What the Paperwork Was For

Since the first of October, the fuel charge on a Guam household’s power bill has been more than double what it was in June. For a family that uses 1,000 kilowatt-hours a month, the difference comes to about $147.¹ Behind the number is a tanker. Fuel that cost the Guam Power Authority about $88 a barrel in January cost more than $222 in April, after the war with Iran and the closing of the Strait of Hormuz.²

Each cargo has to be paid for before customers’ bills catch up, so in May regulators let the utility open a line of credit of up to $70 million to keep paying.³ By mid-September, nearly four months later, the utility described that line of credit in five words: “currently in the procurement process.”⁴ As September ended, it still had not opened.⁵

I do not know what slowed it, and I would not assume that anyone at the utility sat idle. But with the lights at stake and no one disputing the need, the tool for paying had been a season in the buying. It is fair to wonder about the pace of everything else.

Two cases I have written about before suggest an answer. In early May, attackers encrypted and defaced several government websites while the support contract for the vendor that ran them was still in procurement. The vendor had recommended patches months earlier, the acting chief technology officer later told a legislative oversight hearing, and the office had been waiting on a purchase order to apply them.⁶ And last November, Public Works itself said that repeated procurement challenges had delayed a new Simon Sanchez High School for more than a decade, while thousands of students sat through double sessions.⁷

The way the owner of a small store buys a freezer is worth watching. She knows what she needs, because she has been nursing the old one for years. She calls two or three suppliers she has dealt with before. She asks the price, and then she asks how much power the thing draws, because she is the one who opens the power bill. By the afternoon she has decided. No committee met, no affidavit was notarized, and yet nothing about the purchase was careless. She was quick because the money was hers, and she was careful for the same reason.

That is most of what there is to know about how a well-run business buys. The person spending answers to an owner who can see, and the owner never asks how many forms a purchase cleared, only what it cost, when it arrived, and whether it worked.

Government cannot buy that way, and the reason deserves respect. The money belongs to the public, and the public cannot stand at the counter. A shopkeeper may favor her cousin; a government must not. So in 1983 Guam put into effect a procurement law built on a national model code, and it set procedure where the owner’s eye would have been: sealed bids, written determinations, the right to protest.⁸ That is what the paperwork was for. The law’s own commentary called the rules it replaced vague, and admitted, with a candor I admire, that the new ones would “somewhat complicate” matters.⁹

It was a fair trade, and the case for keeping it is strong. On a small island, where a purchasing clerk may well know the vendors personally, firm rules protect the honest employee as much as the taxpayer. And Guam has seen an unwatched fast lane before. In 2004 the Public Auditor reported that small purchases, the law’s quick lane, made up 95 percent of the purchase orders the General Services Agency issued over twenty-one months. Orders appeared to have been split to stay under the bidding threshold, nineteen of them to one vendor in a single day.¹⁰ Speed without sight is how public money goes missing. On that point, the defenders of the rules are right.

But procedure was meant to fill the gap left by owners who cannot watch over the spending as it happens, and it fills that gap slowly. Paper can show that a process was followed; it cannot show that the public got its money’s worth. And when the careful road proves too slow, the remedy so far has been one exception after another. In 2023 lawmakers created a special protest track for large federally funded projects. In 2024 they waived certain procurement rules so the power authority could bring in temporary generators. In 2025 they raised the small-purchase ceiling for the public health department to $250,000, ten times the general limit.¹¹ Each was reasonable. Each was also an admission that the main road is too slow, and none changed how much the public can see.

Changing that is the better bargain, with every step toward speed paid for by a step toward sight. A resident who wondered about the fuel credit should be able to open one page and find which lenders were asked, what they offered, who chose and why, and how many days each step took. It took an audit to find those nineteen orders to one vendor; on such a page they would appear within the week, for any reporter or rival vendor to notice. Ukraine rebuilt its public purchasing on the rule that everyone sees everything, and by the end of 2020 had counted more than $6 billion in savings.¹²

Sight would shorten fights, too. The protest that halted Simon Sanchez last November turned on whether the procurement record had been complete and on time;¹³ a record kept in public from the first day leaves little to argue about on that score. A protest must remain a right, but it should be decided on a deadline, as federal protests are, within 100 days.¹⁴

Guam’s law already promises this. Its stated purposes include the most value for public funds and public access to all aspects of procurement.¹⁵ Keeping that promise as a matter of routine would make faster lanes safe.

Once the owners can see, the buyers can move the way a business does. In the autumn of 1983, the season Guam’s law took effect, Peter Kraljic of McKinsey argued in the Harvard Business Review that companies should stop treating all purchases alike and handle each according to its stakes and the risk to its supply.¹⁶ Three habits that follow from that idea would serve Guam well.

The first is to match the process to the stakes. Toner does not need the scrutiny a power plant does, and a security patch should not wait months for a purchase order. Hawaii lets agencies use small-purchase procedures for goods and services under $100,000, four times Guam’s ceiling, but its executive agencies must run purchases of $15,000 and up through an online system, and awards of $2,500 or more are posted publicly.¹⁷ The lane is wider, and it is lit.

The second is to compete once and buy many times. The shopkeeper does not shop for receipt paper every week; she has a supplier and a price, and she orders against it. The Public Auditor urged that kind of planning in 2004, and found in 2011 and again in 2017 that it was still not working.¹⁸ Guam’s code already lets a few public health and welfare programs join contracts that other governments have competitively bid.¹⁹ That door could open to every agency.

The third is to count the whole cost. The shopkeeper asks about the power draw; a rule that weighs only the sticker price does not. Guam’s law already tells the government to weigh total cost of ownership, fuel economy included, when it buys vehicles, and it allows life-cycle cost as a measure in any sealed bid.²⁰ With the fuel charge where it is, the cheapest air conditioner on the bid sheet may be the most expensive one the government ever owns.

The shopkeeper is quick and careful because she spends her own money in her own sight. The people of Guam are owners too, of every dollar their government spends, whether it is raised through taxes or, like the fuel credit, repaid through power bills. Whoever holds office in January could begin with that one page: let the owners see, and then let the buyers move.

Disclosure: The author owns SK102, a technology consulting firm on Guam that could seek government technology work of the kind described here.