Waste of the Day: $8 Water Filter Costs the Government $156

Topline: The purchasing platform offered by the General Services Administration is putting government agencies at a disadvantage, according to a new audit from the GSA inspector general. Government agencies across the U.S. use it to buy goods and services, but the website is littered with markups and rip-offs.

The GSA Advantage system is vulnerable to absurd overcharging

Key facts: Created in 1995, GSA Advantage is essentially Amazon for the government. 

Contractors negotiate prices with the General Services Administration and list their products on the website. Federal agencies and state and local governments can buy supplies at the negotiated price, supposedly guaranteeing that the purchases are “fair and reasonable.”

But according to the inspector general, agencies using GSA Advantage are “at risk of overpaying for products.” In one absurd example, the GSA determined that a $156 water filter had a fair price and listed it on GSA Advantage. The exact same water filter was already listed on GSA Advantage for less than $8.

The GSA also approved a $1,774 laptop docking station that was already available for $142 and $487 printer ink that was already listed for $265.  Auditors found similar price variation in 77 of 100 popular products, including batteries, scissors and fire extinguishers.

GSA employees are not “adequately” deciding whether a product’s price is actually reasonable, according to the audit.

One GSA employee was supposed to research 28,306 products to see if they were being offered at a reasonable price. They researched only 15% of them but declared that all 28,306 were reasonable, the audit found.

Employees not doing their research

Another employee was assigned to research 2,392 products and determined that all of them were being offered within 5% of market value. Auditors found that only 302 of the products were actually within 5% of a fair price. One was marked up by 129%.

Auditors asked the GSA to provide documents showing how the prices of 85 products were determined to be fair and reasonable. There were only records for 22 of them.

Auditors also found that 93 out of 100 products were listed on GSA Advantage with incorrect information. Some listed the wrong size or manufacturer. Others had prices that were obviously a mistake, like a $6.09 computer monitor.

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Unfair prices get through

Background: The GSA does not publicize how many purchases are made through GSA Advantage, but business consultants at Price Reporter found through open records requests that federal agencies bought $101 million worth of supplies on the platform from October to December 2024.

That’s only part of the supplies that government agencies buy using the GSA’s price databases, which are expected to be worth $47 billion in 2026. The databases have a new method for gathering price info, but previous audits have found that 73% of the new data is “inaccurate, unreliable, and unusable.”

Summary: Most American families and businesses would never buy a product without being certain the price is fair, yet cost efficiency remains a foreign concept for the federal government.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.