Saturday 21 June 2008

Government purchasing encourages monopolies

Misapplication of “value for money” requirements when purchasing software results in poor value for money - Government purchasing policies for software tend to support the creation of monopolies.

Government purchasing has effects on the price paid by citizens for the product purchased. In some cases purchasing produces volume which permits scale discounts and therefore a net benefit to citizens who also purchase the product. However, in the case of lock in software Government purchasing can create a monopoly in the software which leads to increased costs for citizen purchasers and a net detriment for society as a whole. It is not appropriate for value for money policies to be assessed on a per acquisition basis when software is being acquired. Doing so will almost certainly create net costs for the community when considered in the aggregate.

Read the rest of Brendan Scott's article here: The Tragedy of the Anti-Commons.

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