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Thanks for providing the background on how this came about, it makes a bit more sense now.

Could we get the same result by allocating the GSA a flat amount based on what they need and then penalize them by cutting the budget if no one uses their services, just like we do for other agencies?

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No, the structural/legislative design of the GSA protects it from penalties because most of Gov't procurement is routed through its offices both Military (with caveats of course) & Civilian. The GSA spends money to reduce spending.

Interesting. I was discussing hypothetical possibly better arrangements, however, it's clear from the original article that the GSA doesn't currently operate this way.

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