, the well-being and interests of places like the Congo, directly affects us? Allowing Indonesia to sign crooked contracts  and raped today, just means we are going to give crooked contracts and raped at a later date. What was the common reply on ZH, by the average IQ? Fuck the niggers. Fuck the muzzies. we have superior IQ, blah blah blah.... A chronic failure to extrapolate has led us to where we are today and I'm 30 years ahead of the curve on this. Oh so predictable.

This is not fascism, but corruption at the heart of USSA most important institutions. The rot is so deep and if not cut out in the next 8 years, it will be terminal, such is the growth rate of the tumour. Unite or die Yankees. Forget the left vs right bullshit. It's all about temporary uneasy alliances to vanquish the COMMON enemy.

FlKeysFisherman's picture

"...USPS delivers Amazon packages for $2 per package — even though it costs USPS $3.46 per package to make these deliveries."

HUH? Unbelievable.

Utopia Planitia's picture

How else do you think USPS stays so deep in the hole? What that actualy shows, however, is that USPS has too high a parcel delivery cost.  They are essentially playing the same game as AMZN - underprice the competition in hopes it will die.  Not always a good strategy.

directaction's picture

Amazon and Goldman Sachs run the whole world