From Convenience to Transparency, Control and Best Market Pricing for Taxpayers

Commercial Retail Marketplaces (CRM) Are Undermining Public Procurement. How Government Can Take Back Control with Efficiency and Effectiveness

By Academy Fellow Stephen A. Hamill, Jack M. Pellegrino and Gerald R. Plummer: Public procurement advances the public good through key foundational elements and a promise for outcomes in the public interest: public dollars must be spent transparently and competitively, which results in efficiency, effectiveness, and most of all best pricing in the public interest of taxpayers. Yet across the country-at each level of government that promise and commitment to the public interest is being quietly weakened by the rapid rise of convenience‑driven purchasing through commercial retail marketplaces (CRM) that mirror the convenience and familiarity of personal online shopping and ordering.

What began as a workaround for small, urgent buys has evolved into a shadow procurement system where department users operate independently—one that operates outside the processes designed to protect the public interest, outside competitively solicited contracts, outside policy oversight or coordination with central organizational purchasing, and outside the core values of integrity, service, and transparency that define the public procurement profession. 

Personal spending decisions often prioritize convenience, speed, or preference over disciplined evaluation. In that context, buyers may accept higher unit pricing or make trade-offs without fully weighing efficiency, effectiveness, performance, or transparency.

As Milton Friedman observed, “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own.” The principle is especially relevant to public procurement, where spending decisions are made on behalf of taxpayers and communities. 

Unfortunately, today, convenience has overshowed thoughtful procurement and strategic planning for on-going and future purchasing needs.  Public agency leaders and mangers increasingly are in the mode of buy it immediately and buy it now … without forethought of the need for additional units tomorrow, next week, or next month.

Public spending should always require a high standard of transparency, competition, effectiveness, and clear public benefit. These safeguards ensure appropriate stewardship of public funds and help procurement professionals demonstrate that decisions serve the public interest—not merely convenience or favoritism.

Contra Costa County-among the top 10 most populous CA Counties-own CRM data shows how quickly convenience purchasing can erode best practices of procurement control: 

• 10,208 unique products. 
• 2,684 price changes.
• $750,000 spent with marketplace sellers in 32 countries.

When viewed through the lens of National Institute of Government Purchasing’s published best practices-The Institute for Public Procurement’s Values and Guiding Principles of Public Procurement-the pattern is unmistakable: CRM purchasing undermines every core objective of public procurement.

1. Best Value & Pricing: Dynamic Pricing Makes Fiscal Control Impossible

CRM pricing is algorithmic and volatile. Contra Costa County saw:

• 2,684 price changes
• $37,000 in avoidable spending
• Price swings of 100–150% on routine items

Best value purchasing cannot be achieved when prices change by the hour.

2. Fair and Open Competition: Algorithms Replace Competitive Bidding

CRM algorithms—not procurement processes—decide which sellers win. This eliminates:

• Supplier diversity
• Local business participation
• Transparent competition

Algorithms cannot replace competitive solicitations.

3. Operational Efficiency: Fragmentation Replaces Strategy

Contra Costa’s decentralized purchasing produced:

• 10,208 unique items
• Hundreds of sellers
• No SKU (product) standardization

Efficiency collapses when every buyer becomes their own procurement department.

4. Integrity & Public Trust: Opaque Transactions Undermine Accountability

CRM transactions often appear simply as the CRM name, then masking:

• Seller identity
• Country of origin
• Compliance status

Public trust depends on transparency—CRMs obscure it.

5. Risk Management: CRM Introduce Financial and Operational Risk

CRM purchasing exposes agencies to:

• Counterfeit goods
• Recalled products
• Unvetted international sellers
• Data security vulnerabilities

Risk multiplies when procurement professionals lose visibility.

6. Policy Goals: CRM Undercut Local, Sustainable, and Small Business or Veteran or Equity‑Driven Purchasing

Public procurement increasingly advances:

• Local economic development
• Small and diverse business participation
• Sustainability mandates

CRM undermine all three because sellers are anonymous, global, and unaligned with public values.

7. Timeliness & Quality: Speed Without Performance Standards Creates Liability

CRM deliver quickly—but speed is not quality. Counterfeit toner, recalled chairs, and inconsistent return policies show that convenience can mask serious quality and safety risks.

Precedent for Expanded CRM Use 

The use of CRM based on convenience sets a precedent for applying CRM convenience criteria to an increasing array of products and services.

Procurement oversight is absent from a growing number of transactions, expanding the opportunity for fraud, waste, and abuse.

Conclusion: Government Agencies Can—and Must—Reclaim Control

CRM purchasing is not just inefficient. It is fundamentally incompatible with the core objectives of public procurement to protect the public interest. On occasion when speed is essential, public procurement processes exist to move in an expediated manner while retaining safeguards.

But government agencies are not powerless. They can act—decisively and immediately—by:

• Consolidating suppliers to regain leverage
• Standardizing products to eliminate fragmentation
• Using competitively awarded contracts to restore fairness
• Enforcing purchasing policies to prevent off‑contract drift
• Leveraging available CRM analytics and reports to regain visibility
• Prioritizing local and diverse suppliers to advance policy goals
• Rebuilding convenience and user focus inside a governance‑aligned platform

The path forward is clear: government agencies must reclaim procurement from convenience‑driven marketplaces and reassert the values that define the profession to protect the public interest.

As artificial intelligence becomes more embedded in public procurement, agencies must recommit to the foundational principles that define the profession: transparency, competition, accountability, efficiency, effectiveness, and stewardship of public funds. AI-enabled tools and procurement processes should strengthen—not weaken—these principles by improving visibility, supporting sound decision-making, and ensuring that public dollars are managed with the care required when spending on behalf of others.

This is not merely a procurement reform, it is a restoration of public stewardship, public trust, and the protection of the public interest.

About the Authors

Stephen A. Hamill, Fellow, National Academy of Public Administration, Co-Founder & Exchange Administrator of the Public Purchasing Exchange (PPEx).

Jack M. Pellegrino, NIGP-CPP, CPPO, CPCM, Adjunct Faculty, Knauss School of Business, University of San Diego, CA.

 Gerald R. Plummer, Division Manager, Purchasing, Internal Services Department, County of Los Angeles, CA (Retired).