It seems the government goes one of two ways on things: either they pay rock bottom prices or they are paying millions of dollars to fund a research study on research studies. I can’t really speak to federal research grants other than to say that I’m sure most of them are for valid reasons, and I guess proving what you already know counts in that regard. There may be a few that make you scratch your head but just think about the all other grant applicants that lost out to them, because you know there had to be worse ideas.

On the other hand, people tend to think something nefarious goes on when the government gets a good deal on consumer goods. However, it is not the case. You actually get very similar discounts when you buy things at warehouse club stores or when you get a group rate on something. Do you think that the government buys one or two of something? Of course not, just like you don’t go to a warehouse club to buy a roll of paper towels. It’s the same concept: Bulk purchases. And even if they don’t buy many at a time, the knowledge that the government might come back and purchase even more would give a company enough incentive to give them a nice discount. Don’t forget, too, that the government is in the business of buying nearly everything, from vehicles to food, furniture, and office supplies.

So if the government is going to buy something like an oil filled heater, they’re going to buy a LOT of them. Of course, this means they are going to get a fantastic bulk discount from a company who is hoping that the deal they are giving will procure even more lucrative business in the future. And you can bet they’re going to get a great deal on the oil to run the heaters, too. Again, it isn’t because of some conspiracy. It is way more likely because they are repeat consumers who buy a lot of oil. Think about it from the point of view of the business owner: if the government says to you they want to buy aa huge amount of oil for a certain price and you have the stock, what would you say? If it is close to the market value or what you would typically charge, you would have to be foolish not to agree. And even if they offer a price that is less than you’d get selling it off piecemeal, think about how long it would take. Take into consideration how much product you could move in a much shorter amount of time and see if that persuades you. It gets harder and harder to resist, doesn’t it? Or if the heaters can run on vegetable oil, then they might be able to use the waste from their own galleys, kitchens, and mess halls. That would be quite eco-friendly, wouldn’t it?

Yes, I would imagine that sometimes the government buys things that are wasteful. In such a large organization with so many people having purchasing power, it is absolutely bound to happen. However, the lesson here is that the government uses their bulk purchasing power to get deals all the time. You should look into something similar for yourself!